►
Description
City of San José, California
Federated City Employees' Retirement Plan Board of August 18, 2022
This public meeting will be conducted via Zoom Webinar. For information on public participation via Zoom, please refer to the linked meeting agenda below.
Agenda: https://sanjose.legistar.com/View.ashx?M=A&ID=992817&GUID=14D30C49-AEEF-4ACC-A4A0-D2AB78899E28
A
A
A
A
A
A
A
A
A
A
A
B
Welcome
to
the
August
meeting
of
the
Federated
retirement
and
Health
Care
Trust
I'm
calling
the
meeting
to
order.
Let's
have
a
roll
call
vote.
Vice,
chair,
Jennings.
A
B
B
Linder
here
and
as
mentioned
trustee
avasti
is
absent,
so
we
will
proceed
with
the
agenda.
B
A
few
ground
rules
We
are
continuing
to
meet
virtually
at
this
meeting
and
in
doing
so
pursuant
to
ab361
as
such,
all
votes
will
be
roll
call
votes.
If
you
are
not
speaking,
please
be
on
mute
to
cut
background
noise
for
discussion
items.
Each
trustee
will
have
a
turn
to
speak
in
roll
call
order
more
than
once.
If
desired.
The
public
will
also
have
an
opportunity
to
speak
on
each
item
after
trustees.
B
We
will
take
orders
of
the
day
now
before
closed
session
orders
of
the
day.
We
need
to
hear
item
5D
prior
to
closed
session.
This
is
discussion
and
action
to
designate
the
chair
of
the
board
to
be
the
board's
labor
negotiator
regarding
compensation
for
the
chief
executive
order
and
the
chair
of
the
investment
committee
to
be
the
board's
labor
negotiator
regarding
compensation
for
the
chief
investment
officer
and
I
think
I'd.
B
Also
like
to
take
public
comment
prior
to
closed
session,
are
they
any
other
proposed
changes
to
the
order
of
the
day
so
hearing
none
do
I
have
a
motion
to
for
these
amended
orders
of
the
day
so
moved
and
that
was
trustee
Linder?
Is
there
a
second
trusty
Kelly
a
second
from
trustee
Keller
I
heard
first
any
discussion?
Any
public
comment:
we
will
vote
in
roll
call
order.
Vice,
chair,
Jennings,
bye,
trustee,
Chandra,
hi
who's.
Next,
to
my
will
call
order
here,
one
second
trustee
killer,
I
trustee
or.
B
Linder
aye
and
the
chair
votes
I.
So
we
will
proceed
then,
with
the
I
believe
we
do
not
need
to
wave
Sunshine.
So
we
will
proceed
with
the
orders
of
the
day.
I'm
sorry
we'll
proceed
with
item
five.
B
What
did
I
just
say:
5D
5D.
Yes,
so
in
closed
session
we
will
be
discussing
the
performance,
review
and
compensation
for
the
CEO
in
CIO
and
the
instructions
to
the
labor
negotiators,
but
I
believe
before
we
can
do
that.
We
logically
must
point
the
labor
negotiators
for
the
CEO
and
CIO
Council
Lederman
or
Council
chin.
Do
you
have
anything
to
add
to
that
description
of
this
item?
No.
A
That's
perfectly
fine,
Mr
chairman
and
please
proceed
it
would
be
by
motion,
and
a
single
motion
to
for
both
designations
would
be
perfectly
fine.
B
B
B
Any
comment
from
the
public,
so
we
will
have
a
roll
call
vote
trustee.
Sorry,
Vice,
chair,
Jennings,
aye,
trustee
Chandra.
C
Okay,
well,
then,
then,
I
I
certainly
want
trusty
chair
Horowitz
to
negotiate
so
I
will.
B
Okay,
well,
thank
you
for
that
affirmation,
trustee
Kelleher
and
having
been
on
the
board
for
a
couple
years
now,
I
can
assure
you
that
neither
of
these
trustees
have
any
financial
interest.
A
So
I
also
vote
I
very.
B
All
it's
a
passing
interest
as
it
were
so
next
I
would
like
to
take.
If
there
are
any
public
comments,
let
me
just
read
the
Preamble
here
at
this
time.
Members
of
the
public
May
comment
on
items
not
included
on
the
agenda,
provided
that
the
matter
is
within
the
subject
matter:
jurisdiction
of
the
board
members
of
the
public
who
wish
to
provide
comment
at
this
time.
B
I
do
side
by
quote
raising
your
hand
in
the
zoo
map
or,
if
joining
by
telephone,
by
pressing
star
nine
on
your
telephone
keyboard
when
pressing
when
addressing
the
board
press
star
6
to
mute
or
unmute,
please
state
your
name
for
the
record
prior
to
providing
your
comments.
Speakers
will
be
limited
to
three
minutes.
B
B
B
B
B
B
A
A
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A
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B
B
The
agenda-
and
there
were
a
few
other
items-
I-
did
want
to
mention
during
orders
of
the
day,
and
that
is,
we
will
take
a
break.
B
I
think
we'll
take
a
break
now,
normally
take
it
at
the
10
o'clock
hour
and
then
resume,
and
that
there
will
also
be
a
recess
at
one
o'clock
to
accommodate
the
Civic,
Center
TV
broadcasting
system
and
we're
asking
all
board
members
to
please
stay
on
the
zoom
after
this
call
after
this
meeting
ends
so
that
we
can
have
special
meetings
to
accommodate
ab361..
B
So
with
that,
let
us
take
a
five
minute
recess
and
we'll
resume
with
the
consent.
Calendar
foreign.
A
A
A
B
B
And
I
forget:
do
we
need
a
motion
and
approval
of
the
consent,
calendar.
B
D
B
Well,
if
I
speak
slowly,
okay,
yeah
trustee
Jennings,
how
would
you
vote
if
it
was
40
seconds
from
now.
B
B
Thank
you.
Next
agenda
item
is
Investments
an
oral
update
from
our
CIO
Mr
Palani.
A
Thank
you,
Mr
chairman
good
morning,
trustees
consultant
staff
members
of
the
public.
This
would
be
a
short
investment
section
next
week
next
month.
We'll
have
detailed
performance
reports
from
Kira
for
last
fiscal
year,
but
I
do
have
some
estimates
to
that.
I
would
like
to
share
with
you
last
fiscal
year.
The
pension
plan
returned
minus
4.4
percent
and
the
healthcare
trust
returned
minus
10,
and
these
are
again
estimates.
A
The
good
news
is
that
the
media
extension
plan
returned
minus
7.6
percent
and
that,
even
though
all
peers
have
not
reported
yet
are
negative,
4.4
is
still
in
the
top
quartile
of
our
peers
and
in
the
last
fiscal
year
the
the
plan
returned
29.2
percent,
and
so
that's
the
nature
of
financial
markets,
you're
going
to
have
some
up
years
and
some
down
years,
but
in
the
long
run
the
expectation
is
that
risk
assets
will
be
rewarded.
Exposure
to
risk
assets
will
be
rewarded
now
the
on
a
three-year
basis.
A
Again,
these
are
estimates
from
Akita.
The
return
was
8.6
percent
ended
this
past
fiscal
year
and
that
put
us
in
the
fifth
percentile
of
our
peers.
So
that's
fifth
from
the
top.
So.
A
And-
and
we
are
pleased
with
that-
and
and
of
course,
as
you
know,
excuse
me-
there
are
still
a
lot
of
issues
in
the
market
that
need
to
get
resolved,
but
we
we're
off
to
a
strong
strong
start.
This
fiscal
year
we
had
a
strong
July
in
the
markets,
reasonably
strong
August,
though
the
last
couple
of
days
have
been
slightly
negative,
so
through
August,
16th
Makita
estimates
that
our
pension
plan
is
up
5.42
for
this
fiscal
year,
so
that
all
but
wipes
out
the
deficit
of
last
fiscal
year.
A
Of
course,
these
are
early
days
and
just
sharing
the
numbers
for
what
it's
worth
and
the
healthcare
trust
is
up.
6.6
percent
clear
to
date,
I
also
wanted
to
share
with
you
that
the
city
actually,
as
you
all,
know,
elected
to
pre-fund
its
retirement
contribution,
which
it
did
on
July
1st
and
the
pension
plan
actually
received.
A
184.4
million
and
Healthcare
trust
received
18.3
million,
and
we
immediately
deployed
those
assets
according
to
the
board,
approved
strategic
asset
allocation,
as
we
always
do.
A
But
you
know
this
year:
there
was
some
slight
changes
because
of
immunized
cash
flow
and
the
way
that
that
works
out
and
I'm
actually
going
to
invite
senior
investment
officer,
Jay
Kwan,
to
expand
on
that
and
he's
going
to
share
his
screen
and
and
share
some
numbers
so
over
to
J
for
his
usual
riveting
edge
of
the
seat.
E
That's
going
to
be
a
hard
expectation
to
meet
there.
Let
me
let
me
put
up
the
slide.
E
Hopefully
you
can
see
the
the
numbers
in
front
of
you
riveting
riveting.
So,
as
probably
noted,
the
city
chose
the
pre-fund
this
year
and
when
you
combine
that
on
July
1st,
with
the
end
of
quarter
and
the
fiscal
year
rebalancing
we
had
to
do
at
the
end
of
June
there's
a
lot
of.
A
E
Relatively
large
amount
of
trading
condensed
into
a
relatively
small
window
of
time,
so
I'm
gonna
give
you
a
little
bit
of
detail
on
the
pre-funding
aspect
of
it
and
those
are
the
the
three
columns
of
numbers
you
see
in
front
of
you
there
so
to
to
probably
detail
the
FED
pension
received
184,
just
over
184
million
on
July
1st
and,
as
you
noted
normally,
we
would
take
that
money
and
spread
it
out
across
the
asset
allocation,
so
giving
each
asset
class
their
prorated
slice
of
capital
right
and
and
thereby
we
we
would
keep
the
plan
near
its
strategic
asset
allocation
targets.
E
But,
as
probably
noted,
it
was
a
little
bit
more
complicated
this
year
because
we
had
an
increase
in
the
size
of
the
immunized
net
cash
flow
strategy
and
remember
the
immunized
net
cash
flow
strategy
or
incf
allocation.
That's
where
the
plan
sets
aside
the
next
five
years
of
net
cash
outflows
and
we
take
that
money
and
we
invest
it
in
a
latter
treasury
portfolio.
So
it's
a
cash
flow,
matched
Bond
portfolio.
You
can
think
of
it
as
a
short
duration,
risk-free
portfolio.
E
So
we
have
that
pool
of
money
and
then
every
month
we
draw
from
that
pool.
Well,
so
we
draw
from
the
incf
to
help
pay
the
beneficiaries
right.
E
Sorry,
hang
on
I'll
pay
help
pay
the
beneficiaries,
this
allocation,
so
the
incf
allocation,
amortizes
or
shrinks,
and
it
gets
smaller
over
time
as
we
pay
every
month,
the
beneficiary
payments
you
can
think
of
it
just
theoretically,
as
the
plant's
piggy
bank
right,
it
helps
us
avoid
having
to
potentially
sell
Assets
in
in
dislocated
markets
to
Simply
fund
the
benefit
payments.
E
So
what
happens
at
the
start
of
the
fiscal
year?
Is
we
have
to
determine
how
large
of
a
pool
how
large
of
a
piggy
bank
we
need
to
make
those
payments
and
the
way
we
do
that?
Is
we
use
the
projections
provided
by
Chiron
right,
so
they
give
us
a
projected
beneficiary
payments
going
out.
E
E
It
probably
reminded
us,
though,
that
the
returns
for
the
plan
post
covid
were
very
strong
right,
29
and
change
for
fiscal
year,
ending
June
2021.,
and
that
was
great
for
the
market
value
of
the
plan
and
great
for
the
funded
status
of
the
plan,
but
it
had
a
kind
of
perverse
effect
on
the
net
cash
flows,
because
the
outperformance
that
year
basically
Nets
against
the
prior
underperformance
of
the
preceding
years
and
reduces
the
sponsor's
ual
payments.
E
So
if
you
think
about
it
from
a
cash
flow
perspective,
the
net
cash
flow
right,
the
beneficiary
payments
were
unchanged.
So
those
those
those
largely
didn't
change
year
to
year,
at
least
the
projections.
But
we
had
less
contributions
coming
in
right,
so
same
beneficiary
payments
going
out
less
contribution
coming
in
the
net
cash
flow.
Leaving
the
plan
becomes
larger
right.
E
It
becomes
more
negative
money
coming
out,
so
more
cash
going
out
means
we
need
to
set
aside
more
of
the
plan
as
that
piggy
bank,
and
so
we
had
to
increase
the
size
of
the
incf
to
eight
percent
of
plan,
all
right
and
it's
penciled
in
in
the
Strategic
asset
allocation.
E
At
five
percent
of
the
plan,
so
to
get
that
extra
three
percent
into
the
incf,
we
could
have
done
a
couple
things
we
could
have
taken
in
a
bit
of
capital
from
every
other
asset
class,
Pro,
rata
and
kind
of
shrunk,
everything
else
down
just
in
proportion
or
we
could
have
taken
the
money
from
the
parts
of
the
plan
that
were
the
most
similar.
E
And
so
we
discussed
this
at
the
last
special
IC
meeting
back
in
June
and,
as
you
can
see
from
the
numbers,
we
ended
up
doing
the
latter.
So
we
funded
the
increase
in
the
incf
by
drawing
down
the
IG
bonds
allocation.
So
second
line
of
detail
from
the
bottom,
and
so
the
three
columns
are
the
of
numbers,
the
First
Column
SAA.
Those
are
the
Strategic
asset
allocation,
Target
weights.
E
You
you,
as
the
board,
approve
that
every
every
March
in
March
April,
the
second
column,
labeled
630
22.
Those
are
the
allocations
at
the
end
of
the
fiscal
year
and
then
post
pre-funding.
E
That's
what
we
moved
the
plan
to
after
we
got
the
sponsors
pre-funding
contribution
on
on
July
1st,
and
so
you
can
see
how
the
immunized
net
cash
flow
allocation
increased
to
take
into
account
the
next
year's
or
the
kind
of
reloading
of
that
five-year
net
cash
flow
projection,
and
to
take
that
beyond
the
the
five
percent
again
the
offset
was
the
IG
bonds
line,
and
so
I
just
wanted
to
go
into
a
little
bit
of
detail
there
to
keep
you
apprised
of.
E
What's
going
on
at
the
plan
level
in
terms
of
capital
allocation
and
one
note
so,
the
IPS
or
the
investment
policy
statement
mandates
that
we
keep
the
asset
classes
within
plus
or
minus
10
of
their
target
weight,
and
so
for
the
incf
to
be
at
8
relative
to
the
five
percent
Target
weight
is,
is
actually
technically
out
of
the
bounds
mandated
by
the
IPS.
E
There
is
a
line
there
in
the
IPS
store
that
says
the
incf
allocation
is
exempt
from
the
rebalancing
requirement
because
by
Design
remember,
this
is
an
allocation
whose
value
changes
every
month
so
that
that
is
something
that
we
wanted
to
highlight.
But
not
necessarily
ask
for
an
exception.
E
The
kind
of
funny
offset,
though,
is
or
the
the
interesting
note
is
that
to
fund
the
incf
Beyond,
its
five
percent
Target.
We
have
to
take
the
money
out
of
something
else.
In
this
case
it
was
IG
bonds,
and
so
you
know
this
is
just
a
note
that
the
the
offsetting
allocation
might
be
out
of
the
bounds
of
that
plus
or
minus
10
Target
weight,
and
that
isn't
as
explicit
as
the
incf
requirement
in
the
IPS.
E
So
many
acronyms
apologize
for
that.
If
you
want
more,
though
I'll
be
talking
about
the
humanized
net
cash
flow
allocation
at
the
upcoming
IC
meeting
so
see
you
there
I'll
take
any
questions
now,
if
you,
if
you've,
got
any.
B
Are
there
any
questions
from
trustee
for
Mr
Kwan
on
the
immunized
net
cash
flow
calculations.
D
So
all
right
so
just
trying
to
understand
this
because
of
the
post
pre-funding
is
that
4.8
percent.
D
E
Yeah,
so
the
the
First
Column
of
numbers
is
SAA.
Those
are
the
target
weights
that
are
approved
by
the
board.
D
E
Though
we
think
of
those
as
the
policy
weights
and
the
IPS
says
that
we
at
the
end
of
every
quarter,
we
need
to
be
within
plus
or
minus
10
of
each
of
those
Target
weights.
So
for
something
like,
let's
say,
we'll
take
the
IG
bonds
line.
It
has
an
eight
percent
SAA
Target.
So
we
need
to
be.
You
know,
7.2
to
8.6,
yeah,
8.8,
sorry,.
E
At
the
end
of
end
of
the
quarter,
you
know
so
it
you
can
see
at
the
end
of
June.
It
was
offsetting
the
immunized
net
cash
flow
immunizing
that
cash
flow
at
that
point
had
amortized
down
to
just
2.6
percent
of
plan
and
the
offset
there
that
that
the
difference
between
the
five
and
the
SAA
line
and
the
2.6
that
money
largely
went
into
the
IG
bonds
allocation
and
so
the
immunized
net
cash
flow
is
Exempted
explicitly
in
the
IPS.
E
Because
it's
you
know
by
Design
it's
something
again
that
changes
every
month
right,
I,
wasn't
I,
didn't
have
enough
foresight
to
kind
of
include
the
offsetting
allocation
as
well
in
the
IPS,
when
we,
when
we
drafted
that
and
so
kind
of
the
the
flip
side
to
having
the
human
eyes
net
cash
flow
out
of
bounds,
is
that
wherever
the
money
goes
or
comes
from
is
also
out
of
bounds
right
and
so
so.
B
So
are
you
suggesting
we
should
make
an
edit
to
the
IPS
so
that
this
is
explicitly
acknowledged,
the
offsetting
the
possibility
of
an
offsetting
violation
of
the
10
limit.
E
You
know
I
I,
think
I
would
save
that
one
for
our
next
round
of
ips
edits.
It
is.
This
is
a
this
is
something
that
that
probably
could
be
edited,
but
I
don't
think
it's
it's
quite
as
urgent
as
a
you
know.
Creating
a
whole
new
board
item.
A
B
B
A
thimble
or
something
all
right,
foreign,
any
further
questions,
then
all
right,
thank
you,
Mr,
Quan,
sure
and
Mr
Pawnee.
Did
you
have
any
further
comments
on
your
action
on
your
agenda
item
here.
A
That's
right
and
yeah
I
mean,
and
and
these
are
again
estimates
is.
A
I'll,
actually
let
Laura
speak
to
that
I.
Think
as
we.
She
is
part
of
this
meeting.
I
know
we
are
getting
numbers
in
as
we
speak
to
true
of
those,
but
they
should
be
pretty
close
to
the
actual
numbers.
Laura.
Do
you
have
any
further
color
on
that.
G
B
G
I
think
the
630
numbers
are
going
to
be
the
audited
ones
that
are,
you
know,
stated
on
the
on
the
comprehensive
annual
financial
report.
Typically,
it's
the
930
report
that
that
incorporates
the
June
30th
numbers.
So
when
we
look
at
peer
relative
information
as
well,
that's
going
to
be
similar
for
all
of
the
peer
plans
that
these
630
numbers
have
331
private
markets
values.
So
I
wouldn't
expect
that
630
number
to
change
on
the
audited
financials,
but
we'll
keep
you
updated.
Okay,.
B
Right
any
other
questions
from
trustees.
Any
questions
from
the
public;
okay,
we'll
move
forward
to
agenda
item
four
discussion
and
action
on
the
Federated
disability
committee
Charter,
and
this
was
continued
from
the
May
19th
meeting.
B
Roberto.
Are
you
going
to
present
on
this.
H
I,
don't
really
have
any
prepared
comments.
Mr
chair
there
was
a
discussion
at
the
meeting
in
May,
which
I
believe
you
are
absent
and
I
think
the
boar
and
anyone
can
correct
me
if
I'm
mistake
and
they
defer
further
discussion
and
action
on
this
side
and
to
today's
meeting
pending
I'm
doing
the
review
of
the
draft
shutter,
which
is
attached
for
your
reference
and
and
I
believe.
H
Also
at
the
main
meeting
there
were
three
trustees
that
actually
were
amenable
to
join
in
becoming
a
member
of
the
committee,
if
that
is
the
eventual
action
that
you
bore
takes
this
morning,
but
aside
from
that,
I
would
just
direct
you
to
the
proposed
Charter
and
you
know,
ask
this
was
discussed
to
some
extent
at
the
last
meeting.
But
if
there
are
any
further
questions
or
comments,
we
are
happy
to
try
to
address
it
as
best
as
best
we
can.
Okay,
just.
F
Here
Horowitz,
if
I
may,
I
was
planning
to
go
through
the
charter
with
the
board
so
that
they
could
see
the
provisions
and
understand
it.
Okay,
if
any
changes
that
they
would
like
to
make
prior
to
me.
B
Okay,
there
we
go
if
we
can
make
that
larger.
That
would
be
great
how.
F
Thank
you.
So,
as
Roberta
mentioned
at
the
main
meeting,
the
the
board
considered
adopt
create
the
creation
of
the
disability
committee
and
had
directed
staff
and
Council
to
start
preparing
a
charter
for
its
consideration
for
the
creation
of
a
disability
committee.
The
disability,
the
disability
committee,
would
be
a
standing
committee
of
the
board
and
it
would
be
assisting
the
board
and
carrying
out
their
administrative
duties
in
administering
the
disability
benefits
for
membership
in
around
two.
F
Just
by
way
of
background
in
2017,
the
city
of
San
Jose
adopted
ordinance
number
29
9904,
which
amended
the
municipal
code
to
ask
for
a
creation
of
an
independent
medical
panel
of
three
professional
medical
personnel
to
help
evaluate
the
disability
applications
for
the
plan.
But
the
board
and
the
city
twice
tried
to
solicit
for
that
medical
panel
and
had
no
success,
making
it
an
impossibility
to
comply
with
the
command
under
Section
3.28.150
B,
which
called
for
the
creation
of
the
independent
medical
panel
of
three
professional
Medical.
Professional.
F
Excuse
me,
and
so
in
lieu
of
the
independent
medical
panel,
which
has
been
impossible
to
meet
under
the
provisions
of
the
San
Jose
Municipal
Code.
What
we
are
proposing
here
is
to
have
the
board
to
continue
to
evaluate
and
adjudicate
the
disability
applications
at
the
for
the
plan
members
and
to
have
the
creation
of
the
disability
committee
to
help
assist
in
that.
F
So
this
is
the
preamble
that
sets
out
the
historical
background
for
why
we
are
here
sitting
here
today
and
why
we
believe
that
the
disability
Charter
is
required.
Not
required
is
recommended
to
this
board.
F
So
here,
if
you
look
down
a
little
further
under
the
Preamble,
we
do
have
the
committee
operations
and,
as
you'll
see
here,
we
have
decided
to
propose
to
the
board
that
the
disability
committee
be
consisting
of
three
members
elected
by
the
board,
chair,
approved
by
the
majority
vote
of
the
majority
vote
of
the
board
and
based
on
the
composition
of
the
three
member
committee.
At
least
one
member
of
the
disability
committee
would
be
from
each
group.
One
would
be
from
a
Public
Employee
group
and
the
other
one
would
be
from
the
plan
member
group.
F
F
The
board
shall
appoint
The
Chair
by
the
disability
committee
and
the
majority
vote,
and
that
the
disability
chair
would
preside
just
like
what
the
all
the
other
committees
there's
a
vice
chair
that
would
sub
it,
and
once
the
chair
is
absent
for
that
in
instances
where
there's
only
two
members
of
the
disability
committee
require
forum
for
two
members
and
when
that
occurs,
the
disability
committee
vote
must
be
by
majority
vote.
F
Otherwise
it
could
just
be
I
mean
unanimous
film
when
there's
two
members
present,
but
when
there
is
three
members
present
is
by
majority
vote.
F
F
F
The
materials
that
they
will
review
will
be
prepared
by
the
department
staff,
the
board
certified
position
and
any
materials
provided
from
the
outside
retained
disability,
Advocate
Council,
as
well
as
any
materials
provided
by
the
applicants
for
consideration
and
and
once
the
board
has
made
a
decision.
It
will
direct
staff
to
prepare
for
the
board
a
summary
of
the
committee's
findings,
recommendations
and
conclusions
for
review
and
provided,
if
there's
any
further
follow-up
the
it
may
be
requested
by
the
board.
The
committee
would
follow
up
on
that.
F
Furthermore,
in
addition
to
reviewing
applications,
the
disability
committee
will
also
review
the
disability
application
procedures
at
least
every
three
years,
and
also
review
and
provide
a
report
to
information
from
the
Department
staff,
providing
the
disability
process
and
advise
support
as
appropriately
so
consistent
statistical
information
provided,
and
it
will
also
advise
the
board
at
the
requests
of
the
board
regarding
any
appointment
of
board,
certified
Physicians
and
advocates
Advocate
Council,
and
it
will
also
review
the
chart
every
three
years
and
submit
a
changes
to
the
governance
committee
and
that's
essentially
the
charter
in
in
some.
B
Thank
you,
Council,
chin
and,
and
just
to
remind
all
trustees.
The
formation
of
this
committee
as
a
permanent
committee
to
the
board
is
being
considered
because
we
feel
there
is
a
huge
backlog
of
disability
cases
that
will
be
need
to
be
heard
and
in
the
past,
we've
heard
them
as
a
full
committee
as
a
full
board
and
that
may
not
no
longer
be
efficient.
So
with
that,
are
there
any
questions
from
trustees
on
the
charter
for
the
new
disability
committee.
B
I
know
I
have
one
question
and
that
is
if
we
can
scroll
down
it
said
the
board
shall
meet
monthly
and
I
wonder
if
that
is
necessary,
should
it
only
meet
if,
if
needed
so.
F
So
it
has
a
clause
here
as
needed,
so
my
understanding
when
I
was
working
with
the
staff
is
that
the
goal
initially
is
to
meet
monthly
to
get
through
the
Bible,
but
we
put
in
the
Clause
as
needed.
So
if
there's
no
need
to
meet,
for
example,
the
month
of
July,
because
you
don't
have
any
applications
to
adjudicate,
we
would
not
need
nothing.
Okay,.
B
B
So
we
have
a
motion
from
Vice
chair
Jennings.
Is
there
a
second.
A
F
One
with
the
so
just
for
clarification
of
emotion,
I
just
saw
I'm
clear
with
is
the
motion
to
accept
the
disability
Charter,
as
written
with
the
exceptionist
subdivision.
H
would
be
clarified
to
take
out
the
words
at
least
monthly.
Yes,.
B
B
Okay,
so
we
will
have
a
roll
call
vote,
trustee,
Jennings.
D
B
F
H
Welcome
if
the
charter
was
adopted
and
to
become
final,
I,
think
the
next
item
Mr
chair
will
be
to
then
at
the
next
meeting,
bring
a
discussion
for
filling
up
the
committee
with
trustees.
So
we
can
actually
do
that
at
a
future
meeting.
Yes,.
B
A
cup
of
Cubana
will
help
okay
great,
so
we
moved
to
the
next
agenda
item.
H
Yes,
you're
on.
Thank
you
Mr
chair,
so
I'll
try
to
be
quick.
I
I
wanted
to
remind
you
your
board
that
there
are
two
public
member
trustee
seats
that
are
coming
up
for
reappointment
on
November
30th
2022,
so
we
are
working
with
the
city
clerk.
We
have
reached
out
to
the
specific
trustees
to
find
out
what
next
steps
should
be
taken
and
whether
they
are
considering
reapplying
for
the
position
or
not,
but
I
just
want
to
kind
of
keep.
H
You
keep
you
posted,
because
this
has
a
way
of
really
coming
up
quickly
and
we
only
have
about
four
months
to
to
move
ahead,
but
in
any
event,
if
the
trustees
that
are
currently
on
board
are
considered
in
rehab
reapplying
for
another
four
years,
they
certainly
can
go
ahead
with
the
process
and
we'll
make
it
available
to
get
a
reapplication
in.
So
they
can
be
considered.
H
H
Let
you
know
that
the
joint
personal
committee
next
meeting
has
been
scheduled.
They
joined
Personnel
committee
actually
met
in
person
last
week
to
approve
ab361,
so
the
next
meeting
is
expected
to
be
remote
is
scheduled
for
the
morning
of
September
9th
and
it's
to
this
cause
and
receive
presentation,
hopefully
by
both
compensation
Consultants
on
the
data
that
they
have
to
date.
In
addition
to
that,
at
that
meeting
we
would
then
be
also
approving
ab361
to
continue
having
remote
meetings.
H
Depending
on
how
the
discussion
develops,
we
will
try
to
start
scheduling
meetings
on
a
monthly
basis,
perhaps
for
the
next
couple
of
months
of
the
JPC
as
well
with
that
I
also
want
to
let
you
know
that
the
city
is
encouraging
boards
and
commissions
and
committees
to
continue
to
meet
virtually.
So
we
will
keep
you
posted,
certainly
we'll
continue
approving
ab361
to
the
extent
that
that's
possible
and
available
to
you
board,
so
the
virtual
meetings
can
continue.
H
H
I
also
wanted
to
give
kudos
to
our
staff,
our
staff
from
the
whole
office,
including
Investments
benefits
and
accounting,
but
especially
the
Accounting
Group
and
I.T
and
administration,
as
the
the
office
received
the
certificate
of
achievement
for
excellent
financial
reporting
for
the
20th
or
21st
year
in
a
row
for
the
financial
statements
for
2021,
so
a
green,
great
job
by
staff,
and
especially
the
the
accounting
staff
led
by
their
accounting
manager,
Benji
Israel
Floyd,
so
we
receive
the
financial
reporting
of
Excellence
in
Joseph
Personnel
I
wanted
to
let
you
know
that
back
in
July,
we
on
board
a
new
accounting
clerk,
Chris
Radiance
has
been
working
with
us
and
just
recently
we
completed
the
process
of
interviewing
for
two
new
benefits:
senior
analyst
positions.
H
They
both
have
accepted,
and
we
expect
them
to
be
on
board
the
week
of
September
5th
and
we
are
currently
working
on
the
process
of
interview
process
for
the
senior
supervisor
position.
H
I
also
wanted
congratulate
the
Tara
Tran
he
she
was
actually.
She
joined
us
as
a
Pinterest
specialist
early
in
the
year
and
she's
now
being
promoted
to
a
health
analyst
position
with
the
departure
of
Bessie
olano.
So
congratulations
to
Tara
and
and
good
luck
to
you
and
welcome
again,
just
as
a
reminder,
Tara
has
came
to
us
from
the
pension
analyst
for
the
United
Nations
pension
program
and
she
has
over
six
years
experience
with
them.
H
Also
a
great
welcome
to
Jesse
Holcomb
Jesse
actually
worked
with
us
for
many
years.
She
actually
was
working
when
I
first
joined
the
office
back
in
2012.
She
was
an
IRS
analyst
from
209
to
214
and
she's
back
with
us
working
as
a
an
analyst
position.
So
welcome
Giselle
great
to
have
you
back
and
just
a
couple
more
things.
We
did
have
our
summer
picnic
back
on
June
10th.
H
It
was
the
Willow
Glen
Park
and
it
was
great
to
see
actually
some
of
the
staff
that
I
have
not
seen
in
some
time.
We
had
a
barbecue
and
it
was
a
successful
picnic,
even
though
it
was
it
was
sunny,
but
very
very
warm
I.
Do
remember
that,
as
you
know,
we're
still
in
the
hybrid
approach
and
we,
the
office
is
actually
open
to
members
from
about
nine
to
three
o'clock
and
we
do
have
a
two
to
three
day
schedule
for
staff
to
come
across
the
office
during
the
week.
H
But
I
just
wanted
to
let
you
know
we
did
have
other
building
a
couple
of
incidents
with
strangers,
wandering
around
the
fifth
and
sixth
floor,
which
prompted
us
not
only
to
call
security
but
also
to
close
our
doors.
So
we
still
open,
but
the
doors
are
closed.
We
we
had
the
doors
open
before
we
now
haven't
closed.
H
We
do
have
a
sign
at
the
door,
so
I
just
want
to
mention
that
not
only
to
keep
the
Bora
price,
but
also
to
let
the
public
know
that
certainly
they're
welcome
to
come
by
the
office.
They
just
need
to
knock
on
the
door.
We
will
open
them
for
them,
but
for
the
safety
of
the
staff,
we
have
decided
for
the
time
being
to
close
the
doors
and,
lastly,
obviously
the
office
will
be
closed
on
our
Servants
of
Labor
Day
for
Monday
September,
fair.
B
A
No,
no
questions.
Okay,.
B
B
G
Hi
happy
return
from
Summer
to
everyone
is
that.
G
To
see
your
faces
well,
there
was
no
meeting
in
July,
so
I
just
wanted.
There's
one
item
that
the
council
took
up
recently
and
there
was
discussion
about
the
retirees
so
I
wanted
to
make
sure
to
bring
it
up
for
the
employee
assistance
program,
starting
in
January,
we
approved
a
contract
for
a
new
company.
We
used
to
have
mhn,
and
now
we
are
moving
to
a
company
called
concern.
It's
a
strange
name,
I
think,
and
it
was
discussion
about
the
assistance
program.
G
So
this
is
for
basically
crisis
mental
health
and
it's
going
to
change
from
five
sessions
to
eight
sessions
covered
under
this
program
per
incident
and
then
for
for
police
and
fire.
It
will
go
from
unlimited
sessions
to
20
sessions
per
incident
and
then
there's
some
additional
some
additional
benefit.
The
the
question
that
came
up
from
councilmember
Foley
who's,
the
liaison
to
the
the
police
and
fire
pension
board,
is
whether
this
would
apply
to
retirees.
G
This
is
not
a
benefit
that
applies
to
retirees,
but
one
of
the
things
that
I
and
I
know
that
there's
been
some
discussion
about
whether
or
not
to
extend
it,
but
there
seems
to
be
a
little
bit
of
confusion
about
what
mental
health
services
are
available
to
retirees
and
so
I
just
want
to
make
sure
that
this
board
understands
and
and
I
don't
know
Roberto
how
much
you're
helping
the
retirees
understand
that
their
their
regular
health
insurance
now
includes.
G
Mental
health
benefits,
that's
a
requirement
and
has
been
now
for
for
quite
a
few
years,
and
so,
if
you
have,
for
example,
Tizer
I'm
more
familiar
with
Kaiser,
if
you
have
Kaiser,
you
don't
even
need
to
go
directly
to
your
primary
care
physician.
You
can
just
call
the
Psychiatry
department
and
talk
to
them
and
get
a
referral.
G
There
is
some
time
not
just
because
of
Kaiser's
issues
which
you
may
have
seen
about
seen
in
the
paper,
but
there
there's
a
shortage
Nationwide
of
mental
health
professionals,
and
so
it
does
take
a
little
bit
of
time.
There
is
also
and
I
want
to
make
sure
everyone
is
aware
of
this,
a
new
instead
of
9-1-1.
If
you
are
having
a
mental
health
crisis
or
or
know
someone
who
is
immediately
suicidal
instead
of
calling
9-1-1,
you
want
to
call
988,
that's
a
new
Nationwide
number.
G
It
works
like
9-1-1,
but
you
go
directly
to
mental
health
professionals
that
has
been
active
since
July
1st
again
Nationwide,
including
in
this
County.
So
those
are
two
two
items.
I
thought
it
was
important
to
discuss
with
the
board
to
make
sure
the
board
was
aware
that
change
in
the
employee
assistance
program
it
doesn't
apply
to
the
the
retirees
but
they're,
it's
it's,
not
the
only
mental
and
frankly
it's
not
the
only
mental
health
benefit
that's
available.
And,
frankly,
it's
not
the
best
mental
health
benefit
that's
available.
G
The
one
that's
best
is
the
one
that
goes
through
your
health
care,
your
regular
health
insurance,
because
you
aren't
limited
to
a
specific
number
of
a
specific
number
of
visits,
and
that's
it.
B
All
right,
we
will
move
on
to
the
next
agenda
item
5c,
update
of
chiron's
projections
based
on
preliminary
investment
returns
and
discussion
in
action,
or
at
least
discussion
of
funding
methods
for
the
pension
and
opeb
plans,
with
potential
options
for
consideration,
so
I
believe
Mr
Hallmark
will
present
on
this
issue.
Yes,.
I
Good
morning,
thank
you.
Mr
chair
share
my
screen
here,
foreign.
I
We
have
two
parts
to
this
presentation.
The
first
part
we
wanted
to
provide
some
updated
projections
based
on
the
preliminary
investment
earnings
for
the
year
ending
June
30th.
These
projections
are
just
based
on
the
the
preliminary
returns
that
the
CIO
just
presented
and
do
not
reflect
any
changes
in
the
membership
or
any
of
that
sort
of
thing,
but
we
wanted
to
make
sure
people
had
an
idea
of
at
least
the
ballpark
range
of
where
we
are
going
to
be
with
projections
when
we
come
back
with
the
2022
valuation
results.
I
The
second
part
of
our
presentation
is
primarily
educational.
It
came
as
a
result
of
the
Actuarial
audit.
There
was
a
recommendation
that
we
do
in
educational
presentation,
on
the
the
funding
policies
and
methods
for
the
pension
in
opeb,
and
particularly
the
question
was
raised
whether
the
board
would
want
to
have
the
same
methods
for
the
oped
that
they
have
for
the
the
pension,
with
respect
to
asset
smoothing
and
amortization
in
particular,
so
the
presentation
is
primarily
educational,
so
that
you
understand
what
we're
doing.
I
Why
we're
doing
it
and
can
can
look
at
that?
We
in
that
process.
We
also
identified
a
couple
potential
tweaks,
so
we'll
get
into
those
at
the
end,
and
then
it
is
only
an
action
item
in
case
the
board
wants
to
make
a
a
decision
at
this
meeting
it
we
just
didn't
want
to
preclude
the
board's
actions
so
with
that
I'm
going
to
pass
it
to
Jackie
and
Steven
to
go
through
Jackie
first
to
go
through
the
updated
projections.
J
Good
morning,
everyone,
as
Bill
mentioned
this-
is
just
a
recap-
kind
of
of
the
last
two
valuation
results
and
what
we're
expecting
for
the
2022
valuation.
So,
on
the
the
in
this
chart
on
the
left,
there
you've
got
your
pension
history
and
on
the
right
is
the
opeb
history.
You
can
see
that
over
the
last
from
2020
to
2021
that
number
at
the
top
is
your
funded
status.
You
can
see
that
has
been
increasing
just
to
backtrack
a
little
bit.
J
J
That's
your
expected
market
value,
so
we
know
from
2022
and
2021
what
it
was
and
it's
matching
the
top
of
the
green
bar
in
2022,
because
that's
assuming
that
you
earned
your
expected
return
on
assets
so
just
through
this
is
looking
at
your
market
value
assets,
not
your
Actuarial
value
of
assets,
and
this
was
assuming
now
we
look
at
if
we
take
the
actual
preliminary
returns
for
the
year.
So
for
pension
it
was
minus
4.4
percent
for
opeb,
it's
minus
10
percent,
in
both
cases.
J
Obviously
it's
lower
than
our
expected
return
for
the
year,
so
you
can
see
that
your
actual
market
value
is
lower
than
what
we
expected.
So
what
this
does
is
it
drops
that
green
bar
that
green
part
of
the
the
bars
in
2022
and
it
increases
the
red
part,
the
liability,
the
total
bar
stays
the
same
because
we
haven't
done
the
valuation
yet
so
we're
assuming
you're
going
to
have
no
demographic
gains
or
losses,
but
you
can
see
how
that
affects
it.
It
drops
it.
It
makes
a
green
pot.
J
J
And
just
to
reiterate,
if
anyone
has
any
questions
along
the
way
feel
free
to
interrupt
us.
You
know
this
is
an
educational
presentation,
so
it's
important
that
if
anything,
if
there's
anything
in
here
that
you're,
not
sure
of
don't
don't
hesitate
to
ask
us.
G
F
J
So
on
in
the
first
on
side
number
two:
so
if
we
just
go
back.
G
However,
the
unfunded
is
greater
because
why.
J
No
sorry,
the
liabilities
for
2022
the
liabilities
we're
assuming
right
now
we
don't
have
the
actual
projected
liability
is
staying
the
same
as
the
previous
graph.
Oh,
but
in
this
graph
the
the
change
here
is
the
bar.
The
total
bar
is
staying
the
same,
but
you,
the
green
part,
is
decreasing
and
the
red
part
is
increasing,
so
the
total
bar
is
the
same
as
the
previous
one,
but
it's
just
the
allocation
of
the
liabilities.
Now,
whether
they're
unfunded
or
not,
that's
what's
changing
in
this.
In
this
slide.
J
So
the
last
two
slides
focused
on
the
market
value
of
assets,
but
we
want
to
switch
to
looking
at
the
Actuarial
value
of
assets
and,
what's
important
about
this
one
is
the
Actuarial
value
of
assets.
Is
the
acid
value
that
drives
your
contribution
amount
for
your
pension
plan?
Well,
the
opif
plan.
Your
asset
method
is
to
use
your
Market
values,
you
don't
have
an
Actuarial
value
of
assets,
but
in
the
pension
plan
you
do
so.
What
for
the
pension
plan,
you
have
a
five-year
smoothing
method.
J
So
you
look
at
your
gains
and
losses
over
the
last
five
years
and
then
each
each
year
those
gains
and
losses
get
phased
in
20
percent
each
year.
So
this
slide
shows
your
gains
and
losses
so
for
2018
through
2020
you
had
a
you
had
relatively
small
investment
losses
in
2021,
you
had
a
massive
investment
gain
and
then
now
for
2022
you're,
going
to
see
a
a
large
loss,
not
as
not
as
large
as
the
the
game
from
2021.
So
that's
a
good
sign
that
it
can
kind
of
offset
each
other
a
bit.
J
Points,
yes,
so
these
are.
These
are
the
bases
for,
for
the
smoothing
of
it,
there's
the
starting
points.
So
now
you
can
see
how
we
break
it
out
so
as
if
so,
for
the
2022
valuation
you're
going
to
show
how
much
of
each
of
those
last
five
years
is
recognized
within
your
Actuarial
value
of
assets.
So
at
this
point
the
2028
loss
will
be
fully
recognized
in
2022,
but
they're
2022
loss
you're
only
going
to
recognize
20
of
it.
J
J
And
this
year
just
shows
how
we
get
from
the
market
value
to
the
Actuarial
value.
So
this
is
this
exp.
This
is
expected.
As
of
June
30th
2022,
you
would
have
your
markup
value
of
about
a
2.7
billion
okay.
Now
what
you're
recognizing
is
how
much
of
those
previous
five
years
of
gains
and
losses?
Have
you
not
recognized?
Okay,
so
we're
looking
at
how
much
is
getting
deferred
to
Future
years
and
of
that
you're?
J
Okay,
what
you
can
see
here
is
that
your
true
value
of
assets
is
going
to
be
less
than
your
market
value
and
that's
simply
because
you're
deferring
more
of
the
gains
than
losses
at
this
point.
Obviously
that
can
change
from
year
to
year.
So.
I
D
J
J
On
the
next
slide
you
can
see
these
are
now
your
bars,
comparing
your
market
value
to
your
Actuarial
value,
the
funded
status.
So
once
again
the
bars-
those
are
your
total
liabilities.
You
can
see
on
the
left
and
the
right,
the
bars
match
for
2021
and
the
2022
preliminary
okay,
and
your
difference
is
between
these.
These
two
sets
is
the
asset
value
that
you're,
using
from
the
left,
is
the
market
value
and
on
the
right
is
the
Actuarial
value
of
assets.
J
The
right
is
what
your
contributions
are
going
to
be
based
on
is
a
on
a
market
basis,
you're
going
to
see
that
your
funding
status
decreases,
but
because
of
the
smoothing
method
on
the
right,
your
funding
status
is
actually
going
to
increase
a
little
bit
and
that's-
and
that's
that's
reflecting
that
smoothing
method
because
you're
deferring
those
gains,
so
this
just
shows
us
so
that
the
funding
percentage
on
the
right
that's
going
to
be
the
key
one,
because
that's
that's.
What's
driving
your
contribution
amounts.
I
And
in
particular,
this
two
billion
dollars
here:
1.98
billion
dollars.
You
know.
K
Hey
good
morning,
everyone
on
slide
eight,
so
now
Jackie
just
went
over
the
assets
and
the
liabilities
now
we're
just
going
to
talk
about
the
contribution
amounts.
This
is
these
are
the
city
contribution
amounts
and
they
are
based
on
the
Actuarial
value
of
assets.
So
what
we're
showing
here
are
pension
totals
so
on
the
left,
we
show
the
contribution
amount
for
the
fiscal
year
ending
2023
the
purple
part
of
the
bar
is
the
normal
cost.
K
So
that
is
the
cost
of
benefits
accruing
during
the
year
and
the
goal
part
is
the
amortization
piece.
So
this
is
amortization
of
unfunded
actual
reliability.
So
that
is,
you
know,
amortization
you
know
trying
to
get
the
plan
funded
up
and
that
that
is
dominated
by
tier
one
I
should
say
so.
The
2021
projection
is
the
line
you
see
connecting
the
two
bars
and
you
can
see
that
for
2024
there's
now
the
bar
is
now
slightly
higher
right.
So
the
there.
K
Were
two
things
going
on
the
the
gains
that
are
being
advertised
in
or
the
the
gains
that
are
being
phased
in
the
asset?
Smoothing
method
from
2021
offset
some
of
the
losses,
but
from
the
most
recent
year,
but
the
most
recent
years
losses
still
did
increase
the
contribution
slightly
from
our
prior
projection.
F
Can
you
can
you
tell
us
how
much
you
would
it
had
increased
in
terms
of
the
contribution
amount?
So
just
so,
we
have
a
final
point.
I
I
A
H
Correct-
and
maybe
this
is
on
this
too
by
everyone
but
I,
because
we
are
sitting
here
in
August,
2022.
I
want
to
make
sure
that
people
understand
the
basis
for
the
23
24
23
is,
is
the
current
fiscal
year
that
the
employee
has
many
contributions
from
July
1st
through
the
upcoming
June
30th
2023?
That's
the
2008.8
and
the
2,
and
the
24,
which
is
two
years
from
now,
is
the
expected
contributions.
At
least
estimated
today
will
be
close
to
210
for
the
fiscal
year
July
1st
23
to
June
30th
2024.
I'm.
H
Only
saying
that,
because
you
know
it's
sometimes
it's
hard
to
yeah,
that's
important
to
understand
why
we're
talking
about
24
when
we're
sitting
here
in
August
of
2022
and
again
Bill
I,
just
want
to
confirm
Karen
expect
this
number
is
not
too
very
Too
Much
from
the
actual
result.
Once
you
complete
the
evaluation,
correct
I
mean
you
do
have
the
asset
side,
but
you
still
need
to
perform
your
usual
actual
evaluations
and
everything
else.
On
the
liability
side,
correct.
I
Right
so
we
have
to
produce
the
valuation
on
the
liability
side.
We
will
be
coming
to
the
board
later.
This
fall
to
review
the
economic
assumptions,
and
so,
if
we
change
those
economic
assumptions
that
will
change
the
the
numbers
as
well
correct
and-
and
we
will
present
the
effects
at
that
time,
but
this
is
just
if
all
our
liability
assumptions
are
met
and
everything
goes
forward
as
projected
the
only
difference
we're
taking
into
account
is
those
preliminary
investment
earnings
well.
B
I
Not
flat
liabilities
we're
assuming
that
the
liabilities
grow
they
grow
with
interest
with
normal
costs
for
the
new
benefits
accrued.
They
decrease
for
the
benefits
that
have
been
paid
out
so
that
there's
a
bunch
of
moving
pieces
in
that
liability
projection,
but
it
assumes
that
all
of
our
assumptions
about
our
men.
Yes,
that's
right
that
during
the
year
yeah.
K
Thank
you
bill.
Could
you
show
tier
one
versus
tier
two,
really
quick
I
wanted
to
just
make
a
point
that
you
know
tier
one
still
dominates
right,
so
you
can
see
that
the
amortization
payments
the
gold
there
and
then,
if
you
compare
that
in
tier
two,
you
know
it's
roughly
one-tenth
of
the
size
and
the
OPEC
contributions
are
a
similar
level
to
tier
two
and
then,
when
we
show
the
total.
D
D
A
question
I'm,
sorry
sure,
on
the
tier
two,
the
difference
between
Tier
1
and
tier
2
is
only
a
half
a
percent,
because
we're
not
talking
about
benefits
here
so
I
mean
if
you're
tier
one
you
get
two
and
a
half
percent
per
year.
If
you're
tier
two,
you
get
two
percent
per
year,
you
know
of
when
you
retire
now,
although
tier
one,
you
can
retire
at
55
tier
two,
you
need
to
be
you
retire
at
62..
So
is
it
that
age
differential?
Why
is
it
so
different?
D
K
Well,
there
are
several
things
going
on,
but
if
you
compare
ongoing
costs,
the
normal
cost
is
is
not
you
know,
they're
at
16
million
for
the
tier
one.
What
was
it
20ish
yeah?
So
so
the
the
ongoing
cost
isn't
all
that
different.
The
population
is
older,
but
they
I
mean.
The
big
difference
is
that
the
the
tier
one
has
all
those
Legacy
liabilities
right?
So
it's
much
more
mature,
whereas
tier
twos
and
or
tier,
has
very
little
in
terms
of
ual
I'm.
Trying
to
you
know,
liability
applications.
H
A
I
Of
it
is,
though,
the
normal
costs
are
fairly
close,
because
the
there
is
the
difference
in
the
benefit
value,
but
there's
also
the
difference
in
the
number
of
of
members
covered.
Active
members
covered,
but
as
I
recall,
I
don't
have
the
numbers
in
front
of
me,
but
as
I
recall,
the
tier
one
and
tier
two,
the
number
of
active
members
is
fairly
close.
I
What's
different
is
almost
all
the
retirees
are
tier
one
right,
and
so
all
of
that
liability
is
in
the
tier
one
bucket
and
there's
nothing
comparable
to
that
in
the
team.
Okay
and
even
among
the
the
actives,
the
tier
one,
people
are
the
people
who
have
a
lot
of
service
and
the
tier
two
people
are
the
people
who
have
a
little
service.
So
the
there's
a
difference
in
the
liability
even
for
the
actives.
Just
because
of
the
difference.
D
They
have
when
you're
evaluating
the
retirement
liability.
You're
re,
you
know.
Let's
say
you
have
someone
who's
24,
you
know
and
just
joined
the
city
you're
still
assuming
that
they're
going
to
retire
at
62
and
their
life
long.
You
know
how
long
they're
going
to
live
and
blah
blah,
blah
and
and
so
you're
still
taking
that
whole
stream
and
trying
to
put
that
amount
in
right,
I
mean
so.
Yes,.
I
But
I'm
gonna
defer
that,
because
we
are
going
to
get
to
exactly
that
point
in
the
next
part
of
our
presentation
to
talk
about
how
the
funding
methods
work
and
divide
the
the
liability
over
an
individual's
career.
D
Yeah
and
the
retirees
the
people
that
are
actually
retired
now
the
unfunded
liability-
that's
also
looking
I
mean
most
of
the
impact,
is
investment
right
and
so
we're
looking
at
that
2008-2009.
That's
still
on.
I
Right
so
we
will
get
to
some
of
it
in
the
presentation
here
as
we
go
forward.
Yeah.
H
D
B
D
A
A
K
K
Okay,
so
I
think
we're
moving
on
to
yeah,
so
so
now
we're
showing
the
projected
contributions
out
into
the
future
and
we're
starting
here
with
with
the
pension
similar
to
before
the
the
gold
bars.
K
The
gold
portion
of
the
bar
is
the
unfunded,
actual
liability,
amortization,
the
the
opposition
layers
easy
to
sort
of
move
over
time,
and
then
the
purple
is
the
normal
cost
of
the
cost
of
benefits
accruing
each
year,
and
we
also
have
two
lines
you
can
see
along
the
top,
the
the
the
upper
one
in
lighter
blue,
representing
the
projections
in
in
2020
and
the
lower
one
representing
the
our
projections
in
in
2021.
K
So
so,
what's
going
on
there
well
2020
projections
were
before
the
the
asset
gains
that
occurred
right,
so
the
nearly
30
returns
purposely
are
ending
2021.
K
So
when
we
had
our
2021
projections,
you
see
the
dark
blue
line.
Those
came
down.
K
The
the
employer
cost
going
forward
and
so
now
we're
showing
results
with
the
2022
fiscal
year-end
losses.
So
you
can
see
the
the
amounts
come
back
up
a
bit
but
they're
not
as
as
bad
as
they
were
two
years
ago.
So
I
guess
you
say
they're
again,
they've
come
up
a
bit,
but
not
not.
They
don't
look
as
bad
as
they
did
a
couple
years
ago
and
we
yeah
and
then
when
we
add
in
the
opeb
results
again.
G
K
Know
tier
one
dominate
so
the
the
graph
looks
pretty
or
chart
looks
pretty
similar,
there's
another
20
million
or
so
in
there
each
year
for
the
open.
I
The
basic
story
is
the
the
great
returns
of
2021
really
lowered
the
projections.
The
losses
this
year
have
not
put
us
all
the
way
back
where
we
were
in
2020,
but
it's
somewhere
in
between
a
little
more
than
half
the
way
back.
I
So
now
we
want
to
talk
about
the
funding
methods
and
really
get
through
how
it
is
that
we
develop
those
contribution
patterns
and
how
we
assess
the
the
liabilities
and
and
what
the
methods
are
and
what
the
options
are
with
those
metrics.
I
So
again
on
this
part,
if
there's
something
you
don't
understand
or
have
a
question,
please
speak
up
as
we
go
along.
I
We're
going
to
start
with
how
we
project
the
benefits,
so
the
basic
liability
of
the
pension
plan
is
to
pay
the
benefits
in
the
future
that
have
been
promised,
and
so
we
start
our
valuation
process
by
projecting
those
benefits
into
the
future,
based
on
the
provisions
of
the
plan,
the
census
data
and
the
assumptions
that
we
get,
that
we
use
for
salary
increases
for
mortality,
retirement
rates,
Etc
and,
and
so
those
are
all
projected
out
in
the
future.
I
If
we're
looking
at
the
tier
one
pension,
it
is
a
closed
tier
with
some
minor
exceptions
for
new
hires
who
meet
the
definition
of
a
classic
employee,
and
so
this
projection
is
not
going
to
have
a
whole
lot
of
variability
in
it.
You
know
our
assumptions
can
be
off,
but
even
when
we've
made
significant
changes
to
the
assumptions
it
it
moves.
These
benefit
payment
projections,
just
mostly
slightly
especially
given
how
many
of
the
tier
one
members
are,
are
retired
for
tier
two.
I
This
this
projection
only
includes
the
tier
two
members
who
are
members
as
of
the
valuation
date,
and
we
are
constantly
adding
new
tier
two
members,
and
so
these
projections
are
going
to
constantly
grow.
As
we
add
more
layers
of
tier
two
members
on
they're
a
little
bit
more
volatile,
given
salary
increases
in
some
things
like
that.
That
may
differ
from
our
assumptions,
but
still
pretty
reliable
other
than
that
as
we
move
forward.
We're
going
to
keep
adding
on
the
opeb
group
is
also
predominantly
closed.
I
However,
as
we'll
show
later,
the
the
projected
costs
of
Health
Care
are
much
more
volatile
than
the
projected
pension
payments,
and
so
these
benefit
payments
that
we're
projecting
can
move
around
much
more
than
the
the
pension,
primarily
depending
on
the
the
costs
of
Health
Care
going
forward.
Foreign.
I
The
first
thing
we
do
is
we
take
those
projected
benefit
payments
and
then
we
discount
those
to
the
data,
the
valuation
based
on
our
discount
rate,
six
and
five-eighths
for
the
pension
and
six
percent
for
the
OPEC.
I
D
Bill
can
I
ask
questions.
Sure
you
go
back.
Can
you
explain
that
the
interest
part
again
and
because
it's
not
unfunded
liabilities?
So
right
you
know
no.
A
I
There's
a
little
yeah,
it's
something
out
there,
but
so
taking.
For
example,
the
2022
payments,
the
discounted
payments
to
the
2021
valuation
are
231
million,
and
then
we
had
8
million
in
interest
discount
because
we
expect
the
assets
we
expect
231
million
in
assets
to
earn
an
investment
return
of
8
million,
and
so
there's
enough
in
one
year.
Then
there's
enough
to
make
the
239
million
dollars
in
benefits.
So.
I
You
know
we
were
looking
at
oh
wait.
I
want
to.
D
D
I
Million
that
we're
projecting
in
benefit
payments-
okay,
but
if
we
look
at
it
here
that
2041
272
million
of
that
doesn't
appear
in
our
valuation,
because
it's
discounted
for
future
interest,
earnings,
okay
and
then
we're
only
showing
109
million
dollar
as
the
present
value
of
the
liability
for
that
Year's
benefit
payments.
I
I
No,
that
that's
good
all
right,
and
so
we
take
away
that
interest
discount,
and
these
are
the
discounted
benefit
payments
and
then
we
add
those
all
up,
and
that
gives
us
what's
called
the
present
value
of
future
benefits.
So
that's
the
value
on
on
the
valuation
date
of
all.
The
benefits
that
we
expect
to
pay
out
to
current
members
doesn't
take
into
account
new
members.
I
So
so,
if
someone
has
15
years
of
service,
if
you're
looking
at
it
on
an
individual
basis,
we're
assigning
a
liability
to
those
first
15
years,
that's
in
this
dark
gray
and
then
the
future
liability
or
what
they
may
earn
going
forward
is
in
the
light
gray,
and
so
you
can
see
here
for
the
tier
one.
That
light
gray
piece
is
a
very
small
piece.
That's
because
we
have
a
lot
of
retirees
who
have
no
light
gray
piece,
fewer
actives
and
the
actives
are
getting
closer
to
retirement,
so
they
have
less
future
service.
I
So
that's
a
a
relatively
small
piece
when
you
check
to
tier
two:
now
they
have
very
few
retirees,
almost
all
actives
and
their
service
is
much
more
limited,
so
the
liability
for
their
projected
benefits
is
mostly
attributed
to
Future
service
and
not
to
pass
service,
and
so
we
pay
for
that
in
the
normal
cost.
Each
year
we
have
a
schedule
that
will
pick
up
this
attribution
for
future
service
as
we
go
forward.
I
So
then
we
we
have
that
broken
out
the
the
attribution
for
past
service
that
becomes
our
actual
liability
for
our
funding
Target
and
we're
going
to
compare
that
to
the
assets.
And
then
we
have
a
slice
of
this
future
service
attribution
which
becomes
our
normal
cost
and
we'll
we'll
talk
in
a
little
bit
more
about
how
that
slice
gets
gets
done.
I
But
we
develop
our
contributions
based
on
a
couple
pump
components.
One
is
that
normal
cost
piece?
How
much
of
the
liability
are
we
attributing
to
the
next
year
of
service,
so
we're
we're
paying
for
that
piece?
We
pay
for
administrative
expenses
and
often
we
shorthand
the
description
and
the
normal
cost
includes
administrative
expenses.
I
So
I
just
wanted
to
call
it
out
here
and
then
we
have
a
payment
on
the
unfunded,
Actuarial
liability
so
on
the
charts
Stephen
was
showing
the
normal
cost
and
administrative
expenses
were
that
small
purple
bar
at
the
bottom
and
then
the
payment
on
the
unfunded
actuary
liability
was
the
the
gold
can.
D
I
I
I
The
tier
two
members
pay
half
of
everything
there.
There
is
some
limit
to
the
volatility
of
their
contributions,
but
but
they
pay
roughly
half
of
everything
and
then
the
op-ed
members
just
pay
a
flat
seven
and
a
half
percent,
and
the
city
pays
whatever's
left
now
for
the
opeb.
The
seven
and
a
half
percent
currently
covers
the
normal
cost,
the
administrative
expenses
and
a
little
bit
more,
and
so
the
city's
contribution
is
all
paying
down.
The
unfunded
liability.
I
Now,
when
we
set
up
so
we
we
have
to
set
up
a
process
for
assigning
the
normal
cost
and
for
payments
on
the
unfunded
liability,
and
there
is
not
a
single
answer
for
each
plan.
There's
a
range
in
what
it
boils
down
to
is.
There
are
three
different
objectives
that
plans
normally
look
at
and,
and
they
compete
a
little
bit,
and
so
the
the
first
and
most
important
one
is
benefit
security.
I
We
want
to
make
sure
that
those
benefits
that
are
promised
are
secure
and
and
can
be
paid
when
they
are
deep,
but
the
benefit
security
comes
from
a
couple
different
places.
First
and
foremost,
it's
the
ability
and
the
legal
obligation
of
the
planned
sponsor
to
make
future
contributions.
I
So
we're
very,
very
fortunate,
but
we
have
a
thriving
city
as
the
sponsor,
but
also
perhaps
more
importantly,
they
have
a
legal
obligation
to
pay
the
contribution
that
we
come
up
with.
So
when
you
read
in
the
paper
about
a
lot
of
plans
across
the
country
that
have
had
struggles,
a
big
portion
of
that
often
comes
from
the
fact
that
they
don't
have
that
legal
obligation.
I
So
the
the
Retirement
Board
and
the
actuaries
say
we
need
this
much
money
contributed
this
year
and
the
legislatures
or
the
cities
as
well.
That's
nice
we're
going
to
give
you
this
amount
and
I
I
was
at
a
conference
a
few
years
ago,
where
the
director
for
the
Illinois
teachers
plan
noted
that
it
was
the
75th
Street
year
that
they
had
not
received
the
amount
that
the
actuary
recommended.
I
So
so
that's
a
very
big
piece
and
very
important
that
we
have
that
and-
and
we
should
feel
fortunate,
the
security
of
the
benefits
are
obviously
also
dependent
or
on
the
amount
of
money,
that's
in
the
trust
and
how
that
trust
is
invested,
because
those
proceeds
from
the
trusts
can't
be
used
for
other
purposes.
So
it
provides
US
security
in
general
when
we're
looking
at
this
benefit.
I
Security
is
enhanced
if
we
have
shorter
asset,
smoothing
periods
and
shorter
amortization
periods,
because
it
gets
us
to
that
hundred
percent
funding
faster
if
we
shorten
those
so
that
improves
the
amount
of
money
in
the
trust
and
gets
us
on
on
target
with
those.
I
But
we
have
an
offsetting
concern.
We
need
some
level
of
contribution,
stability
and
predictability,
I
mean
if
we
were
just
ignoring
all
other
considerations,
we
might
say.
Well,
we
have
two
billion
dollars
in
unfunded
liability
City.
We
need
two
billion
dollars
this
year,
that
sort
of
approach.
I
If
we
could
actually
get
it
would
improve
our
benefit
security,
but
it
could
also
throw
the
sponsor
into
bankruptcy
or
or
make
it
very
difficult
to
manage,
maintaining
the
plan,
and
so
that's
what
you
see
really
is.
It
becomes
very
difficult
to
manage,
maintaining
the
plan,
and
so
then
there
the
sponsor
has
to
make
changes
to
the
plan,
and
so
those
significant
increases
or
decreases
just
the
volatility
of
the
the
contribution
can
create
problems
for
the
stability
of
the
whole
system,
in
particular.
I
I
So,
in
the
extreme
contribution,
stability
and
predictability
is
enhanced,
with
longer
asset,
smoothing
periods
and
longer
amortization
periods,
and
so
there
there's
that
inherent
conflict
between
those
those
two
objectives.
I
In
the
ideal
world,
each
generation
of
taxpayers
would
pay
for
the
public
employees
who
provide
services
to
those
taxpayers,
and
so
that
would
mean
that
we
would
accumulate
Assets
in
an
orderly
manner
during
a
member's
career
so
that
we
had
the
full
amount
needed
to
pay
all
their
retirement
benefits
at
the
time
they
retired
that's
what
we
would
strive
for,
but
we
always
have
the
challenge
where
we
have
fallen
short
from
the
past
or
in
excess
from
the
past,
and
so
how
do
we
balance?
I
I
How
do
you
spread
that
over
the
future
Generations,
we
can't
go
back
to
the
prior
generation
of
taxpayers
and
get
the
money,
and
so
we
have
to
figure
out
how
how
we
balance
that,
if
we
do
it
very
over
a
very
short
period,
we
are
hitting
the
current
generation
of
taxpayers
harder
than
if
we
do
it
over
a
long
period.
I
K
Okay,
so
as
as
bill
was
discussing,
there
needs
to
be
a
way
to
assign
the
costs,
and
so
here
on
slide
18.
We
have
a
summary
of
the
current
funding
methods
for
both
the
pension
and
the
op
or
medical
plan,
and
I'll
start
off
with
the
Actuarial
cost
method
which
we'll
get
to
in
a
minute.
But
it
is
the
end.
It's
called
the
entry
age,
normal
method,
a
level
percent
of
pay,
and
what
we'll
look
at
that
on
on
a
future
slide,
I
would
put
out
a
few
key
differences
here.
K
You
know
the
pension
plan
and
the
medical
plans,
I
mean
they're
different
different
animals,
and
so
we
do
have
some
of
the
methods
being
different.
One,
in
particular,
is
the
asset
evaluation
method.
So,
as
we
discussed
earlier,
there's
five
year,
asset
smoothie
on
the
pension
side.
That
is
not
there
on
the
OPEC
side,
their
the
amortization
method.
So
how
do
you
you
know?
K
How
do
you
fund
up
the
unfunded
portion
as
well
as
just
to
discussing
there's
a
layered
amortization
approach
in
both
cases
and
the
periods
themselves,
largely
similar
I?
Don't
need
to
go
into
all
the
details
there.
One
thing
I
would
notice,
is
tier
two
that
gains
and
losses
and
assumption
changes
are
over
10
years.
So
it's
it's
a
much
a
less
mature
plan
and
a
shorter
period
was
set
up
there
just
to
I,
guess
keep
it
from
from.
K
You
know,
from
building
up
there's
some
unfunded
and
then
on
the
another
key
difference
is
the
amortization
payment
increase
rate?
So
so
you
have.
You
know
you
have
an
unfunded
piece
that
you're
amortizing
over
a
certain
number
of
years
and
on
the
pension
side,
those
are
growing
at
2.75
a
year
with
the
intention
of
you
know,
keeping
it
as
more
of
a
level
percent
of
payroll
right
right
and
and
that's
important
on
the
pension
side,
because
those
those
payments
are
so
large.
D
Give
me
this
a
little
more.
So
what
are
you
trying
the
emerton
so
that
payment
increase
rate
is
that
supposed
to
be
the
salary
increase?
Is
that
what
is
that
I?
Don't
understand
we'll.
I
Get
into
that
in
a
minute.
The
key
here
is
just
that
on
the
pension
plan,
the
payments
each
year
are
designed
to
increase
and
on
the
opeb
plan,
they're
not
and
we'll
get
into
you.
I
K
Right,
yes,
yes
and
then
another
another
adjustment
you
can
make
to
an
amortization
schedule
is
to
phase
it
in
or
out
right.
So
so
have
it.
You
know,
have
it
phase
in
on
the
front
and
phase
out
on
the
back,
which
is
is
essentially
smoothing,
and
that
is
present
on
the
open
side,
but
not
on
the
pension
side
and
we'll
talk
about
that
as
well
and
then
finally,
output,
smoothing
so
once
you've,
you
know
determined
your
cost
using
a
cost
method.
Do
you
apply?
K
Do
you
wrap
a
cord
or
a
minimum,
or
do
your
you
know
ceiling?
What
do
you
do
to
that
at
the
end
of
the
day?
So
there
are
a
couple
things
that
are
done
there.
K
Okay
so
so
we
talked
about
the
entry
age,
normal
method,
on
the
on
the
prior
slide
and
that's
what
the
plans
are
using,
but
we
want
to
talk
a
little
bit
about
other
other
cost
methods.
So
so
the
cost
method
is
how
you
you
know,
as
bill
was
discussing
earlier,
there's
a
there's,
a
piece
for
past
service
and
a
piece
for
future
service,
and-
and
you
know,
how
are
you,
how
are
you
allocating
excuses?
How
are
you
coming
up
with
your
normal
cost
and
in
in
the
private
sector?
K
The
the
unit
credit
is
is
prescribed
by
law
for
for
plans,
and
so
so
we're
showing
the
unit
credit,
which
the
unit
credit
normal
cost
rate
and
actual
liability
here
for
a
sample
member
hired
at
age,
30,
retired
at
age,
60
and
the
unit
credit
essentially
says:
okay,
what
how
did
your
recruit
benefit
change
and
you
know
give
or
what?
K
C
K
K
As
sort
of
the
accumulated
liability
from
from
the
normal
cost
that
come
in
each
year
right
so
again
it
starts
out
very
low
and
it
ends
up.
You
know,
really
steep,
so
the
accrued
liability
increases
really
fast
late
in
the
career.
So
that's
the
unit
credit
method.
That's
that's!
Not
the
method
we're
using.
So
let's
look
at
the
entry
age
method
with
the
entry
age
method
does
is.
Is
you
look
at
the
the
year
when
someone
enters
the
plan
here,
age,
30.
K
and
and
you
set
up
a
an
attribution
period
through
retirement
right,
so
here
we're
saying
100
retirement
at
age,
60.
and
then
what
you
do
is
you
you
figure
out
the
present.
You
know
the
present
value
of
that
benefit
and
allocate
it
over
the
career,
but
but
in
a
manner
that
keeps
it
as
a
11
percent
of
pay.
K
You
can
do
it
as
a
level
dollar
or
there
are
other
ways
to
do
it,
but
here
we're
doing
it
as
a
level
percent
of
pay
and
so
that
normal
cost
rate
says
at
a
stage
level
throughout
the
career,
and
you
can
see
that
so,
if
you
end
up
with
a
much
higher
normal
cost
rate
early
in
someone's
career
in
a
lower
rate
later
in
the
career.
Now
this
is
a
on
an
individual
participant
right.
So
you
have
a
whole
population
of
people
at
different
ages
at
any
given
time.
K
But
but
here
we're
focusing
on
individual
participants
to
show
how
this
how
this
works
and
then
the
actual
liability
ends
up
at
the
same
point.
But
it's
right,
there's
more
costs
along
the
way.
K
It
just
provides
a
more
stable
contribution
rate
rather
than
having
that
sort
of
steep
curve
to
it,
and
so
that
so
so.
This
is
why
most
most
I
don't
like
all
yeah
all
public
plans,
essentially
we're
using
the
entry
age
method,
cost
method.
K
Okay,
so
so
now
we're
going
to
switch
over
to
asset
valuation
methods.
So
we
talked
about
the
five-year
smoothing
there.
I
mean
the
point
of
asset
smoothing
is
is
to
reduce
the
volatility
and
contributions
right
and
there
are.
There
are
things
you
can
do
you
can?
You
can
have
longer
periods,
shorter
periods,
usually
there's
for
for
longer
periods,
there's
often
a
corridor,
a
corridor
being
a
certain
percent.
You
you
want
to
be
within
a
certain
threshold,
a
certain
percentage
of
your
market
value
right.
K
So
you
don't
you
don't
want
a
method
that
gets
too
far
away
from
your
market
value
so
that
that's
the
point
of
corridors
but
Corridor
is
also
undermine
your
objective
of
smoothing
right.
So
if
you,
if
you
put
a
corridor
and
if
your
Corridor
was
one
percent,
you
could
never
be
within
more
than
one
percent
of
your
market
value
of
assets.
You
know
most
of
your
civilian
would
go
away,
but
so
so
here
we're
showing
on
the
left
asset
value.
K
So
this
is
the
Actuarial
value
of
assets
right
used
to
determine
contributions
and
that's
the
yellow
bar
with
five-year
smoothing
or
the
side
of
the
yellow
line,
and
the
blue
line
is
just
the
market
value.
So
what
we're
illustrating
here
is
two
years
of
bad
returns,
so
negative
25,
followed
by
negative
10
percent,
and
you
can
see
the
market
value
dips
and
then
recovers
and
the
gold
the
with
the
smoothing
and
it
stays
right.
K
It
stays
a
little
higher
in
those
those
for
five
years
and
as
those
get
smoothed
in
and
then
eventually,
you
know,
ends
up
in
a
similar
place,
but
on
on
the
right
and
then
there's
some
difference
there,
because
the
contributions
flowing
a
little
differently.
But
on
the
right,
you
can
see
the
city's
contribution
rate.
So
here
we're
showing
the
the
again
the
blue,
being
the
market
value.
So
when
the,
if
it
was
just
if
we're
just
using
market
value,
to
determine
that
actually
it'll
contribution,
sorry
the
ADC.
K
If
I
was
just
determined
using
market
value,
it
would
really
spy
right
because
the
assets
have
dropped.
But
once
you
put
the
smoothing
in
place,
you
can
see
that
that
there's
a
much
less
drastic
Spike
there
for
a
slow
increase
and
then
it
ends
up
at
the
same
point
in
the
out
years.
K
K
But
again
the
key
point
of
of
smoothing
is
to
have
more
stable
contributions,
less
volatility,
and
so
there's
also
a
few
illustrations
here
of
okay.
Well,
what
if
you
had
a
shorter
like
three-year
smoothing
with
no
corridor,
so
that
that
gives
you
more
of
a
spike
right,
because
there's
less
smoothing
is
not
as
bad
as
having
a
market
value,
but
you
know
less
smoothing.
You
could
put
it
okay
and
then
I
guess
the
other
thing
would
be
a
put
a
corridor
around
the
five
years.
For
me
right
so.
A
K
That
that
sort
of
undermines
the
point
of
soothing
your
contribution,
you
can
see
there's
a
bit
of
a
spike
because
the
there's
a
20
Corridor,
so
the
actual
value
wasn't
within
20
of
market,
so
it
could
set
to
20
of
market
right
and
that
causes
a
spike
in
the
contribution.
I
This
is
the
method
the
police
and
fire
plan
uses
they.
They
do
have
the
20
Corridor,
but
after
2009,
a
lot
of
plans
that
had
a
20
Corridor
got
rid
of
it
because
it
just
created
a
spike
in
their
contributions.
K
If
you
had
a
corridor
there
you
would,
you
would
end
up,
say
your
Corridor
was
20,
then
your
actual
value
could
not
be
less
than
80
of
the
market
value
right.
So
there's
that
20
20
above
or
below
the
market
value.
So
that's
the
corridor.
K
K
In
the
year
with
extreme
gains,
you
would
be
at
the
top
of
the
corridor
120,
so
it
it
it
limits
the
smoothing
and
so
that
the
tighter
that
Corridor,
the
less
smoothing
there
is
if
the
corridor,
you
know
if
it
was
Zero,
you
would
just
be
at
market
value,
but
you
can
see
the
the
spike
there
on
the
purple
yeah
on
the
right
side,
the
city
contribution
rate
that
that's
with
a
corridor
and
what?
K
I
So
so
I
would
say,
though,
for
these
purposes
we
don't
need
to
go
in
too
much
detail
here,
because
we
don't
have
a
corridor
and
we
aren't
recommending
that.
We
add
one
and
actually
wear
a
lot.
It
didn't
recommend
adding
one,
it's
just
being
aware,
primarily
because
police
and
fire
does
have
a
corridor
there's
a
slight
difference
between
the
the
two
plants.
K
Yeah
yeah
I
think
the
key
takeaway
is
that
it
it
reduces
the
effect
of
smoothing
and
then
the
the
final
option.
We
were
illustration
we're
going
to
show
here
is
a
longer
period,
seven
years
and
typically
with
longer
periods,
you
would
have
a
corridor,
so
it's
40
Corridor
similar
results
a
little
longer
smoothing
period.
So
the
contribution
of
the
rise
is
a
little
more
slowly
but
foreign
again
there's
a
balance
to
be
struck
between
how
how
quickly
or
slowly
you
want
you
want
things
to
to.
I
Be
so
that's
right,
the
vast
majority
of
public
plans
use
five
years.
The
second
most
common
would
be
seven
years.
I
think
so
in
that
five
to
seven
is
kind
of
The
Sweet
Spot
we're
we're
not
suggesting
any
change
from
the
five
years.
So
I
think
we
can
just
move
on
from
that
sure.
I
So
the
more
important
piece
for
you
to
understand
is
how
we
set
up
the
amortizations,
so
we
have
our
full
funding
Target
here
and
then
there's
the
actual
value
of
assets
and
the
unfunded
liability
and
and
I'm
really
going
to
just
focus
on
how
we
do
it
for
the
tier
one
pension,
because
that's
the
the
big
piece
here,
and
so
we
take
this
unfunded
liability.
But
we
don't
take
it
as
a
block
like
this.
It's
actually
composed
of
all
these
different
layers
that
have
different
sources.
I
I
And
so
when
we
do
that-
and
we've
shown
this
to
you
in
the
past-
you
stack
up
all
these
payments
for
all
these
layers
in
a
given
year
and
that
deter
the
total
of
those
determines
our
amortization
payment
and
so
there's
a
schedule
that
goes
out
25
years
for
the
those
payments.
I
The
big
piece
was,
we
established
this
in
2009,
and
so
this
big
blue
block
is
the
entire
ual
from
2009
being
amortized.
It
was
amortized
over
30
years
from
2000
nine,
and
so
this
is
the
the
last
payments
in
fiscal
year
ending
2040,
and
when
that
goes
away,
we
will
expect
to
see
a
significant
drop
in
the
contribution
rate,
and
so
the
the
boards
policy
really
focuses
now
on
how
we
set
up
these
payment
schedules
for
each
layer.
I
So
I
wanted
to
just
show
you
a
little
bit
of
the
Dynamics
here
and
so
that
you
get
a
sense
for
for
how
we
balance
these
things.
In
the
amortization
methods,
our
amortization
periods
are
20
years
for
gains
and
losses
and
25
for
Ascension
changes
and
kind
of
the
basic
approach
in
the
public
sector
is
to
do
them
as
a
level
percent
of
payroll,
so
that,
like
that
normal
cost
that
ends
up
being
a
level
percent
of
payroll,
the
payments
are
a
level
percent
of
payroll.
I
Well,
on
20
years,
this
is
chart
over
here
is
showing
the
decline
in
the
remaining
balance.
I
This
is
the
payment
as
a
dollar
amount,
and
so
in
this
example,
we're
assuming
payroll
goes
up
three
percent
a
year,
so
the
payments
increase
by
three
percent
a
year.
The
idea
is
that
that
should
be
a
level
percent
of
payroll,
and
so
in
our
contribution
rate,
that
would
be
a
flat
amount
on
the
opeb
side.
We've
done
the
something
more
akin
to
your
mortgage,
where
the
actual
payments
are
a
level
dollar
amount
which,
if
our
payroll
projections
are
correct,
should
be
a
declining
percent
of
pay.
I
I
One
of
the
issues
we
look
at
and
the
reason
we
don't
really
go
beyond
25
is,
if
you
look
at
this
remaining
balance
as
a
level
percent
of
pay,
it
it's
kind
of
flat
we're
not
really
paying
off
any
portion
of
it
for
like
four
or
five
years,
and
then
it
starts
to
come
down.
If
we
go
out
to
like
30
it,
it
actually
increases
the
remaining
balance
and
then
starts
to
come
down
and-
and
so
that's
called
negative
amortization,
and
we
try
to
avoid
that
as
as
much
as
possible.
I
So
the
normal
recommendations
are
15
to
20
years
or
gains
and
losses
and
15
to
25
years
for
assumption
changes.
We've
tended
to
be
at
the
longer
end,
which
provides
more
stability
but
primarily
because
the
size
of
our
unfunded
made
it
difficult
to
pay
for
it
over
a
shorter
period.
I
We
also
looked
at
well
one
of
the
issues
that
has
come
up
with
some
plans.
Is
they
project
a
payroll
growth
and
then
they
don't
achieve
it?
And
so,
if
you,
if
you
set
up
your
payments
at
three
percent
payroll
growth,
that's
supposed
to
be
a
level
percent
of
pain
that,
if
your
payroll
only
Grows
by
two
percent
or
zero
percent
that
ends
up
being
an
increasing
percentage
of
pay.
I
So
to
be
conservative,
we
used
for
this
plan.
We
used
2.75
for
police
and
fire.
We've
brought
it
down
to
two
and
a
quarter,
which
was
the
inflation
assumption.
I
Let
me
so
it's
just
a
minor
tweak
in
I
was
actually
the
idea
of
tying
it
to
the
inflation
assumption
came
from
something
that
s
p.
Global
had
put
out
in
their
ratings
being
concerned
that
some
of
these
percent
of
payroll
growth
numbers
were
too
high,
and
so
they
set
a
marker
of
you
trying
to
keep
those
payments
down
to
inflation
so
that
they
were
real
dollars.
I
D
And
but
the
city
does
not
recognize
the
inflation
rate
as
a
variable
when
they
look
at
their
cost
of
living
for
employees.
It's
made
very
clear
that
that's
I
mean,
of
course
you
know
in
the
back
of
their
mind,
they're
hearing
it,
but
it's
not
part
of
the
negotiation.
I
Right
so,
the
idea
here,
though,
is,
is
to
track
more
how
Revenue
increases
and
and
so
and
based,
not
on
actual,
but
what
we're
expecting
inflation
to
be
in
the
future.
So
we
would
not
we're
not
going
to
increase
our
assumption
to
nine
percent.
It's
more.
What's
our
long-term
expectation
for
inflation
that
we
would
be
looking
at
currently
we're
using
two
and
a
quarter.
That
I
would
expect
that
when
we
review
that
we
may
be
looking
at
increasing
now.
D
And
I'm
just
curious
what
so
I
assume
you're
getting
that
through
an
Actuarial
board,
or
you
know
what
they
an
expectation
of
that
I
mean.
Where
are
you
getting
your
inflation
indicator.
I
So
I
we
do
that
every
year,
with
our
review
of
the
economic
assumptions,
a
variety
of
data
points,
including
sort
of
what
Market
expectations
are,
what
investment,
Consultants
expectations
are,
and
a
survey
of
professional
forecasters
published
by
the
Federal
Reserve,
so
we're
looking
at
all
those
pieces
to
develop
our
our
inflation
assumption,
we'll
be
back
to
you
with
that
later,
this
fall
so
that
you
can
see
what
those
expectations
are.
I
A
I
If,
if
we
were
to
go
to
something
that
was
tied
to
the
inflation
assumption,
then
yes,
that
would
that
would
impact
how
we
did
the
amortization.
The.
I
Do
you
use
they
use
two
and
a
quarter
and
they've
they've?
It's
a
separate
assumption
that
they
set
it
with
reference
to
the
inflation
assumption.
J
I
Now
this
is
to
get
at
the
point
that
was
raised
in
the
Actuarial
audit
about
the
combination
of
asset,
smoothing
or
and
amortization
versus
a
phase
in
out
amortization.
So
for
the
pension
plan
we
use
asset,
smoothing
and
a
straight
amortization
for
the
opeb
plan.
We
don't
use
asset
smoothing,
but
we
use
a
phase
in
out
amortization,
and
this
technique
was
originally
developed
by
Alan
Milligan,
who
was
the
chief
actuary
at
Calpers,
and
he
noted
that
when
you're
using
a
five-year,
this
illustration
is
five-year
asset,
smoothing
with
a
15-year
amortization.
I
Then
the
next
year
you
take
the
next
20
and
amortize
it
over
15
years
and
so
on
until
you've
done
that
for
five
years,
so
that
initial
investment
gain
or
loss
in
this
structure
is
actually
getting
paid
for
over
19
years,
because
you're
only
recognizing
twenty
percent
of
it
each
year
for
five
years
and
then
amortize
it,
and
so
that
that's
we
do
this
right
now
on
the
pension
side,
only
with
a
20-year
amortization.
I
So
our
total
period
to
pay
off
an
investment
Gainer
loss
is
24
years
when
you
combine
them,
but
I
think
mainly
his
issue
was:
he
did
not
want
to
have
to
explain
asset
smoothing
to
over
3
000
employers
and
all
the
members
of
the
California
Assembly
and
all
their
stakeholders
every
year
and
and
so
the
asset
smoothing
was
a
complex
thing
to
to
explain,
and
so
he
pointed
out
well,
we
could
just
create
an
amortization
schedule
that
mimics
that
whole
thing
and
that's
what
the
phase
in
out
amortization
is
now.
I
I
Well,
there's,
let
me
there's
a
difference
between
pension
and
opeb
that
I
want
to
get
at,
so
this
chart
is
showing
the
investment
gain
or
loss
I've
made
the
numbers
positive,
whether
they
are
again
or
loss
just
so
that
we
can
see
the
magnitude
of
them,
and
this
is
the
pension
side
versus
the
opeb
site,
and
you
can
see
when
we
just
the
scales
are
different,
but
the
pattern
is
very
similar
between
pension
and
opeb.
I
Just
looking
at
the
investment
returns
where
the
difference
is
is
when
we
add
in
the
liability
gain
or
loss,
there's
very
little
compared
to
the
investment
gain
or
loss,
the
liability
gain
or
loss
on
the
pension
side
is,
is
really
small,
and
this
is
looking
at
the
average
here.
So
on
investment
returns,
it
was
140
million
versus
22
million
on
liabilities
where,
as
on
the
opad,
the
investment
returns
average
17
million,
but
the
liabilities
average
43
million.
I
So
that,
and
and
that's
really
because
of
changes
in
health
care
costs,
health
care
costs,
go
up
and
down
and
fluctuate
and
add
a
level
of
volatility
to
the
opeb
liabilities
that
just
isn't
there
on
the
pension
side
and
and
so
back
in
2017,
we
said.
Well,
we
really
need
something
to
help
smooth
the
liability
experience,
as
well
as
the
investment
experience
on
the
opeb
side,
and
we
also
threw
in
the
assumptions
on
the
op-ed
side,
because
when
we
change
Trend
assumptions,
it
really
moves
the
liabilities
around
as
well.
I
So
it's
not
just
the
discount
rate
it
it's
the
health
care
trends
that
go
off
50
years
in
the
future,
and
so
that's
when
we
switch
the
opeb
plan
to
use
essentially
the
equivalent
of
three
years,
smoothing
with
a
20-year
amortization.
Now
it's
also
level
dollar
but
we're
just
using
this
amortization
method.
We
don't
actually
break
out
layers
each
year,
we
just
phase
in
the
amortization
payment
and
that's
why
we
just
use
the
market
value
of
assets.
I
We're
relying
on
this
to
smooth
we're
using
a
shorter
smoothing
period,
because
the
op-ed
plan
is
smaller,
and
so
the
idea
is,
we
can
tolerate
a
little
bit
more
volatility,
but
that's
the
rationale
for
for
the
for
why
we're
doing
this
on
opeb,
but
not
on
the
pension?
I
I
We
used
three
years
because
opeb
is
smaller,
and
so
we
can
tolerate
more
volatility,
whereas
on
the
pension
we're
using
five.
But
we
use
the
the
phase
in
out
amortization
because
we
want
to
smooth
the
volatility
of
the
liability
impact
of
the
health
care
cost
volatility,
as
well
as
the
asset
volatility,
whereas
on
the
pension,
we're
only
concerned
about
the
asset
volatility
and
so
we're
only
smoothing
the
assets.
D
I
I
D
I
assume
the
medical
costs
are
offset
also
by
Medicare,
as
people
get
to
Medicare
age.
You
know
right,
yes,
okay,
but
because
tier
one
can
retire
at
50
or
or
whenever,
whenever
they
had
30
years
and
certainly
at
55,
they
can
those
medical
costs
are
not
offset
by
Medicare
at
that
age
plus.
If
you
have
your
children,
that's
not
Medicare,
either.
I
I
So
there's
been
a
lot
of
information,
a
lot
of
Concepts
put
out.
We
mostly
wanted
to
get
the
education
component
done
and
are
happy
to
take,
take
questions
on
it.
We
think
all
of
the
current
methods
are
reasonable,
they're
more
than
reasonable.
We
think
they're
really
within
the
The
Sweet
Spot,
for
both
of
these
plans
and
I
think
that
was
backed
up
by
the
Actuarial
audit.
I
I
You
should
not
feel
obligated
to
consider
them
at
all,
because
the
current
methods
are
just
fine,
but
we
do
need
to
at
least
raise
the
one
that
was
raised
in
the
Actuarial
audit,
which
is
you
know,
we
could
use
the
same
method
for
open
and
pension
and
they
were
suggesting
that
we
could
just
smooth
the
assets
on
the
op-ed
and
not
smooth
the
liabilities,
so
that
so
that
was,
that
was
one
on
the
pension
amortization.
I
There
are
two
pieces
that
we
thought
could
be
looked
at.
One
is
our
gains,
and
losses
are
amortized
over
20
years.
Police
and
fire
is
over
15..
Those
are
15
to
20
is
kind
of
the
recommended
range,
so
we're
fine
with
with
both
of
those,
but
if
there's
a
desire
to
move
Federated
to
15..
I
This
would
be
a
good
time
to
start
a
phasing
of
that
approach,
because
we
could
tie
it
to
that
big
2009
ual
layer
that
has
17
years
remaining
and
we
could
use
that
to
help
us
March
down
and
it
may
actually
have
the
effect
of
reducing
how
big
of
a
drop
that
is
in
2040,
but
the
main
impact
is
way
in
the
future.
So
there's
no
urgency
to
do
it
unless
you
are
wanting
to
move
that
20-year
period
to
15
and
I'll.
Show
you
that
impact
in
just
a
second.
I
The
second
thing
we
could
consider
is
that
2.75
percent
increase
rate
we
could
tie
that
to
our
inflation
assumption.
I
did
not
put
an
illustration
in
here
for
that
I
think
if
the
board
was
interested
in
doing
that,
we
would
want
to
present
that
when
we
are
setting
the
inflation
assumption
so
that
you
can
see
what
it
would
be
because
if
we
change
our
inflation
assumption,
it
would
have
a
different
impact
I
and
on
the
the
opeb
side,
this
is
just
one.
I
You
could
consider
that
we
set
in
an
initial
ual
in
2017
that
does
not
have
a
phase
out
to
it.
So
there's
a
drop
off
in
cost.
You
could
add
a
phase
out
that
I
have
an
illustration
for
that.
But
again,
the
impact
of
that
is
is
quite
a
ways
in
the
future,
and
so
it's
not
not
something.
The
board
meets
to
urgently
address.
I
So,
looking
looking
at
the
idea
of
migrating
from
20-year
amortization
for
gains
and
losses
down
to
15.,
what
we
did
is
we
we
reduced
periods
to
to
match
up
with
this
the
end
of
the
2009
layer
and
it's
interesting
because
we
have
some
gains
that
from
the
2021
investment
returns
and
expected
in
the
future
that
may
help
offset
you
can
see
the
impact
is
negligible
or
expected
to
be
negligible
for
the
next
10
12
years
and
then
have
a
slight
impact
going
forward.
I
So
there's
there's
no,
no
real
urgency
to
to
do
this.
If
we
do
continue
to
get
the
the
gains
this,
this
teal
blue
line
is
what
the
revised
net
contribution
would
be
and
the
dark
blue
is
the
current
and-
and
so
you
see
out
here,
we'd
have
slightly
lower
contributions
and
then,
after
the
2009
base
drops
off,
we'd
have
slightly
higher,
so
it
it
does
reduce
the
amount
of
that
cliff.
I
But
it's
not
I
I.
Don't
know
that
I
don't
I
to
me
that
change
is
not
what's
compelling.
What
would
be
compelling
is
if
the
board
wanted
to
move
from
20
to
15.
Now
is
a
good
time
to
do
it,
because
it
would
have
very
little
impact
on
current
contributions
for
quite
a
while.
B
So
going
back
to
slide
29.
If
we
could,
for
the
moment
you've
you've
outlined
things,
we
quote
could
change.
But
what
is
your
recommendation?
What
should
we
change,
based
on
your
best
judgment,
so.
I
All
of
these
things,
all
of
these
options
are
within
really
the
heart
of
really
good,
Actuarial
practice
and
recommendations,
but
there's
a
range
within
those
that
is
based
on
what
what
boards
prefer
and
what
they
think
fits
their
their
situation.
I
B
Well,
I've
been
advised
by
Council
that
we
should
probably
consider
any
recommended
changes
only
after
reviewing
a
more
formal
Memo
from
Chiron
on
the
pros
and
cons.
But
what
I'm
sensing
is
you're
not
actually
recommending
any
changes
from
our
current
assumptions
or
practice.
I
A
I
A
I
And
we
are
very
reasonable,
they
have
different
pros
and
cons,
and
so
we
would
just
focus
on
on
those
changes
right.
A
Yeah,
if
I
may,
for
the
board,
maybe
I
can
the
chairs
question
in
a
slightly
different
way.
Okay
and
and
I
want
to
get
out
of
the
weeds
bill
for
a
minute.
Excuse
me
for
calling
that
the
weeds,
where
we've
been
in
a
lot
of
brand
new
other
details.
So
let
me
let
me
combat
it
this
way.
A
This
plan
has
been
chronically
and
woefully
underfunded.
For
a
long
long
time,
police
and
fire
has
gotten
to
90
percent
funded
this
plan.
It
remains
stubbornly
at
or
under
60
percent
funded,
which
I
think
you'll
agree
by
national
standards
is,
is
out
of
bounds
or
for
a
plan
where
the
plan
sponsors
legally
obligated
to
make
contributions
so
to
get
at
this
a
different
way
of
all
the
things
that
you've
shown
the
board
all
the
techniques.
A
That
would
improve
the
funding
of
our
members
benefits
and
make
a
real
impact
on
on
the
on
the
Sounder
funding
of
our
our
benefits
and,
and
maybe
another
way
to
look
at.
That
is
how
do
we
keep
tier
two
from
becoming?
What's
happened
to
tier
one,
it's
another
good
comparison,
tier
one.
The
people
who
are
are
promised
those
benefits
in
tier
one
who
are
retired
or
are
going
to
be
retiring.
A
The
next
several
years
are
at
significant,
in
my
opinion,
that
significant
Jeopardy
of
our
being
able
to
meet
the
benefit
payments
2009
may
have
been
an
aberration,
but
that
was
13
years
ago.
So
what
of
all
these
techniques?
Would
you
recommend
to
the
board
either
today
or
in
the
subsequent
meeting?
So
you
get
a
chance
to
think
about
it.
That
would
actually
improve
our
funded
status
from
60
to
90
percent.
I
So
what
we
have
established
so
first,
let
me
address
tier
two.
We
we
sat
and
Stephen
pointed
this
out.
We
sent
an
amortization
period
of
10
years
for
tier
two,
and
that's
because
the
volatility
of
the
contribution
is
very
limited
in
tier
two,
and
so
by
shortening
that
amortization
period.
We
keep
it
closer
to
a
hundred
percent,
regardless
of
experience
going
forward
because
we're
getting
we're
paying
off
any
ual
over
a
shorter
period
tier
one.
If
we
could
reduce
everything
to
10
years,
we'd
get
to
90
much
faster.
I
I
So
shortening
those
amortization
periods
would
help
us,
but
the
trade-off
is
particularly
if
we
do
it
on
the
current
ual
is
that
we
are
going
to
increase
the
contributions
potentially
significantly
the
idea.
The
idea
of
moving
the
that
we
put
forward
here
of
moving
the
ual
from
payment
from
20
years
to
15
years
is
to
shorten
that
period
or
few
any
future
changes.
It
doesn't
really
affect
the
payment
schedule
that
we
have
in
place
now.
A
Who
could
I
ask
who
the
chair,
if
you
can
put
slide
17
back
up.
A
There
it
is
so
just
so.
The
board
understands
the
board's
primary
overriding
obligation,
as
fiduciaries
of
this
plan
is
the
blue
circle
on
benefit
security,
contribution,
stability
and
predictability.
Is
a
nice
technique?
It's
nice
to
have
it's
nice
not
to
have
an
extreme
where
you
put
your
plan
sponsored
into
bankruptcy.
So,
let's
put
the
extremes
aside:
generational
Equity
is
also
very
nice.
A
We've
clearly
flown
through
generational
Equity,
with
tier
one,
as
we've
never
collected
enough
from
the
generation
from
the
city
during
the
lifetime
careers
of
tier
one,
to
pay
for
the
benefits
that
the
city
promised
them
benefit
security.
Is
this
board's
primary
job
if
we
can
achieve
some
predictability
and
contributions
and
if
we
can
achieve
generation
and
Equity?
That's
icing
on
the
cake.
In
my
opinion,
those
are
not
funding
objectives
of
the
board,
either
under
law
or
in
reality,
under
their
trust
obligations.
A
So
I
just
want
to
make
that
point
clear,
and
it
seems
to
me
that
what
we,
what
would
benefit
this
board
mostly,
is
for
Chiron
to
come
back
with
methods
and
techniques
that
would
improve
for
the
first
time
in
several
years,
actually
improve
the
funded
status
of
our
members
benefits,
as
opposed
to
continue
to
move
them
downfield
20
years.
Hence,
and
so
that's
that's.
A
What
I
would
encourage
the
bill
and
team
to
come
back
to
the
board
if
you
have
actual
recommendations
to
improve
the
funded
status
of
the
plan,
sixty
percent
constantly
in
chronically
is
not
an
acceptable
funding
level
and
I
think
we're
starting
to
see
some
of
the
impacts
of
that
in
what
Jay
told
us
earlier
today
about
cash
flow
issues.
So
just
adding
that
to
the
mix
of
this
conversation
thanks
very
much
Mr
chairman
so.
I
I
think
the
what's
driving
the
cash
flow
issues
is
a
combination
of
higher
retirements
and
actually
the
better
investment
performance
from
2021
reduced
contributions,
and
so
that
results
in
Greater
negative
cash
flow.
A
I
I
B
I
am
I
wonder
if
one
of
the
changes
that
we
might
explore
there's
a
tension
between
stability
and
predictability,
which
is
very
much
desired
by
the
planned,
sponsor
and
and
taking
sufficient
risk
to
increase
the
funded
level
of
the
plan.
B
We've
actually
improved
the
funded
level
last
year
when
we
increased
our
exposure
to
risk
assets,
so
I'm
wondering
if
we
move
to
a
seven-year
asset,
smoothing
as
opposed
to
five
year
that
might
give
the
board
and
the
plan
the
confidence
to
take
continue
to
take
sufficient
level
of
risk
to
improve
the
funded
status,
while
also
maintaining
a
degree
of
stability
and
predictability
for
the
planned
sponsor.
That
might
be
acceptable
because
I
think
in
the
past,
I
think
the
plan,
the
board
and
the
staff
have
responded
to
comments
from
the
planned
sponsor
seeking
seeking
stability.
B
I
Well
so
now
you're
talking
about
a
Plex
analysis
where
we're
looking
at
if
we
went
to
seven
year,
smoothing
and
increase
the
risk
of
our
portfolio,
how
would
that
look.
B
B
I
So
that's
exactly
the
kind
of
feedback
we'd
want
to
hear
from
the
board.
I
was
not
thinking
that
we
would
go
to
seven
year
smoothing,
but
that
is
certainly
still
within
the
The
Sweet
Spot
and
it
does
provide
more
contribution,
stability
for
volatile
investment
returns,
and
so
we
can.
We
can
provide
that
analysis.
There's
also
downsides
to
it,
because
you
react
more
slowly
to
to
actual
changes
that
are
long-term
in
nature
and
not
just
year-to-ear
volatility.
Okay,.
D
I
I
Okay,
so
this
is
where
I
I
would
arguing
to
If
you're,
looking
at
the
funded
status,
to
focus
on
the
market
value,
because
I
really
don't
like
the
idea
of
changing
your
asset,
smoothing
in
order
to
change
your
funded
steps,
because
it
doesn't
really
change
anything
real.
That's
underlying
the
the
plan,
the
asset
smoothing,
whether
it's
five
or
seven
years,
should
really
be
based
on.
What's
the
impact
that
has
on
stabilizing
contributions
versus
reacting
to
long-term
trends
in
where
the
assets
are
going.
A
B
I
also
was
that
was
music
admire
I'd
much
rather
be
focused
on
the
investment
side
of
things.
A
Then,
on
trying
to
manage
the
city's
contribution.
C
If
they
can
backstop
us,
we
can
take
a
lot
of
risk
if
they
can't
backstop
us.
We
have
to
be
careful
about
the
amount
of
risk
we
take
because
in
any
given
year
in
any
given
quarter
on
any
given
day,
we
can
experience
volatility
that
presents
significant
risk
to
the
plan.
If
we
increase
the
the
the
our
budget
for
growth
assets
or
risk
assets
right
so
yeah
I
think
one
is
more
of
a
an
accounting
exercise.
B
C
B
C
Okay,
but
there's
two
different
things
there
so-
and
this
is
something
Harvey
said
earlier-
that
I
wanted
to
comment
on,
but
I
think
it
became
incidental
through
the
balance
of
Bill's.
You
know
answer,
but
you've
come
back
to
it
just
because
the
financial
CR,
the
great
financial
crisis,
was
13
years
ago.
I
mean
the
power
of
compounding.
We
are
feeling
the
pain
of
some,
quite
frankly,
disastrous
decisions
to
be
in
a
risk-off
environment
and
panicked
after
the
great
financial
crisis
that
took
place
for
a
long
period
of
time.
C
So
to
that
degree,
I
understand
where
trustee
Harvest
is
coming
from,
we
are
where
we
are
councilman.
I
would
say.
The
long
poll
in
the
tent
are
the
decisions
that
were
made
by
prior
trustees
and
cios
for
at
least
the
first
five
years
after
the
great
financial
crisis,
and
to
compound
that
Steve
made
a
great
Point
staying
in
non-risk
or
fixed
income
assets
when
the,
inter,
when
the
FED
decided
this
was
the
time
to
try
to
promote
risk
assets
like
we've,
never
seen
in
the
history
of
the
country.
C
You
know
we
we
chose
to
be
in
fixed
income
and
so
that
that
that
is
why
we
are
in
the
problem.
We
are
today
long
poem,
the
tent
I'm
done
with
with
my
soapbox
this
question
of
risk.
Still
matters,
though,
because
we
have
this
is
why
we
hired
Varys
before
I.
Don't
think
anyone
was
on
the
board
other
than
me
when
we
hired
varus,
we
need
to
understand.
We
should
always
approach
this
from.
What's
our
risk
budget,
is
it
11
volatility?
Is
it
12?
Is
it
13
once
that's
fixed?
C
We
hired
the
best
CIO
possible
to
within
that
risk
budget
outperform
the
benchmarks,
which
is
precisely
what
we've
done.
We
don't
know
what
risk
we
can
endure,
because
until
you
know
we
get
all
the
scenario
planning
from
varus
and
Makita
and
all
of
the
sorts
of
things
that
can
go
wrong
in
any
interstitial
period.
I,
don't
care
if
it's
one
year,
five
years
or
ten
years,
the
more
that
the
city
which
they've
never
told
us
in
all
of
the
joint
sessions
I've
been
in
you
guys,
go
take
X
risk
because
we
can
go.
C
Do
pension
obligation,
Asian
bonds.
We
can
go
do
this,
we
can
help
you
guys
out.
We
can
backstop
that
we
want
you
to
take
the
risk,
so
we
can
bridge
the
gap
on
our
unfunded
status.
That
conversation
has
never
really
taken
place
in
a
meaningful
way.
So
we,
as
an
investment
committee,
have
settled
on
12,
based
on
input
from
Chiron
and
Varys
and
Makita
because
again
benefit
security
is
important
to
us,
but
we
also
have
to
make
sure
that
there's
some
predictability
and
stability
in
the
plan
as
well.
C
B
Just
just
to
be
clear
not
advocating
that
we
increase
our
our
level
of
risk
from
the
current
level,
but
it
sounds
like
you
know
we
might
want
to
consider.
B
Bill
is
asking
for
for
feedback
on
what
possible
changes
we
could
consider,
and
that
might
be
one.
Let.
A
I
Me
also
no,
we
we
talk
about
this
when
we
do
the
valuation,
but
your
60
funded
today
is
not
the
same
as
your
sixty
percent
funded
ten
years
ago,
because
those
measures
are
on
completely
different
assumptions
and
part
of
what
we've
done
is
not
just
reduce
the
discount
rate,
as
interest
rates
have
come
down,
but
we've
really
strengthened
a
lot
of
other
assumptions,
including
mortality
and
and
other
things
that
have
increased
the
cost.
And
so,
if
you
look
at
the
the
history
of
the
impact
of
our
assumption
changes,
it's
always
been
ratcheting.
I
It
up
now,
you're,
not
the
only
public
system.
That's
done
that,
but
you've
done
it
much
more
than
I'd
say
the
average,
both
in
terms
of
reducing
the
discount
rate,
but
also
there
were
a
lot
of
other
assumptions
that
kind
of
flew
under
the
radar
from
prior
to
2009
that
we
have
strengthened
significantly
and
have
had
a
material
impact.
So
your
60
funded
today
is
is
not
the
same
as
it
was
back.
Then
you've
made
some
significant
improvements
in
the
security
of
the
benefits.
B
So
discount
rate
above
eight
percent
at
that
time,
so
maybe
to
move
the
conversation
along
I,
don't
know
in
response
to
council
leaderman's
request
any
other
recommendations
you
might
make.
That
would
improve
the
the
stability
and
the
status
of
the
plan,
but
we
we
need
to
see
those
recommendations
from
Chiron
for
our
consideration.
Perhaps
at
the
next
meeting.
I
Okay,
so
we
can
come
with
some
specifically
to
look
at
ways
of
accelerating
the
process
of
getting
the
plan
funded,
and
so
you
kind
of
the
impact
of
those
on
on
contributions
and
City
and
for
members
I.
D
Would
also
throw
out
there
I,
like
the
idea
of
the
15
okay
seems
like
the
right
move,
and
it's
not
painful,
it
might
be
interesting.
I
mean
we
might
not
choose
to
do
it,
but
to
see
what
that
10
is
or
a
variation
between
10
and
15.
You
know
just
might
be
interesting
to
see
that.
H
H
H
You
mentioned
five
seven
years,
and
then
you
mentioned
that
is
in
the
sort
of
like
the
goose
spot
foreign.
How
did
you
know
how
many
of
our
peer
systems
in
California
use
a
seven
year,
smoothing
versus
five?
Generally
speaking
like?
Are
we
talking
about
half
of
them,
25
of
them
I.
I
Off
the
top
of
my
head,
I'd
say
it's
between
a
quarter
and
a
third
but
I
think
we
have
the
data,
so
I
could.
H
Yeah
so
so
I
was
going
to
say
what
I
don't
know
if
the
boy
is
interested,
if
they're
not
interested,
you
don't
have
to
do
it,
but
I
think
it
might
be
helpful,
maybe
helpful
to
understand
in
some
of
those
recommendations.
You
know
how
do
we,
what
our
peer,
besides
Across,
the
Nation,
more
our
peers
in
California,
where
they
are,
you
know
so
that
we
can
compare
ourselves
and
the
second
one
is
something
that
I
say
all
the
time.
H
You
know
I'm
not
sure
exactly
what
is
going
to
be
the
end
result
and
what
position
the
board
is
going
to
make.
But
I
can't
emphasize
enough
that
when
Cairo
Chiron
presents
the
potential
implications
on
future
contributions
and
funding,
please
please
remember
is
based
on
a
very
basic
concept
that
going
forward
all
the
assumptions
are
going
to
be
met.
We
know
for
a
fact
that
is
not
the
case.
H
So
when
you
make
a
decision-
and
let
me
just
say,
either
shortening
or
extending
the
amputation
period,
it
could
have
a
substantial
impact
if
the
future
returns
are
very
different
than
what
was
expected
right
and
just
for
for
a
sake
of
discussion.
They
just
talked
about
the
first
two
decades
of
the
2000.
H
H
Neither
does
Bill
or
Prabhu
anyone
else,
but
I
just
want
you
to
keep
that
in
mind,
because
whenever
we
had
that
discussion,
we
assume
these
assumptions
are
made
going
forward
and
the
reality
is
that
if
they're,
not
whatever
decisions,
you're
making,
you
know
if
you
extend
them
with
the
action
period
and
excuse
me
if
you
extend
the
smoothing
and
then
you
have
seven
wonderful
years.
That
would
be
great,
but
then
you'll
be
accounting
for
the
gains
at
a
lot
lower,
slower
Pace
than
otherwise.
H
On
the
contrary,
if
there
are
really
big
losses,
then
you
know
you're
actually,
accounting,
then
at
a
slower
page,
which
keeps
you
actually
of
funding
the
higher
but
I.
Think
as
Bill
alluded,
you
don't
want
to
get
too
far
away
from
the
reality
and
extending
the
smoothing
can
have
that
impact.
Although
I
would
argue
that
five
to
seven
years
is
not
much
of
a
difference
so
anyway,
this
those
were
my
points.
H
I
wanted
to
make
and
I
can
leave
it
up
to
the
board
to
decide
whether
it's
kind
of
nice
to
know
where
our
peers
stand
on
some
of
those
issues,
so
that
we
can
compare
ourselves,
although
I
would
argue
that
Korea
San
Jose
and
very
different
than
all
the
other
employers
and
cities
and
counties
across
the
the
the
the
state
and
lastly,
I'm
going
to
close
by
saying
this
is
an
issue
that
I
did
with
my
peers
when
I
meet
them
at
my
other
administrators
and
CEOs
across
the
state.
H
Usually
we
have
a
difference
of
opinion
or
many
issues,
because
I
have
made
a
career,
and
even
the
last
years
in
San,
Jose
has
been
on
plans
that
have
a
for
the
lack
of
a
better
word,
a
challenging
from
the
status
I.
Think
as
Council
Layman
alluded.
Police
on
fire
is
a
better
shape
than
the
Federated,
but
on
an
actual
basis,
police
and
fire.
Let's
call
it
in
the
mid
to
high
70s
I'm
Federated.
You
know
in
the
high
50s
to
low
60s
versus
my
peers
across
the
state.
H
C
B
Thank
you,
I'm
driving,
to
conclude,
so
are
there
any
other
than
comments
or
directives
for
from
trustees
for
our
actuary
and
are
there
any
any
other
public
comments?
B
Bill,
do
you
have
what
you
think
you
need
in
order
to
come
back
with
some
recommendations
or
options
for
us
to
consider
which
are
limited
to
one
or
two
levers,
as
opposed
to
four
or
five
leaders.
I
Yes,
I
think
so.
I
I
think
I
would
recommend
that
we
focus
on
the
tier
one
pension,
since
that's
the
giant
piece
I
believe
the
the
opeb
in
tier
two
alone,
so
that
we
can
just
focus
in
on
that
and
we'll
we'll
come
back
with
a
couple
options
and
the
impacts,
and
we
can
show
you
the
the
differences
in
projections
and
and
some
volatility
around
those
projections.
Okay,.
B
I
think
that's
wise
again,
any
any
other
trusty
comments.
B
Okay,
so
we're
going
to
no
action
at
this
point,
moving
forward
to
the
next
agenda
item.
F
Is
ab361
so,
with
your
background
materials,
the
city
council
has
renewed
its
resolution
on
social
distancing.
So
with
that,
if
this
board
fine
makes
the
two
following
factual
findings,
which
are
one
that
the
governor's
Proclamation
due
to
for
the
state
of
emergency,
continues
to
be
in
place
due
to
covid-19
and
two
that
this
San
Jose
City
Council,
continues
to
recommend
social
distancing
and
City
facilities,
since
Boyd
may
continue
to
meet
virtually
for
the
next
30
days
under
ab361.
Thank
you.
B
B
A
second
from
trustee
Linder
any
discussion
from
trustees.
Any
public
comment
hearing
none.
We
will
have
a
roll
called
vote.
Vice
chair,
Jennings,
aye,
trustee
Chandra,
aye
trustee
Kelleher,
aye
trustee
Orr.
A
B
Trustee
Linder
aye
and
I
vote
I,
so
it
passes
unanimously.
We
move
on
to
agenda
item
six
committee
reports,
investment
committee,
chair,
Chandra
yeah.
Your
last
meeting
was
simply
a
special
meeting
for
ab361.
C
Correct-
and
we
will
be
doing
that
at
the
conclusion
of
this
meeting
as
well
and
then
we
will
be
meeting
this
coming
week,
I
believe
on
Tuesday,
but
no
no
immediate,
update,
I
think
the
CIO
gave
us
a
a
good
update
earlier
today
and
just
to
make
sure
that
we
receive
and
file
the
most
recent
last
three
minutes
of
the
most
recent
last
three
meetings.
B
Okay,
both
also
special
meetings,
the
audit
committee
trustee
Kelleher.
A
B
Afternoon,
perfect
and
joint
Personnel
committee
last
meeting
was
also
a
special
meeting,
I
assume
trustee
or
there's
nothing
special
to
report
right.
A
B
I
believe
we
have
another
meeting
scheduled,
it
says
TBD,
but
we
actually
have
one
date
scheduled
I
forget
exactly
what
it
is.
I
believe
it's
in
September
item
seven.
There
is
the
cortex
report
for
your
review,
as
well
as
a
special
call
out
for
the
ncpers
accredited
fiduciary
program.
If
people
are
interested
in
Nashville
Tennessee,
are
there
any
proposed
agenda
items.