►
Description
City of San José, California
Federated City Employees' Retirement Plan Board of October 21, 2021
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=899150&GUID=7BA9A611-ECE6-4798-ADF3-91785EC7E9B6
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F
F
I
I
I
He
was
his
words
were
respected,
but
he,
it
was
also
noted
that
there
was
many
other
factors
going
on
at
the
time
and
that
this
year
was
not
going
to
necessarily
be
a
non-inflationary
year
that
is
coming
to
fruition
right
now
and
because
we
didn't
follow
that
sort
of
practices
that
this
person
offered.
He
was
a
part
of
you
know
the
issues
of
shipping
right
now.
You
know
there
were
very
high
increases
in
in
police
pay.
I
That
was
a
part
of
that
whole
issue
of
why
there
wasn't
inflationary
limits
this
year,
we're
paying
for
that
now,
and
I
wanted
to
note
that-
and
I
wanted
to
thank
you-
know
the
report
from
one
of
a
really
respected
person
that
comes
to
these
retirement
boards,
often
and
and
gave
his
report
just
a
thank
you
to
him.
He
had
he
was
on
the
right
track
and
I
agreed
with
him,
and
I
felt
it
was
the
right
way
to
work
in
the
right
timing
and
how
to
work.
I
F
All
right
well,
thank
you,
mr
beekman.
I
think
you
will
be
interested
to
know
that
we
are
just
about
to
discuss
inflation
again
with
our
actuarial
assumptions.
That's
coming
up
later
today
in
the
agenda,
so
to
revisit
that
very
subject
now
before
we
are
there
any
other
hands
up
that
I'm
not
seeing
and
assuming
none
before
we
go
into
item
three
a.
I
would
like
to
call
for
a
five
minute
break
at
this
point.
J
D
F
D
H
D
Oh
okay,
yeah!
Well,
we
can
probably
discuss
it
sometime
later,
but
I
just
I
think,
just
as
a
policy,
my
own
personal
feelings.
I
I
just
don't
think
it's
a
good
idea
for
them
for
the
retirement
board
to
be
suing
the
person
that
feeds
and
funds
the
retirement,
in
other
words,
when
you
say
the
city
of
san
jose
you're,
actually
suing
the
taxpayers
because
they
obviously
fund
the
retirement
system.
So
that's
why
I
wanted
to
know
what
that
subject
was.
D
D
F
F
A
A
A
F
C
Thank
you,
mr
chairman.
Good
morning
trustees.
We
have
only
one
agenda
item
this
morning
and
that
is
the
presentation
of
the
annual
fee
report,
and
this
is
a
report
that
we
actually
present
to
both
boards
for
the
prior
calendar
year
and
after
it's
presented
to
the
boards.
It's
actually
presented
to
the
city
council
and
it's
one
of
the
most
comprehensive
fee
reports
that's
put
out
by
any
public
plan
out
there.
E
K
K
K
So,
going
on
to
the
presentation
on
the
first
page
is
just
a
high
level
overview.
You
know
kind
of
top
level
numbers
off
e
ratio
ticked
up
slightly
to
1.12
in
2020,
and
that
was
primarily
driven
by
increase
in
incentives.
You
can
see
that
kind
of
brownish
bar
you
know,
and
then
we
also
have
performance
on
the
bottom
to
give
kind
of
context
to
that
on.
The
right
is
a
peer
comparison.
K
So,
just
just
the
tables
from
the
prior
slide
as
just
adding
a
dollar
amount
to
it.
Our
fees
paid
have
gone
up
slightly
from
23
million
to
27
million,
again
driven
mainly
by
incentive
fees.
Just
a
note,
you
know.
Obviously
the
asset
base
has
increased,
and
so
the
percentage
increase
is
actually
you
know
it's
actually
lower
than
what
those
numbers
would
so
the
dollar
numbers
would
imply.
K
So
you
know
going
back
to
the
historical
context.
You
know
we
kind
of
chart
here
our
historical
management
fees
and
we
we
want
to
focus
on
management
fees,
because
we
want
to
focus
on
things
that
we
can
control,
meaning.
You
know
primarily
it's
management
fees,
and
you
know
we
control
that
by
either.
You
know
the
main
levers
are
active
passive
just
that
the
decision
to
be
active
passive
in
the
in
relative
in
the
specific
asset
asset
classes
and
negotiations,
where
you
know
we
have
some
negotiating
leverage.
K
And,
what's
that,
driven
by
it's
primarily
our
kind
of
weighting
to
more
passive
in
the
front
in
the
in
the
plan?
You
know
you
can
see
that
the
on
the
on
the
triangle
left,
the
major
contribution
to
management
fees
is
from
active,
the
passive
portion
being
very
small,
and
so
as
we're
bringing
down
that
allocation
to
active.
K
You
know
we've
gone
down
over
the
years
anywhere
from
you
know
in
the
10
range
to
what
currently
we're
at
in
the
three
percent
range,
and
you
can
see
on
the
chart
on
the
left
that
that
kind
of
brown
bar
at
the
top
has
come
down
materially
from
about
42
basis,
points
in
2016
all
the
way
down
to
nine
basis
points
in
2020
and
on
the
right.
You
can
see
the
specific
allocation
drop
on
average
weighted
basis
from
2016
to
2020..
K
So
I
mean
that,
that's
that's
all
we
have
for
our
prepared
remarks.
I
mean
you
know.
Basically
the
story
is
not
much
has
changed
and
from
from
last
year-
and
hopefully
you
know
we'll
continue
to
see
kind
of
fees-
kind
of
moderate
all
the
changes
moderate
from
from
from
you
know
kind
of
going
forward.
B
C
B
I
think
it's
really
helpful.
So
first
I
should
say
thank
you
for
that
comprehensive
overview,
and
this,
I
think,
tells
a
nice
story
and-
and
it
doesn't
have
to
be-
you
know
down
to
the
granular,
which
is
great.
It
gives
us
a
sense
of
where
we
land.
So
I
do.
I
would
like
to
continue
to
see
this.
I
just
was
curious,
why?
B
I
guess
the
data
points
it's
our
peers
in
the
same
asset
range
and
then
california
public
plans,
because
I
just
noticed
you've
got
pers
and
stirs
and
it
would
make
sense
that
they're
at
the
bottom
of
the
fee
range
expense
ratios.
They've
got
a
lot
of
stuff,
that's
in-house
as
well,
so
I'm
just
wondering.
Does
this
chart
if
I
looked
at,
I
don't
know
any
of
those
years.
That
is,
that
all
california
public
plans
as
part
of
your
universe,.
K
F
F
F
K
Yeah,
that's
just
a
background.
I
mean
there's
a
lot
of
tables
and
a
lot
of
numbers,
and
you
know
if
people
are
interested.
We
can
dig
into
that
level
detail.
But
you
know
in
the
interest
of
time
and
ultimately,
what's
really
important.
I
think
it's
kind
of
the
the
bottom
line
and
again
kind
of
focusing
on
things
we
can
control.
F
K
F
F
K
Yeah,
let
me
I
need
to
double
check
on
that,
but
I
don't
know
if
jake
can
comment,
but
I
think
when
we
say
I
guess
active
and
passive
here,
maybe
it's
it's
kind
of
flip
yeah.
It
could
be
flipped
and
but
it
also
could
be.
I
think
you
know
in
terms
of
when
we,
the
the
the
active
strategy,
is
not
like
overly
active.
It's
it's.
K
L
F
K
So
I
I
guess
you
know
with
private
assets
or
just
just
private
markets
in
general
of
fees
are
usually
paid
uncommitted
and
with
our
kind
of
private
or
real,
like
private
real
estate.
We've
been
kind
of
deploying
or
committing
quite
a
bit
in
the
last
year
and
a
half,
and
so
it
does
look
elevated
because
things
are
on
a
you
know:
fees
are
paid
on
a
committed
basis,
and
so,
as
we
have
more
dollars
deployed
as
more
capital
is
called
that
fee
ratio
should
come
down.
F
B
Have
one
suggestion
just
for
the
the
second
page,
the
asset
allocation
page
after
the
executive
summary,
if
you
could
just
it,
threw
me
off,
and
it's
a
small
thing
if
you
could
just
next
time
put
a
table
on
the
right.
I
know
you
mean
that
the
blue
is
supposed
to
be
growth
and
then
other
and
low
beta,
but
it
just
makes
it
a
little
cleaner
and
clearer.
F
D
Thank
you,
mr
chair.
Thank
you,
mr
ong,
for
your
presentation.
Just
a
quick
question
with
regard
to
your
peer
comparison
chart
is
there?
Is
there
a
way
to
segregate
those
you
know
with
other?
So
we
can
look
at
apples
and
apples,
even
though
there's
no
such
thing
as
apples
and
apples
with
this,
but
with
regard
to
some
other
independent
retirement
funds
like
city
of
san
francisco,
fresno
san
diego,
you
know
those
kind
of
things
so
that
way
we
can
kind
of
have
a
comparison
to
those
independent
funds.
K
So
so
two
points
on
there
right,
brad,
the
first
one
is
yes,
we
can
to
the
extent
that
they
report
and
they
report
data
to
the
public
plans
database.
So
that's
where
we
pull
it
from
and
the
second
is
in
terms
of
trying
to
get
granular
in
comparison.
You
know
it's
it's.
You
know
when
you
say
apples
to
apples.
You
know
it's
tough
from
two
perspectives.
Right,
one
is:
are
the
asset
allocations
the
same
and
two
is
you
know
kind
of
that
comment
before
was
this?
K
This
comparison
is
really
pulled
from
kaffir
data
and
and
cafe,
data
doesn't
give
you
the
whole
look
into
the
actual
fees
paid
and
that's
kind
of
why
we
do
this
comprehensive
fees
report.
So
we
can
actually
see
the
actual
underlying
fees
that
are
paid
and
yeah.
We
can
absolutely
you
know,
look
at
any
comparison,
but
the
question
is
you
know:
is
that
good?
You
know.
Is
that
going
to
yield
false
positives
in
terms
of
know,
analysis.
F
F
E
E
I
also
want
to
share
with
you
that,
as
you
know,
we
have
two
vacancies
right
now
at
the
board.
One
is
the
employee
seat,
the
other
one
is
retiree,
so
the
employee
seat-
actually
ballots,
went
out
this
week,
and
so
I
believe
many
of
the
members,
including
members
from
our
office,
have
received
the
ballot
they
are
due
back
at
the
city,
clerk's
office
november,
8th,
I
think,
because
they
are
due
back
november
8th.
E
E
It's
been,
it's
been
challenging
to
get
information,
an
update
from
the
city
clerk.
I
do
know
that
they
kick
off
the
the
city
retiree
application
process.
Once
again,
but
to
be
honest
with
you
again,
it's
been
challenging
getting
information,
so
I
don't
have
any
specifics
to
give
you
in
terms
of
timeline.
C
G
That
would
be
wonderful
if
you
could.
I
also
reached
out
to
the
city
clerk
and
although
she
was
very
responsive
on
a
particular
issue
that
I
had
she
did
not
get
back
to
me
on
this.
I've
also
reached
out
to
the
office
of
employee
relations,
cheryl
parkman,
who
was
going
to
try
to
inquire,
but
she
doesn't
have
a
lot
to
say
about
that,
and
I
I
apologize.
G
I'm
not
sure
does
the
city
clerk
report,
the
city
council,
or
to
the
city
manager,
council,
member
davis
directly
to
council,
oh,
and
that
would
be
really
cool
if
we
could
get
some
help
on
this,
especially
as
we're
dealing
with
the
pension
obligation
bond-
and
you
know
just
the
committees
we're
getting
a
little
thin
here.
If
we
lose
one
more
person,
we're
going
to
be
in
dire
shape.
M
E
Thank
you,
steve
jennings,
and
thank
you
miss
davis.
If
there's
anything
you
can
do,
let
us
know,
and
if
you
need
to
reach
out
to
us
with
any
information,
let
us
know
we
can
provide
it
to
you
no
problem.
Thank
you.
So
then,
in
closing
there's
a
couple
of
more
issues
in
terms
of
staff.
We
initiated
the
search
for
our
new
information
technology
person
so
that
just
speaking
of
that
process
this
week,
that's
for
the
network
tunisian
position.
E
We
also
want
to
let
you
know
that
starting
november
1st
we're
going
to
initiate
a
very
when
I
say
soft,
I
mean
extremely
soft
opening,
with
a
limited
number,
mostly
from
the
benefits
staff
benefit.
Staff
is
trying
to
implement
an
application
that
provides,
allows
for
appointments,
and
so
the
appointments
is
twofold.
E
So
again
as
we
roll
out
this
process-
and
we
know
more
about
it,
we
will
keep
informed
but
again,
a
very,
very
soft
opening,
with
a
limited
number
of
benefit
staff,
the
first
couple
of
weeks
in
november
and
as
this
is
developed
further,
we
will
keep
you
posted.
I
also
wanted
to
let
you
know
that
last
week,
myself
and
barbara
heyman,
our
deputy
director
sandra
castellano,
our
benefits
manager
and
bestialano.
One
of
our
benefit
analysts
for
healthcare,
participated
in
a
presentation
for
the
federated
retiree
association.
E
Lastly,
just
want
to
let
you
know
we
will
be
closed
for
veterans,
day
november
11th
and
the
retirement
connection
newsletter.
The
quarterly
newsletter
that
is
issued
should
be
coming
out
in
the
next
couple
of
weeks.
So
that
concludes
my
statements,
mr
chair.
I'm
happy
to
answer
or
address
any
questions.
F
H
M
Thank
you.
I
just
have
one
update
and
one
question
because
I
know
I
missed
it
a
while
back
the
update
is
that
the
council
voted
nine
to
two
to
move
forward
with
pension
obligation,
bonds,
issuance
and
court
validation
proceedings,
and
the
two
no
votes
were
myself
and
council
member
mayhem
so
that
moved
forward
and
the
timeline
for
court
validation
is
unknown.
M
I
think
the
least
amount
of
time
it
could
take
is
six
months.
The
most
amount
of
time
it
could
take
is
much
much
longer
if
the
if
the
action
by
the
court
is
contested
by
any
party
which
I
anticipated
to
be
so
that's
my
update
for
that
and-
and
I
just
wanted
to
ask
why
I
have
the
time
and
I'm
thinking
about
it.
M
I
don't
know
if
anyone
else
has
had
had
this
issue,
but
the
top
header
doesn't
move
when
you're
trying
to
scroll,
and
so
there's
like
a
tiny
bit
of
space
when
you're
trying
to
find
agendas.
It's
it's
laid
out
nicely,
but
the
the
top
header
is
is
fixed
instead
of
scrolling
up
and
getting
rid
of
it.
When
you,
you
know
so
you're,
seeing
it
all
the
time-
and
I
just
want
to
point
that
out
as
a
bit
of
feedback.
I
don't
know
if
anybody
else
has
had
this
issue.
M
I
have
it
on
both
my
mobile
phone
and
my
tablet,
and
I
really
have
to
be
on
a
full-size
laptop
to
be
able
to
use
the
the
new
website
in
any
in
any
productive
way.
I
find
it
very
difficult
because
I
am
always
toggling
between
different
devices,
so
I
just
want
to
give
that
that
bit
of
feedback
and
and
find
out
if
anybody
else
has
had
that
had
that
issue
or
if
that's
something,
that's
in
the
works
and
being
changed.
E
F
M
F
M
Respect
to
yes-
and
I
I
appreciate
you
bringing
that
up
because
I
I
did
receive
that,
but
as
it
was
outside
of
the
regular
meeting
schedule,
I
wasn't
sure
if
the
board
had
had
voted
to
approve
that
that
recommendation
to
move
forward
with
an
mou.
If,
if
I
wasn't
sure
if
that
was
coming
directly
from
from
the
ceo
or
directly
from
the
board,.
E
So
miss
davis-
I
was
taking
direction
from
the
boards
he
hasn't
been
voted
on,
but
they
did
everything
to
me
to
reach
out
to
the
city
manager
and
the
city
general
that
they
were
amenable
to
signing
a
an
agreement
with
the
city.
Obviously
they
will
have
to
work
out
the
details,
but
yes,
so
that
would
just
hold
him
in
direction.
There
was
no
vote
discussion
for
voting
no
action
at
the
at
the
board
level,
but
direction
provided
to
me.
F
M
F
F
F
J
So
today
we're
reviewing
the
economic
assumptions
that
are
used
in
the
pension
valuation
at
next
month's
board.
Meeting
we'll
have
both
the
the
draft
pension
valuation
results
and
reviewing
the
opeb
assumptions
for
the
retiring
medical
plan
and
we'll
need
decisions
on
those
opeb
assumptions
at
that
time.
J
In
november
and
december
they
will
come
back
and
present
their
audit
of
our
evaluation
results
and
at
that
same
time,
then,
we'll
give
you
our
final
valuation
report,
assuming
there's
no
material
issues
in
the
audit
and
also
draft
oped
valuation
results,
and
then
the
january
board
meeting
we
give
again
siegel
will
present
their
audit
findings
on
our
opeb
valuation
and
assuming
there's
no
material
changes.
We'll
present
the
the
final
valuation
report.
For
that.
J
J
So
the
the
market
value
reflects
fully
the
exceptional
investment
returns
and
we
went
from
being
50
funded
to
64
funded
on
that
basis,
but
for
determining
contributions,
we
smooth
those
investment
returns
over
five
years
and
so
on,
an
actuarial
value.
That
unfunded
measure
goes
down
more
slowly
as
it
phases
in
over
the
next
five
years
and
that's
the
basis
for
the
contributions
so
you'll
see
that
we
don't
have
an
immediate
drop
in
the
contribution
rate,
but
it
gradually
drops
over
the
next
several
years.
J
So
here's
our
projection
of
contributions
on
the
left
side,
we're
showing
it
as
a
percentage
of
payroll
and
on
the
right
side
as
a
dollar
amount.
Again,
the
blue
line
is
the
projection
from
the
last
valuation.
So
you
can
see
the
significant
differences
you
can
see
in
particular
on
the
percent
of
payroll,
the
effect
as
the
asset
smoothing
gets
worked
in
and
we
fully
recognize
the
market
value
of
assets
again,
assuming
all
our
assumptions
are
going
forward.
J
J
So
we
review
these
economic
assumptions
every
year,
and
so,
if
we
don't
make
a
change
this
year
and
you're
kind
of
contemplating
a
change,
we
can
certainly
decide
to
make
a
change.
Next
year
we
are
going
to
come
back
every
single
year,
the
on
the
demographic
side,
so
mortality
retirement
rates,
disability
rates,
all
of
those
sorts
of
things
and
merit
salary
increases.
J
J
J
L
L
The
expected
return
is
equal
to
price
inflation,
plus
a
real
return
component,
real
return
on
the
assets
and
then
the
ultimate
health
care
trend
also
is
built
upon
price
inflation
with
real
per
capita
gdp
growth.
On
top
of
that
for
the
ultimate
health
care
trend,
the
the
current
price
inflation
assumption
is
2.25
and
we're
recommending
no
change
and
we'll
we'll
get
to
why
on
the
next
slide.
L
The
tier
two
colas
are
equal
to
inflation,
but
up
to
a
maximum
that
varies
based
on
service.
So
between
one
point:
two:
five
percent
and
two
percent
and
given
given
the
volatility
of
inflation,
the
the
the
actual
experience
will
be
somewhere
below
the
cap
right
because
in
years
where
inflation
is
below
the
cap,
that
applies
and
and
here's
where
it's
above
the
cap,
you
know
the
cap
applies,
but
nevertheless
we're
recommending
keeping
the
assumption
at
the
maximum,
just
as
a
conservative
assumption.
L
L
So
on
on
the
left
side,
we
survey
surveys
of
cpi
assumptions,
so
the
far
left
column
is
a
survey
of
economic
forecasters
put
out
put
out
by
the
fed
and
we're
seeing
a
range
there.
So
we're
we're
showing
the
20
the
minimum
to
the
maximum,
which
is
not
too
far
outside
the
25th
to
75th,
but
we're
showing
there
a
range
of
2
to
3
percent,
and
you
can
see
the
the
yellow
diamonds
are
the
san
jose
federated,
the
current
assumption,
2.25
percent
and
then
the
gray
dot.
L
L
So
this
is
a
survey
of
capital
market
assumptions
put
out
by
horizon
and
I
believe
it's
around
40
investment
consultants
39.
I
think,
but
this
this
survey,
the
the
range
is
about
the
same,
but
the
the
average
and
the
50th
percentile
is
a
bit
lower,
so
at
2.2
percent,
so
actually
a
little
bit
under
the
current
assumption
for
the
federated
plan.
L
The
third
column
is
a
survey
of
a
wide
survey
of
public
planning,
so
public
plan
database
and
there
you
can
see
the
the
range
goes
up
a
little
higher,
but
the
the
federated
and
makita
assumptions
are
closer
to
the
bottom
there
and
then,
finally,
on
on
the
far
right,
we
show
sort
of
sort
of
a
subset
of
public
plans.
These
are
these:
are
public
sector
plans
in
california
and
that
that's
about
40
plans,
and
here
here
the
the
minimum
is
2.25
percent
there.
L
L
So
so
the
market's
implying
a
certain
level
of
inflation
expectation
here
and
you
can
see
that
even
with
you
know
all
that
all
the
news
about
inflation
being
high
for
certain
certain
things
in
certain
periods,
the
the
expectation
of
the
market
has
not
reflected
that.
So
much
so
there's
been
an
increase.
But
if
you
look,
you
know
through
2020
and
into
the
latest
results.
L
You
know
it's
up
around
two
and
a
half
on
on
the
five-year
basis
and-
and
you
know
a
bit
below
that
on
the
20-year
basis,
which
is
the
long-term
that
we
look
to
so
given
these
items
we're
not
we're
not
recommending
a
change
and
as
bill
mentioned
earlier,
you
know
we
revisit
this
every
year.
So
if,
if
things
start
to
look
like
there
is
something
some
a
change
in
this
trend
or
continued
upward
trend
and
of
course
we
would
revisit
that
next
year,.
L
So,
moving
on
to
wage
inflation,
you
can
think
of
wage
inflation
as
the
annual
across
the
board
increase
in
wages.
So,
as
bill
mentioned,
we
do
a
separate
study
of
of
merit.
You
know
promote
promotion,
sort
of
in
increases
every
four
or
five
years,
so
we're
not
doing
that
this
year,
but
we
do
look
at
the
wage
inflation
every
year
and
typically
so
you
start
out
with
your
price
inflation,
but
there's
also
an
additional
component
there,
reflecting
a
history
of
increased
purchasing
power.
L
At
that
you
know
as
a
minimum,
and
then
we
also
use
that
as
the
rate
of
the
payroll
growth,
so
as
bill
mentioned,
that
we're
expecting
payroll
to
grow
and
the
current
assumption
is
three
percent,
and
so
what
so?
What
we
want
that
to
reflect
is
is
current
bargaining
agreements
and
then
an
ultimate
rate.
So
the
ultimate
rate
is
three
percent
here,
coincidentally,
that
that
lines
up
with
the
near-term
current
bargaining
agreement.
So
we
end
up
with
a
three
percent
assumption
for
all.
G
L
L
L
G
G
L
L
So
here
we
we
look
to
the
the
bargaining
agreements
which
again
are
in
line
with
three
percent.
We
also
look
to
the
the
california
survey,
which
shows
a
range
of
2.75
to
3.5
percent,
and
there
are,
as
I
said
earlier,
about
40
plans
there,
so
so
20
of
them
have
the
3.25
percent
so
about
half
and
then
we're
we're
not
proposing
a
change
here
either,
because
the
current
bargaining
agreements
are
reflected
that
the
three
percent
rate
you
know
after
that
initial
period.
N
Absolutely
the
next
assumption
we're
going
to
look
at
is
the
amortization
payment
increase
rate.
This
is
the
rate
that
your
amount,
your
unfunded,
reliability,
amortization
payments
increase
over
time.
So
the
current
assumption
is
that
they're
going
to
increase
a
2.75
percent,
it's
slightly
more
conservative
than
the
payroll
growth,
which
is
three
percent.
So
basically,
what
this
implies
is
that
the
amortization
payments
are
expected
to
decline
slightly
over
time
as
a
percentage
of
payroll.
N
N
G
N
N
N
J
So
the
lower
the
number,
the
more
conservative
you're
being
the
more
when
you
spread
those
payments,
the
higher
the
payments
in
the
short
term
and
the
lower
the
payments
in
the
long
term,
when
you
have
a
higher
number,
you
have
lower
payments
now,
but
higher
payments
later
wow.
So
you
know,
if
you
compared
to
you
know
a
typical
mortgage.
You'd
have
level
dollar
payments,
you
pay
the
same
amount
over
the
full
30-year
mortgage.
J
The
potential
issue
with
that
is
that
if
payroll
doesn't
grow,
as
jackie
pointed
out,
those
payments
could
become
an
increasing
percentage
of
payroll,
which
is
not
what
we
want,
and
so
were
at
2.75
were
a
little
bit
more
conservative
than
the
normal
public
pension
plan,
but
not
as
conservative
as
police
and
fire,
and
not
as
conservative
as
you
would
be.
If
you
had
a
level
dollar
payment.
J
N
N
N
N
So
we
look
at
the
historical
performance
you
can
see.
The
blue
bars
are
your
actual
returns
on
a
market
valley
basis
and
the
gold
bars
are
your
returns
on
an
actuarial
bet,
actuarial
value
basis
because
you're
on
actual
value
basis,
you're
smoothing
your
gains
and
losses.
You'll
see
that
there's
a
little
less
volatility
in
that
return,
but
you'll
see
it's
more
volatility
in
your
market
value,
which
was
the
actual
return
for
the
year.
N
N
N
N
J
As
those
interest
rates
have
declined,
plans
have
had
to
do
two
things
you
could.
When
the
interest
rate
declines,
you
can
either
expand
the
expected
risk
premium,
increasing
the
risk
in
your
portfolio
or
you
can
reduce
your
discount
rate
and
the
federated
plan.
Like
most
other
public
plans
around
the
country,
has
done
a
combination
of
the
two,
and
so
we
have
reduced
the
discount
rate,
but
not
as
much
as
interest
rates
went
down,
and
so
our
expected
risk
premium
has
gone
up
with
the
pandemic.
J
J
On
a
10-year
and
20-year
time
horizon,
we
compare
those
to
the
survey
of
investment
consultants
performed
by
horizon
that
steven
mentioned
earlier.
There
are
39
consultants
in
their
five
to
10-year
category
and
24
consultants
providing
20-year
assumptions,
and
these
all
of
these
assumptions
are
lower
than
they
were
last
year.
G
J
J
So
the
assumptions
are
are
similar,
we're
seeing
around
10
years
it's
around
six
percent
20
years,
6.8
to
a
little
over
seven
in
their
range.
Now.
I
would
note
that,
just
based
on
the
the
raw
information
makita,
provided,
we
didn't
match
exactly
their
their
own
calculation
of
their
median
returns,
and
I
tried
to
inquire
to
figure
out
the
difference.
J
J
It's
really
both
interest
rates
and
valuations
or
price
earnings
ratios
that
we
see
that
primarily
drive
the
changes
and
we've
typically
set
the
assumption
somewhere
between
the
10-year
and
20-year,
and
so
these
gray
bars
represent
makita's.
The
bottom
is
makita's
10-year
assumption,
and
the
top
is
makita's
20-year
assumption
for
that
year,
and
so
you
can
see
how
those
have
changed
compared
to
where
we
set
the
assumption.
J
I
would
say
that
the
federated
fund
is
has
a
slightly
more
aggressive
asset
allocation
than
the
police
and
fire
fund,
and
so
these
assumptions
for
police
and
fire
were
about
30
basis
points
lower,
and
so
we
did
suggest
that
police
and
fire
considered
a
reduction.
They
have
not
made
a
decision
yet,
but
they
are
considering
it.
J
F
C
G
B
F
About
the
discount
right,
there
correct,
correct,
okay,
I
think
my
own
view
is
I
I
think
all
the
assumptions
are
reasonable.
Perhaps
the
one
I
would
tinker
with
is
the
price
inflation
we
have
seen
higher
inflation
numbers.
The
big
issue
of
the
day
is
whether
or
not
the
higher
inflation
is
transitory
or
not.
I
think
we
could
be
safe,
increasing
the
price
inflation
to
two
and
a
half
percent,
which
would
put
us
in
the
middle
of
the
pack.
F
F
We
are
well
within
well
below
the
50th
percentile
in
terms
of
the
20-year
projections
by
makita
and
other
the
39
other
polled
market
analysts.
So
I
believe
it
continues
to
be
a
very
reasonable
number.
Our
history
has
been
to
lower
the
discount
rate
once
every
two
years
by
an
eighth
of
a
point.
We
load
it
last
year
by
an
eighth
of
a
point,
and
I
think
it
would
be
very
consistent
of
us
to
maintain
the
current
discount
rate.
F
D
F
F
Recommendation
is
no
change,
but
it
would
not
be
unreasonable
if
the
board
were
to
choose
to
reduce
by
either
25
or
50
basis
points.
So
that
is
the
recommendation.
So
a
motion
to
accept
all
recommendations
would
be
for
all
of
these
numbers
that
are
highlighted
here:
two
and
a
quarter
percent
of
price
inflation,
three
percent
wage
inflation,
2.75
for
the
amortization
increase
and
6.625
for
the
discount
rate.
C
F
F
C
F
J
So
we
just
want
to
update
you.
The
the
board's
current
assumption
is
to
use
the
latest
available
mortality
projection
scale
and
yesterday
a
new
scale
was
released,
and
so
we
will
be
incorporating
that
in
the
valuation
as
under
the
current
assumptions
to
use
the
latest
available,
and
so
there
will
be
minor
if
it
look,
we
haven't
done
a
full
analysis
since
it
was
just
released
yesterday.
But
it
looks
like
a
very
minor
change
to
the
mortality.
E
Yeah,
mr
chair,
on
behalf
of
the
staff
we
actually
put
together
the
schedule
of
your
board
and
standing
committee
meetings.
For
example,
your
board
meeting
is
scheduled
to
be
the
third
thursday
or
every
month,
except
for
the
month
of
july.
So
that's
what
you'll
see
on
the
schedule,
so
I
would
recommend
at
this
time.
E
Of
course,
if
there
are
any
questions,
we
will
be
happy
to
address
them,
but
I
would
recommend
to
approve
it
and
if,
if
we
need
to
make
any
changes
to
the
schedule
later
on,
we
can
always
come
back
to
us.
A
particular
meeting
has
been
scheduled
and
change
it
early
on
so
that
the
we
can
advise
the
public,
but
for
now
I
think
that
we're
going
to
go
ahead
and
recommend
that
you
board
approve
the
the
board
meetings
for
2022
and
standing
committee
meetings
as
scheduled.
F
C
H
Yes,
hi,
my
name
is
meitek
chen,
and
what
I'm
here
to
present
today
is
on
the
mechanics
of
av
361.
As
you're
aware,
the
governor
had
initially
passed
an
executive
order
that
allowed
public
boards
to
meet
virtually
during
the
pandemic,
but
that
executive
order
has
since
expired
at
the
end
of
september
of
the
month
of
september,
and
the
legislature
has
signed,
has
passed
and
the
governor
signed
into
law
assembly
bill
361
as
an
urgency
law
take
which
went
into
effect
on
october
of
this
month.
H
The
board
must
make
factual
findings
pursuant
to
the
terms
of
the
law
that
allow
them
to
continue
to
meet
virtually
if
they
do
make
these
factual
findings
that
the
law
provides
for
abbreviated,
teleconversing
procedures
that
supersede
the
brown
axe
original
teleconferencing
rules.
In
order
to
elect
ab361's
abbreviated,
teleconferencing
procedures,
the
board
needs
to
adopt
the
following
factual
findings
to
legitimate
their
need
to
meet
virtually
one
that
there
is
a
proclaimed
state
of
emergency
in
the
state
of
california
to
either
there's
two
options
here.
H
There's
and
there
are
alternatives
either
that
the
state
and
local
officials
have
recommended
or
imposed
social
distancing
measures
or
the
legislative
body
decides
by
majority
vote
that
they
need
to
meet
that
meeting
in
person
would
pose
an
imminent
risk
to
health
and
safety
of
the
attendees.
So
the
last
two
I
just
mentioned
social
distancing
and
the
eminent
risk
to
self
health
and
safety
of
its
members
are
two
alternative
grounds
that
must
be
considered
in
addition
to
the
social
distancing,
I'm
sorry,
the
state
of
emergency,
factual
findings
with
the
agenda.
H
I
provided
you
the
information
regarding
the
current
state
of
affairs
in
santa
clara
and
santa
clara
county
and
the
city
of
san
jose,
and
with
that
I
will
leave
it
open
to
questions.
But
in
my
view,
the
city
of
san
jose
has
passed
a
resolution
on
september
28th
regarding
the
continued
requirement
of
social
assistancing
within
city
buildings,
and
so
that
is
one
of
the
factual
findings
that
the
board
would
legitimate
the
board
to
continue
to
meet
virtually
and
their
state
of
emergency.
H
A
I
I
There
is
reports
that,
in
both
russia
and
in
the
uk,
kovid
is
starting
is
on
the
rise
again.
This
invariably
tends
to
lead
to
you
know
cases
will
be
rising
in
this
country.
You
know
in
a
short
amount
of
time
and
and
the
importance
of
a
mass
use.
I
just
wanted
to
bring
that
up
that
it's
an
important
concept
that
I
hope
we
can
continue
now
and
through
the
holiday
time,
and
it's
just
always
on
our
minds
and
we're
talking
about
it,
and
I
think
that's
about
all.
H
You're
welcome
and
one
other
thing
I
would
I
neglected
to
mention
to
the
board-
is
that
this
factual
finding
must
be
made
every
30
days
and
so
from
today.
If
we
make
these
factual
findings,
it
will
carry
us
to
the
next
30-day
meeting,
at
which
time
we
would
have
to
re-evaluate
the
circumstances
to
see
if
it
continues
to
justify
the
use
of
abbreviated
teleconferencing
and
you
do
it
every
30
days.
H
E
H
E
Okay,
so
so,
even
though
the
next
the
next
meeting
is
within
the
30
days,
we
still
have
to
do
it
the
next
meeting,
so
we
can
have
the
following
meeting
correct
now,
when
the
board
decides
to
stop
the
virtual,
presumably,
then,
presumably
we
could
have.
We
may
not
have
today
at
the
last
meeting,
because
the
last
meeting
that
will
be
virtual
after
that
it
will
be
in
person,
so
we
wouldn't
have
to
do
it
anymore
after
that.
E
H
E
E
H
Correct
right,
so
then
they
would
have
to
so
in
that
circumstance,
where
there's
a
gap
where
they
do
meet
in
person
for
a
limited
period
of
time
that
first
meeting
where
they
meet
in
in
person
at
the
onset
of
whatever
emergency
is
occurring,
then
they
can
make
those
factual
findings
that
carry
them
over.
Pursuant
to
the
traditional
brown
act
rule
so
like
the
teleconferencing
and
posting.
H
Virtually
but
it
would
be
subject
to
the
original
brown
act
rules.
That
being
said,
I
will
also
note
that
this
bill
is
not
just
related
to
kovid.
I
just
want
to
make
sure
that's
clear:
it's
open
to
all
emergencies,
earthquakes,
fires
and
whatnot.
So
that's
an
additional
clarification
point.
I
think
trustee
orr
had
her
hand
up.
F
H
E
To
that
point
I
just
want
to
let
you
know
there
are
three
and
investment
committee
chair
is
not
present
today,
so
unless
we
have
either
trustee
or
or
keller
her
willing
to
take
the
baton
from
there.
I
was
just
wondering
if
you
can
sort
of
lead
the
committee
through
the
through
the
steps
of
the
agenda,
because
I
don't
think
that
they
didn't
receive
the
information
that
trustee
chandler
received
on
the
orders
of
the
day.