►
Description
City of San José, California
Police & Fire Department Retirement Plan Board of December 1, 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://sjrs.legistar.com/View.ashx?M=A&ID=1056763&GUID=2F40CB27-7E5F-46BB-A466-4C3CE58F2D51
A
A
A
A
A
A
B
B
B
B
B
And
call
this
mean
to
order,
let's
see
if
everybody's
here
Andrea
here
here
David
are
you
here
here
Sunita?
Are
you
here
I'm.
C
E
D
Yes,
Franco
here.
B
All
right
hang
on
a
sec
guys.
Let
me
go
speed.
Let's
see
here
orders
of
the
day.
Let's
see
a
gentle
reminder
to
stick
around
after
the
meeting
General
reminder.
We
have
great
Zoom
advocates
for
the
best
zoom
etiquette
board,
I'm
on
I'm
on
Plenty,
go
ahead
and
interrupt
the
speaker
or
anybody
if
it's
topical
the
question,
but
in
general
for
important
matters
we'll
go
around
Rob
and
you
guys
will
know
you
guys.
The
Advocate
is
someone
intuitive.
B
Let
me
make
sure
all
right.
Remember,
remember
the
EB
thing
I
feel
like
I'm,
watching
murder
mystery.
So
in
the
last
meeting
we
were
a
little
concerned
about
the
reappointment
of
our
some
members.
Yeah
I.
Think
four
I
just
got
an
email
from
Roberto's
yesterday,
the
day
before
that
city
council
has
done
its
Duty.
B
So
all
four
I
have
are
officially
back
on
the
board,
so
not
to
exercise
the
little
known
law
that
if
we
don't
fail
one
of
your
slots,
you
stick
on
and
I
like
to.
Personally
thank
all
of
you
for
reading
up
20.
As
you
know,
from
my
unusual
stand,
digging
extra
years,
chairman,
2023
I,
think
will
be
the
year
that
we
finally
enact
something
that
our
board
started,
as
I've
pointed
out
many
times
in
February
of
2012
a
few
months
after
we
Independents
first
came
on
this
board.
B
So
thank
you
all
for
your
generous
contribution
to
the
stability
that
I
think
a
showing
of
our
knowledge
and
strength
to
the
city
council
will
allow
us
to
put
our
incentive
compensation
system
and
plan
in
place
and
that's
the
last
piece
of
the
jigsaw
puzzle
that
Vince
challenged
us
all
with
I'm
back
in
2012..
F
B
B
B
Wilson
hi
chairlands
I
vote
I
as
well,
so
that
makes
it
unanimous
if
I
could
chat
in
here
by
lunch.
Everybody
owes
me
a
beer
two
over
to
you,
Peru
for
Investments.
H
We
are
going
to
talk
about
last
quarters
investment
performance
and
for
that
I
will
soon
be
turning
this
word
to
Casey
of
Newberg
government
and
later
on,
to
Laura
and
Jared,
but
before
I
do
that,
as
always,
I
have
performed
my
investment
numbers.
These
are,
of
course,
unaudited,
and
they
come
from
Makita
as
of
November
29th.
It's
two
days
ago,
2.09
fiscal,
year-to-date,
Healthcare
trust
was
down
1.41
percent.
H
This,
of
course,
does
not
include
yesterday's
monster
rally,
which
I
reckon
added
about
two
percent
to
our
planned
returns
with
that
Mr
chairman.
Unless
there
are
any
questions
for
me,
I'm
going
to
invite
Casey
Boyer
from
Newburgh
apartment.
I
Okay,
hopefully
everyone
can
see
that
today,
I
will
be
going
through
the
Q2
report
for
your
program
I'm
very
happy
to
to
do
this
each
quarter,
so
we
can
kind
of
go
through
what
changes
are
happening
just
overall
in
the
market,
Q2
valuations,
private
Equity
evaluations
did
go
down
and
I
would
say.
I
I'll
I'll
give
a
little
bit
of
commentary
on
Q3
as
well,
since
we
are
getting
information
in
for
that
and
and
have
kind
of
an
early
read
on
what
Q3
will
look
like,
but
for
Q2,
specifically
the
the
valuations
and
and
program
level
performance
went
down
about
right
around
four
percent,
a
little
bit
under
four
percent.
So
you
will
see
that
reflected
here
in
the
materials
for
the
net.
I
Multiple
we
do
have
a
1.8
times
return
more
specifically
that's
1.82
times
in
q1
that
was
1.89
times,
so
you
can
kind
of
see
how
that
went
down
a
little
bit
within
a
net
irr
of
20
29.4
for
the
new
burger
program.
Specifically,
you'll
also
see
here
on
page
two,
the
Legacy
Investments
and
how
those
two
are
combined
for
your
total
private
Equity
exposure
on
the
far
right
during
Q2,
q1
and
Q2
were
actually
quite
good
quarters
for
returns
of
capital.
I
I
I
We
we
expected
that
things.
Things
are
still
a
little
bit
undetermined
on
on
how
the
overall
Market
will
will
kind
of
turn
out
over
the
next
q1
Q4
q1.
I
So
in
the
buyout
Arena
valuations
were
down
in
Q3
about
two
percent.
A
little
over
two
percent
in
and
in
Venture
returns
were
down
about
eight
percent.
Again,
you
would
expect
that
type
of
difference
between
buyout
and
and
Venture
as
Venture
companies
are
a
little
bit
smaller
and
mostly
not
profitable
companies.
I
Those
two
metrics
account
for
about
70
percent
of
our
platform,
so
70
percent
have
reported
to
us.
Those
numbers
could
change
as
we
receive
more
information
in,
but
we
found
that
around
70
percent
of
evaluations.
I
It
won't
change
a
lot.
So
we
kind
of
expect
those
numbers
for
Q3.
I
I
would
say
the
majority
of
valuations
that
we've
received
specifically
from
buyout.
There
was
a
range
of
returns.
They
were
either
down
five
percent
or
kind
of
up
five
percent.
So
that's
a
lot
of
returns
were
in
in
that
range
of
of
information
for
Q3.
I
So
if
we
turn
to
page
three
page
three,
four,
five,
six
and
seven
we're
starting
to
get
even
more
investment,
so
the
pages
are
becoming
longer
are
all
Benchmark
information
for
your
underlying
Investments,
which
includes
both
the
Legacy
and
the
new
burger
you'll,
see
how
the
the
performance
for
each
investment
is
on
the
far
right
and
then
you'll
see
also
the
quartiling
information.
So
you
can
see
not
only
if
your
first
second
third
quartile
for
a
specific
investment,
but
where
it
falls
in
the
range
of
being
a
first
quartile
or
second
quartile
fund.
I
Some
of
these
metrics
are
its
second
time.
It's
a
it's
a
second
quartile
fund,
but
it's
actually
very
close
to
that
first
quartile.
So
it
gives
you
a
little
bit
more
information.
I
So
Pages,
three
four
are
the
Legacy
information.
A
lot
of
those
fund.
Investments
are
older,
so
some
of
the
metrics
don't
move
a
lot.
Moving
on
to
Pages
five,
six
and
seven
you'll
see
neuberger
Investments
again,
there's
a
lot
of
more
recent
vintages.
So
you
do
see
a
little
bit
more
volatility.
I
Just
in
terms
of
they're
still
calling
capital
A
lot
of
them
have
a
lot
more
Investments
to
make
and
are
still
kind
of
putting
those
into
companies
as
they
as
they
find
them
over
time
we
don't
quartile
2021
in
2022,
that's
a
little
bit
too
early
you'll
see
a
lot
of
those
Investments
haven't
called
hardly
any
Capital,
so
it
it
does
not
make
a
lot
of
sense
to
show
that
information.
Just
yet
these
up
and
down
arrows
show
what
the
difference
was
between
last
quarter.
I
Page
eight
gives
a
little
bit
more
information
around
the
difference
between
committed
Capital,
meaning
the
Investments
we've
committed
to
and
the
difference
of
which
of
those
Investments
have
actually
called
the
capital
and
put
the
capital
to
work.
So
you'll
notice,
specifically
the
differences
between
co-investments
and
primaries,
co-investments
being
called
directly
and
going
into
companies
immediately
primaries.
Investing
Capital
over
two
to
three
years.
I
You'll
see
the
this
information
by
geography
as
well
as
vintage
year.
So
as
you'll
see
kind
of
here
invested
capital
of
both
the
Newberg
and
Legacy
program
gives
you
a
good
idea
and
should
provide
some
comfort
on
the
level
of
diversification
that
you
that
your
program
has
by
vintage
year,
so
starting
in
2005
and
now
a
consistent
investment
period,
starting
in
you
know,
2017
in
in
each
year.
Since
then,.
I
I
These
returns
continue
to
develop
primaries,
obviously
are
performing
very
well
we're
still
actively
making
primary
Investments.
So
this
is
also
including
all
of
these
actually
are,
including
Investments,
that
you
know
we
just
made
a
month
ago.
We
just
made
a
year
ago.
I
So
all
of
these
performance,
metrics
I,
would
say
for
secondaries
and
co-investments,
really
great
DPI
performance,
where
we're
seeing
on
the
secondaries,
actually
more
than
have
returned
cost
co-investments
right
at
kind
of
that
50
Mark,
where
we've
returned
50
of
the
invested
capital
and
all
of
these
still
developing
in
all
of
them
really
generating
that
return,
and
then
at
the
bottom
you'll
see
how
the
entire
program
is:
benchmarking,
the
net
performance
for
the
program
at
1.82
times
that
tbpi
net
irr
at
29
that
does
Benchmark
at
a
second
quartile
and
so
you'll,
see
more
specifically,
how
that
looks
so
net
irr
just
missing
that
first
quartile
by
you
know,
0.5
and
then
the
net
tvpi
is
basically
in
the
middle
there.
I
Between
the
first
and
second
quartile
so
still
positive,
we
expect
a
lot
of
the
Investments
that
we've
made
in
the
last
couple
years
to
continue
to
develop
and
and
hopefully
get
that
up
into
the
first
quartile,
we're
still
very
happy
with
these
returns,
but
obviously
would
would
love
to
be
first,
so
I
I
think
I'll
just
open
it
up
for
questions.
If
anyone
has
any
any
specifics.
C
I
Yeah,
so
we
have
seen
an
uptick
in
secondary
transactions,
there's
definitely
more
of
the
traditional
secondaries,
which
is
what
you're
talking
about,
where
people
kind
of
need
to
rebalance
their
portfolio
or
they
need
more
liquidity.
We've
seen
in
an
uptick
of
those
the
last
few
years.
Second,
the
secondary
Market
has
been
very
much
led
by
GP
LED
secondaries,
where
the
GPS
are
actually
kind
of
taking
some
Assets
in
their
portfolio
and
and
doing
a
secondary
on
one
two
or
two
assets.
I
I
I
From
our
perspective,
yes,
we
have
a
full
secondary
team
on
our
side
and
the
way
we've
set
up
your
portfolio
is
the
secondary
and
co-investment
allocation
is
really
one
bucket
that
we
can
use
to
invest
where
the
best
investments
are
in
that
market.
We
don't
have
a
set
allocation
of.
We
have
to
invest
this
much
into
co-investments
and
this
much
into
secondaries.
We
take
advantage
of
opportunistic
Investments
as
they
come
through.
So
from
our
side.
I
J
I
It's
it's
a
lot
of
all
of
that,
so
I
would
say
our
secondary
team,
they're,
bread
and
butter
is
really
more
of
a
mid-market
secondary
team,
so
they're
kind
of
not
going
after
all
of
that
really
large
cap
Market,
which
actually,
in
the
last
few
years,
a
lot
of
the
market,
has
been
more
GP,
LED,
so
they're,
very
active
on
on
the
GP
LED
and
within
the
secondary
Market.
Our
whole
platform
really
plays
to
great
secondary
deal
flow
were
big
primary
fund
investors
we
co-invest
with
these
GPS.
I
So
we
have
a
lot
of
touch
points
across
many
aspects.
J
Okay,
great
and
I
I
do
I
do
like
the
the
arrows
that
was,
that
was
very
helpful
to
see
there
was
so
on.
This
slide
in
particular.
Is
this:
since
there
are
no
arrows
here
on
the
irr
and
tvpi
yeah?
That
means
it.
It
was
the
same.
The
last
quarter,
so.
I
No
actually
I,
we
should
add
arrows
here.
The
irr
last
quarter
was
first
quartile,
so
it
did
change
the
irr,
as
you
can
see
slipped
just
below
into
the
second
quartile
range.
J
Okay,
and
that
was
probably
as
a
result
of
what-
and
then
you
mentioned,
with
private
equity
and
evaluations,
trending
downwards,
that
was
yeah.
I
So
for
yeah,
so
for
Q2,
you
know,
as
I
mentioned,
the
overall
performance
of
your
portfolio
did
go
down
slightly.
I
You
know
we
are
very
active
in
making
new
Investments,
so
those
new
Investments,
going
in
at
at
one
times
also
does
affect
that.
Irr
and
you
know,
I
I
will
say
benchmarking.
I
Definitely
is
somewhat
of
a
black
box
where
we
don't
know
exactly
the
what
is
in
The,
Benchmark
and
and
kind
of
how
those
Investments
are
being
affected
by
the
same
Market
Dynamic.
So
you
know
when
we
Benchmark
we,
we
Benchmark
against
the
best
peer
we
can
find
and
and
don't
have
a
lot
of
specifics
into
what
types
of
Investments
and
how
that
differs
from
your
specific
portfolio
of
Investments.
A
K
One
thing
with
the
Benchmark
as
Casey
mentioned
is:
our
program
is
now
in
year
six.
So
this
is
a
2017
vintage
that
we're
comparing
against
and
typically
funded
funds,
only
have
an
investment
period
around
three
years,
maybe
four
years
so
as
Casey
pointed
out,
there's
more
Investments
that
were
being
that
we
are
making
at
cost.
So
that
tends
to
drag
down
both
the
irr
and
net
multiple.
So
we
are
looking
at
other
ways
of
breaking
this
up,
so
maybe
making
it
into
two
different
crunches.
B
So
I
launched
this
meeting
my
thanking
Trustees
for
sticking
around
because
we
had
a
heavy
lift
to
do
next
year
following
up
on
a
10-year
plan.
So
the
essence
of
the
plan
that
Vince
put
in
place-
and
the
joint
Personnel
committee
is
now
working
so
hard
on.
B
Is
this
disconnect
between
the
actors
saying
you
have
to
be
more
conservative
than
your
peers
and
we
all
know
why
I'm
not
going
to
go
into
that
right,
but
at
the
same
time
the
market
doesn't
recognize
that
and
they
say
well,
you
guys
are
only
six
and
five
eights
and
Calpers
is
seven
and
you
suck
so
Vince's
thesis
was
look.
We
do
have
to
be
less
risky.
That's
big
public
markets,
that's
beta!
That's
where
the
bulk
of
our
return
comes
from
and
we
have
to
have
a
lower
beta
right
than
our
peer
Pension
funds.
B
But,
as
Vince
pointed
out,
we
can
generate
Alpha
to
cover
that
Gap.
Where
Google
would
tell
you
right
now
and
and
I've
seen
numbers
that
we've
been
consistently
generated,
generating
profitable
Alpha,
since
he
came
enough
to
cover
the
Gap,
and
so
the
thesis
is
and
we're
going
to
be
able
to
do
this-
that
we
can
maintain
a
core
portfolio
lowering
risk
in
our
peers,
a
portfolio
that's
turning
six
and
five-eighths.
B
We
can
do
things
like
this
in
order
to
return
seven,
so
one
of
those
rare
times
in
life
guys
when
Vince's
thesis
was
it
appears
to
be
true.
We
can
have
our
cake
and
eat
it
too.
We
can
have
our
cake,
we
can
have
it
inherently
lower
risk
plan.
We
can
eat
it
too.
We
can
have
a
discount
rate
that
matches
our
peers
and
we
can
deliver
to
that
return.
B
Now
that
goes
the
Final
Cut.
There
was
a
question
buried
in
here
somewhere.
That
goes
to
what
Howard
just
said.
Look
I'm
in
the
industry.
I
know
what
Howard
just
asked
and
I
know
Casey
just
answered,
but
to
the
rest
of
you,
man,
that's
inside
baseball.
Well,
that's
where
Alpha
gets
generated.
So
the
question:
do
you?
Praboo
is
of
that
3
30
40
basis
points
of
consistently
profitable
Alpha,
and
you
can
see
it
here.
Look
at
this
irr.
A
E
B
H
Yeah,
no
thank
you
drew
that's
a
great
question.
So,
by
definition,
the
way
we've
calculated
Alpha
so
far
has
excluded
private
markets
right,
and
so
we
include
private
market
returns
in
the
aggregate
return,
but
we
neutralize
it
when
it
comes
to
Alpha,
simply
because
of
what
Casey
just
said
and
what
Dinesh
added
it's.
The
benchmarking
of
private
markets
is
very
difficult,
but
it
can
be
done
so
I'm
going
to
give
you
some
numbers
here.
So
just
everyone
knows
just
looking
at
the
public
markets
and
Laura
will
share
this
later.
H
You
look
at,
but
it's
September
30th
right.
Looking
at
the
report
that
Makita
presented,
our
Alpha
just
from
public
markets
has
been
50
basis
points
over
the
last
three
years,
90
basis
points
over
the
last
year.
It's
been
110
basis
points
year
to
date
it's
been
40
basis,
points
and
quarter
to
date.
It's
funny
basis
points,
and
this
is
easily
observable
and
capturable
Alpha
that
we
have
in
the
public
markets.
H
So
this
is
as
a
one
point
in
time.
Of
course,
this
is
as
of
September
30th
2022.
These
numbers
will
move
around,
but
you
can
see
the
consistency
here
and
but
once
we
once,
we
start
taking
into
account
private
markets,
and
this
is
where
again,
you
know
we
will
talk
about
this
as
we
as
we
as
we
discuss
Drew
and
Vince's
plan
the
next
few
months.
H
You
will
see
you,
we
can
clearly
demonstrate
the
value
added
here
and
the
reason
why
you
know
we
have
done
well
relative
to
our
peers,
even
though
we
take
lower
risk
is
because
of
this
Alpha.
So
we
do
take
lower
risk
than
our
peers,
and
you
know,
and
Chiron
has
told
us
time
and
again
that
we
should
and
but
at
the
same
time,
you've
seen
our
performance
and
again
Laura.
We'll
talk
about
our
performance
relative
to
our
peers.
Later
you'll
see
that
we
have
consistently
top
quartile
and
the
reason
is
the
difference.
H
B
H
Not
necessarily
rule
I
mean
I,
think
it's
just
we've
deliberately
neutralized
it
only
because
of
the
difficulty
of
benchmarking
it,
but
when
we
have
an
incentive
program,
obviously
Dinesh
as
the
private
markets,
investment
officer
is
doing
a
terrific
job
and
we
need
to
be
able
to
assess
on
a
quantitative
basis
what
we've
done
on
the
private
markets
as
well.
So
we
do
have
to
talk
about
how
to
integrate
the
alpha
and
X
as
we've
done
from
private
markets
as
well,
and
if
anything,
if
you
just
show
that
we
produce
more
Alpha
foreign.
B
This
is
just
outstanding
I.
Don't
Howard
may
have
a
better
idea
than
I
do,
but
I
sort
of
track
these
numbers
in
the
background,
as
a
VC
dude,
you
did
this
you're
knocking
this
you're
not
going
to
cover
off
this
ball
on
the
ball
out
of
the
park
good
for
you,
she
needs
to
jump
in
never
jump
in
when
you
want
to.
C
I
guess
I
didn't
appreciate
that
we
didn't
include
the
private
market.
I'll
find
this,
so
thanks
Drew
for
pointing
that
out-
and
this
is
probably
more
of
a
conversation
for
the
investment
committee
but
I
guess
if
we
it's
it's
essentially,
if
we
think
about
it
as
the
opportunity
of
or
the
alternative
to
being
in
in
a
private
Market
portfolio
would
be,
we
already
have
a
proxy
right.
C
The
Russell
three
thousand
and
one
way
to
look
at
Alpha
is
essentially
against
that,
because
the
alternative
would
be
to
invest
in
in
a
Russell
3000
type
of
index.
Is
that
a
fair
statement
problem
s.
H
In
fact,
if
you
look
at
makita's
report,
you
will
see
that
we
have
a
private
markets
Benchmark,
but
we
also
have
an
acqui
plus
100
basis
points
right.
I
mean
people
feel
that
if
you
are
investing
in
private
markets,
you
should
be
able
to
do
better
than
public
markets.
So
they
add,
you
know
100
basis
points
or
so
to
those
public
proxies
to
make
sure
that
we
are
being
compensated
for
the
liquidity
that
we
have.
Okay,.
H
Okay,
thank
you
drew.
It
looks
like
I'm
buffering
here
a
bit
my
internet,
so
thank
you
Casey
for
the
excellent
presentation.
You
know
private
markets
will
continue
to
you
know.
Values
will
continue
to
come
down
over
the
next
few
quarters,
but
again
there's
tremendous
opportunities,
as
as
Sunita
pointed
out
and
and
we're
ready
for
those
opportunities
with
that
I'm
going
to
now
invite
Laura
and
Jared
to
talk
about
the
entire
private
Market
support
presented
by
Makita.
L
Good
morning,
everyone
I
hope
you
had
a
nice
Thanksgiving
break
and
happy
December
already
I,
don't
know
what
the
weather's
like
in
San
Jose,
but
it
really
cooled
off
down
here
and
I.
Have
my
space
heater
running
under
my
desk,
but
I
hope
you're
all
staying
warm
and
then
having
a
good
start
to
the
holiday
season.
L
I'll
start
off
with
makita's
private
markets
report,
which
includes
both
the
new
burger
bourbon
private
Equity,
as
well
as
the
other
private
markets,
asset
classes
and
I.
Think
Jared's
gonna
share
his
screen
in
a
moment
here.
I
can
start
off
on
page
two
when
we
get
that
up.
F
L
L
That's
I'll,
just
I'll,
just
start
off
as
Jerry
gets
that
up
and
and
page
two
is
where
we'll
start,
but
I'll
mention
that
all
private
markets,
asset
classes,
both
the
newberger,
Berman,
private,
Equity,
the
Legacy
private
equity
and
then
the
real
assets,
private
debt
and
real
estate
all
have
irrs
that
are
above
their
Public
Market
equivalent.
L
So
if
you
recall
the
way
we
calculate
a
public
market
equivalent
is
we
take
a
public
markets
index
and
we
use
cash
flows
on
the
actual
days
that
the
private
markets
program
pulled
them
and
distributed
them,
since
that
that's
how
the
private
markets,
funds
work
and
and
look
at
what
your
return
would
have
been
on
the
far
right.
If
you
had
invested
these
same
funds
in
the
public
markets,
and
so
you
can
see
that
private
markets
has
provided
a
better
irr
than
that
public
market
equivalent
internal
rate
of
return.
L
And
then,
if
you
look
at
the
bottom
and
the
total
on
the
far
right,
the
total
internal
rate
of
return
of
your
private
markets
program
since
its
Inception
back
in
2005,
has
been
10.7
so
over
10.
So
we
still.
This
now
includes
you
know.
Six
months
of
a
bear
market
and
some
valuation
write
downs,
but
you
still
see
some
big
benefits
relative
to
public
markets
for
the
private
markets
program,
Laura.
E
If
I
could
just
ask
you
a
quick
question
there,
so
so
the
new
burger
fund,
which
is
done
extremely
well
29,
but
the
pme
irr
is
2.2.
That's
because
the
public
markets
during
this
time
has
done
extremely
well
right.
L
So
so
the
public
market
return
would
have
been
2.2
because
you
do
have
the
money
that
was
called
and
the
money
that
was
distributed
would
not
have
done
as
well
in
the
public
markets.
During
that
time,.
L
L
The
first
section
that
we
have
in
here
in
terms
of
the
individual
asset
classes
is
private
debt,
so
we
you
can
see
here.
The
private
debt
stood
at
3.9
percent,
just
right
around
its
four
percent
Target.
As
you
know,
in
some
prior
years
private
debt
was
considered
differently
in
an
opportunistic
bucket.
L
This
program
has
been
the
weakest
of
the
of
the
private
markets,
programs
with
an
irr,
still
quite
positive
at
6.5
percent,
and
we
can
take
a
look
at
page
six
and
to
look
at
the
individual
funds
in
this
program,
and
you
can
see
here
that
especially
the
funds
that
have
been
invested
under
the
current
staff.
If
we
look
about
halfway
down
the
page
at
2017,
2018,
2019
and
scroll
your
eyes
over
to
the
far
right,
you
can
see
that
the
irrs
and
these
are
versus
peers
and
peer
universes
of
funds
here.
L
So
the
irrs
of
these
funds
have
been
quite
strong
relative
to
the
priors.
One
notable
exception
is
Eagle
Point,
which
is
towards
the
bottom.
This
is
still
a
quite
young
fund,
so
it
hasn't
been
a
full
Market
cycle.
However,
there
have
been
some
write
Downs,
given
the
fact
that
75
percent
of
Eagle
points
Investments
are
fixed
rate
loans
and
given
the
rising
interest
rate
environment
that
hasn't
been
positive
for
for
fixed
rate
debt.
At
this
point,
the
next
program
in
here
is
the
real
assets
program,
starting
on
page
nine.
L
So
this
is
a
very
young
program
right
now
it
has
a
allocation
of
about
1.8
percent
relative
to
a
four
percent
policy
Target.
But
if
you
take
a
look
at
the
green
line
on
this
on
this
chart
here,
your
staff
has
been
diligent
and
continuing
to
invest
over
time
to
build
this
program
up
with
Vintage
Air
diversification
in
mind.
It's
been
a
great
program,
especially
given
the
situation
with
Energy
prices
that
we've
had
recently.
You
can
see
the
irr
at
the
bottom
of
almost
15
percent
for
this
program.
L
If
we
skip
ahead
to
page
nine,
you
can
see
the
individual
okay
on
12.
Here
you
can
see
the
individual
Investments
and
this
as
I
mentioned
as
a
young
program,
you
have
a
lot
of
not
meaningful
in
the
that's
what
the
NM
is
on
the
far
right.
You
look
at
some
of
these
Investments
like
kimrage
energy.
L
Just
again,
given
you
know:
oil
prices
in
the
energy
environment
in
irr,
42.7
relative
to
13,
for
the
peer
group
and
so
a
strong
program,
thus
far
despite
its
relative
Youth,
and
there
was
one
new
investment
in
this
program
during
the
second
quarter
of
2022.
It
was
the
Aether
seed,
Partners
Fund,
the
next
program
real
estate.
If
we
take
a
look
at
page
14,
you
can
see
that
real
estate's
at
four
and
a
half
percent
relative
to
its
four
percent
policy.
L
Target
often
we
do
want
to
overshoot
just
a
little
bit
given
the
sort
of
the
type
of
program.
This
is
where
it
distributes
Capital
regularly.
You
can
see
also
a
very,
very
strong
irr
here
of
14.4
percent
on
the
bottom
on
page
15,
the
next
page,
you
can
see
that
there
were
two
new
Investments
during
the
quarter
that
we're
looking
at
both
North
American
Funds,
with
with
Investments
or
commitments
around
20
million
Kranium
and
AG
a
I
g
g
r
e.
L
If
we
look
at
getting
ahead
of
17,
you
can
take
a
look
at
the
individual
Investments
same
story.
Here,
relative
to
the
other
programs,
you
know
some
of
the
recent
funds
quite
strong
returns.
If
you
look
about
the
middle
of
the
way
down,
we
look
at
Gem
and
dra
Rock
Point,
both
dra
funds
here
dra,
is
a
fun
complex.
L
That
Makita
has
been
recommending
for
a
very
long
time
and
we're
glad
that
these
funds
are
in
the
the
program
here
now
one
notable
exception
again,
a
very
young
fund
is
episo5.
This
is
a
European
fund,
so
it
is
subject
to
the
impact
of
exchange
rates,
and
so
appiso
would
have
had
a
12
irr
since
Inception.
If
we
were
looking
at
it
in
Euros,
but
given
the
strength
of
the
US
dollar,
you
see
a
weaker
return
there.
It
does
still
provide
some
some.
L
L
So
the
current
allocation
is
under
one
percent
relative
to
a
four
percent
policy
Target,
but
you
can
see
here
with
the
green
line
and
stuff
and
and
your
your
board
in
terms
of
its
approvals,
has
been
diligent
in
allocating
Capital,
but
we
have
a
not
meaningful
irr
thus
far,
given
that
it's
such
a
new
program,
if
we
take
a
look
at
page
21,
the
next
slide,
you
can
see
that
there
were
two
new
Investments
of
five
million
dollars
each
in
this
quarter
that
we're
looking
at
and
then
on.
L
The
next
slide,
actually
two
slides
ahead,
we'll
look
at
23
and
you
can
see
the
individual
funds
here,
given
that
they're
all
investments
in
the
last
couple
of
years,
the
returns
aren't
yet
meaningful
and
the
rest
of
this
report
just
has
a
variety
of
slides
on
the
private
markets
environment,
but
in
the
interest
of
time,
I'm
happy
to
take
any
questions
on
private
markets.
Before
we,
we
move
over
to
the
full
fund
report.
C
Hey
Laura
every
presentation,
I
really
like
how
you
show
the
the
allocation
Target
versus
where
we
are
I
just
wanted
to
understand.
Given
that
the
real
estate
investment
is
higher
than
the
policy
Target,
why
did
we
still
make
two
new
investment
commitments?
This
quarter.
L
That's
a
great
question,
so
the
the
nature
of
the
private
markets
program
is
that
these
funds
are
constantly
giving
back
Capital
as
well,
and
every
individual
fund
has
different
rules
around
whether
or
not
they
can
recycle
Capital.
So,
as
an
example,
imagine
that
you
commit
10
million
dollars
to
a
fund,
it
usually
takes
them.
You
know
three
to
five
years
to
actually
call
all
of
that
Capital
as
they
make
investments
and
then,
as
they
sell
off
properties,
they're
they're
going
to
distribute
it
to
you
over
time.
L
You
know
how
much
Capital
each
underlying
fund
is
going
to
call
and
going
to
distribute,
and
so
it's
not
sort
of
a
perfect
formula
and
an
environment
that
we've
seen
recently.
You
might
see,
for
example,
a
real
estate
fund
that
was
going
to
sell
an
office
building,
maybe
decide
to
hold
on
to
that
office.
Building
a
bit
longer,
given
that
we're,
we
still
have
some
sort
of
pandemic
related.
L
So
typically,
you
know
having
a
slight
over
allocation
is
common,
because
we
might
have
had
some
assumptions
that
they
would
have
given
back
more,
but
we
do
think
it's
really
important
to
continue
to
commit
every
year,
even
if
you're
slightly
over
Target,
and
so
that
you
maintain
that
vintage
year
diversification-
and
you
know
Investments
made
in
2022-
might
turn
out
to
be
a
great
vintage
year-
might
not
turn
out
to
be
a
great
vintage
year.
L
C
L
So
the
the
target
ranges
are
around
the
asset
class
as
a
whole
for
private
markets.
I'd
have
to
go.
Look.
Take
a
look
at
the
public
markets
report
to
see
what
the
what
the
range
is.
L
But,
but
you
know,
the
the
amount
that's
invested
is
is
coming
from
that
approved
pacing
study
that
will
renew
you
know
in
the
new
year
to
look
at
whether
or
not
we
should
commit
more
or
less
and
then,
as
you
know,
when
we
do
the
broad
asset
allocation
study,
sometimes
we
change
targets
so,
for
example,
I
think
private
debt
used
to
have
a
higher
Target
than
it
does
now.
C
Okay,
I
mean
I,
guess
it
seems
you
even
if
you
stay
within
a
it
seems
a
little
illogical
to
say
we
will
invest
in
every
vintage
year
when
when
we
are
at
the
camp,
but
because
a.
M
L
Yeah,
if
your
entire
finders
private
markets,
that
be
something
we'd
want
to
be
extra
careful
about.
But
given
that
private
markets
are
a
portion
of
an
overall
fund
where
you
have
a
lot
of
liquidity
and
we
don't
think
it's
a
major
risk
to
have
slight
over-allocations
and
under
allocations
to
private
markets,
asset
classes.
As
you
get
up
to
those
those
targets
that
you're
targeting.
B
B
You
got
to
keep
going
with
every
vintage
year
because
there
really
is
no
way
to
tell
until,
as
I
said
before,
the
money's
in
the
bank
so
I
think
that's
the
right
strategy
Lauren
if
it
exceeds
the
policy,
Benchmark
I,
think
let's
just
shine
a
light
on
it
and
you
know,
make
sure
we're
willing
to
receive
that
limit.
If
it
should
ever
happen.
Thanks
Lawrence
floor
is
still
open.
H
J
H
You
Julie
thank
you,
thank
you,
Lord
I,
just
I
just
to
Drew's
point,
and
that
is
a
real
issue
for
a
lot
of
endowments,
especially
in
BC
space.
Just
given
how
well
the
asset
classes
performed
and
in
some
endowments
I've
noticed
that
they're
they're,
already
ABC
by
as
much
as
15
or
20
percent,
just
given
a
great
performance
but
but
to
sunita's
question
yeah.
We
do
look
at
the
broad
asset
classes
rather
than
you
know.
H
The
sun
basket
categories
for
the
10,
and
if
we
are
consistently
overweight,
an
asset
class
I
mean
there's
two
ways
of
looking
at
it.
One
is
to
is
to
say,
maybe
we
should
be
allocating
less
though
I
would
like
to
stick
to
Vintage
or
diversification,
and
the
other
is
to
Simply
say.
H
Maybe
we
should
actually
move
up
the
allocation
to
that
particular
asset
class
and
those
are
discussions
we
can
have
again
at
the
at
the
beginning
of
next
year
when
we
revisit
our
sa8
policy
with
that
Laura
I'll
turn
this
back
to
you
for
2D
and
2
2E.
All.
F
Thanks
Laura
good
morning,
everybody
yeah
so
we'll
cover
a
little
bit
of
a
macro
overview
as
of
9
30
before
we
get
into
the
pension
plan
itself.
So
just
to
start
off
here
on
page
five,
you
can
see
two
very
different
outcomes
here
between
last
year
and
this
year,
2021
was
great.
For
most
asset
classes
in
2022
has
been
the
opposite.
2022,
unfortunately
marks
the
worst
start
to
a
year
ever
for
the
bond
market,
given
the
rate
Rises
that
we've
seen.
F
So,
if
you
remember
at
the
beginning
of
the
year,
the
most
popular
view
was
that
inflation
was
transitory.
There
might
be
a
couple
Fed
rate
hikes
this
year
and
clearly
neither
of
those
were
accurate
assumptions.
F
So
we
basically
had
several
macro
factors
that
have
been
impacting
markets
this
year,
inflation,
most
importantly,
and
and
with
that
Rising
interest
rates,
but
also
you
know,
concerns
of
future
growth
of
raising
rates
too
much
the
war
in
Ukraine
China
lockdowns
from
covids,
so
there's
been
several
factors
happening
that
have
resulted
in
markets
performing
the
way
they
have.
F
If
I
jump
to
page
six
just
cover
a
couple
of
points
here
on
Regional
asset
classes,
so
in
the
in
the
U.S
space
for
the
quarter,
you'll
see
that
large
caps
underperformed
small
caps.
So
if
you
look
at
the
Russell
1000
following
4.6
versus
Russell,
2000
falling
2.2,
a
lot
of
that
from
the
larger
Tech
names
dragging
down
the
large
cap
space
on
page
seven
I
think
the
foreign
Equity
returns
here
have
a
couple
of
interesting
things
to
see.
F
You
see
China
here
at
the
bottom
year
to
date,
falling
more
than
30
percent,
with
multiple
issues
that
we've
just
discussed
before
happening
there
since
the
end
of
nine
of
September
30th.
So
the
past
couple
months,
China
is
up
about
eight
percent,
but
that
Trails
most
of
the
rest
of
the
world
as
well,
which
has
bounced
back
even
more
and
I.
Think
the
most
interesting
thing
on
this
page
is
just
to
look
at
what
the
US
dollar
strength.
You
know
what
that
impact
has
had
as
a
U.S
investor.
F
So
you
see,
if
you
look
at
the
third
line,
year-to-date
to
IFA
and
local
currency
has
fallen
14
and
a
half
percent,
but
we
translate
that
to
Dollars
it's
almost
twice
as
bad,
so
the
US
dollar
strengthening
or
if
you
want
to
look
at
it
as
foreign
currencies
weakening,
has
had
a
huge
impact
to
US
dollar
investors
in
foreign
markets
and
then
for
fixed
income.
F
Here
on
page
eight,
like
I,
said,
bonds
are
off
to
their
worst
start
to
a
calendar
year
ever
I
think
there's
been
some
nine
month
windows
that
were
you
know
just
as
bad,
maybe
worse,
but
for
the
first
nine
months
to
a
year.
This
is
the
worst
start
that
the
Barclays
aggregate
has
seen.
F
The
good
news
is
that
bond
yields
are
much
more
attractive
now
and
going
forward
return.
Expectations
are
a
lot
better
for
bonds
now
than
they
have
been
in
a
while.
So
there
is
some
good
news,
despite
the
pain
inflicted
in
getting
to
this
point,
I'll
move
to
page
11,
just
to
kind
of
keep
the
same
on
bonds
and
look
at
the
yields
curve
here.
F
So
you
see
that
the
green
line,
which
is
at
the
end
of
the
year,
the
yield
curve,
was
upward,
sloping
but
obviously
pretty
low
all
the
way
across
the
board,
and
you
fast
forward
nine
months
to
the
pink
line
here
at
the
top.
You
can
see
that
rates
are
much
higher
across
the
board,
but
that
the
slope
of
that
curve
is
gone
and
is
actually
two-year
rates
for
higher
than
10-year
rates.
So
the
yield
curve
inverted,
which
is
often
tied
to
you,
know
preceding
recessions.
F
It's
not
a
perfect
relationship,
so
we
can't
say
for
sure
that
that
will
happen
again.
I
think
there's
also.
A
lot
of
you
know
talk
on
is
the
tenure
lower
than
two
year
because
of
economic
reasons
or
just
because
the
U.S
market
has
so
much
more
attractive
rates
than
other
places
that
there's
so
much.
F
You
know
International
interest
in
the
tenure
that
that's
a
little
bit
of
why
the
tenure
is
lower
as
well,
but
anyway
much
different
yield,
curve,
shaped
and
levels
versus
nine
months
ago,
or
at
this
point
11
months
ago,
I'll
move
to
page
12,
which
is
obviously
the
the
main
talking
points
over
the
last
few
months
have
been
around
inflation.
F
So
you
see
here
the
highest
inflation
since
the
80s,
which
has
hopefully
peaked
the
FED,
doesn't
look
at
CPI
exactly,
but
in
general
you
know.
As
you
know,
the
FED
is
raising
rates
to
Target.
You
know
this
trend
line
and
just
seeing
the
inflation
Spike
up
so
much
I.
Think
one
challenge
is
this
is
especially
true
in
Europe.
Is
that
rate
hikes
don't
solve
supply
issues?
They
don't
change
the
war
on
Ukraine.
F
They
don't
change
lockdowns
in
China,
so
fedright
hikes
have
some
influence
on
inflation,
but
there's
other
factors
that
are
affecting
inflation.
F
That
rate
hikes
are
not
going
to
to
impact
just
a
couple:
more
slides
from
the
economic
section
on
page
14,
there's
a
lot
of
words
and
numbers
on
this
page,
but
in
general,
what
it's
showing
is
that
the
IMF
has
lowered
growth
forecasts
for
many
parts
of
the
world
and
raised
inflation
forecasts
at
the
same
time,
probably
not
surprising,
to
hear
either
of
those
two
things
and
then
I'll
finish
formal
comments
here
on
page
19,
just
look
at
the
unemployment
picture,
so
our
employment
data
is
pretty
good.
F
There's
low
levels
of
employment,
we're
pretty
much
back
at
pre-pandemic
levels.
One
issue
here
is
that
you
know
strong
employment,
wage
gains.
All
of
that
reinforces
the
inflation
issue
issue,
which
is
what
the
FED
is
obviously
trying
to
combat,
and
so
I
think
the
FED
is
willing
to
have
a
little
more
unemployment
if
it
means
lower
inflation.
F
So,
ultimately,
there's
a
few
kind
of
macro
factors.
You
know
that
I
mentioned
that
likely
lead
to.
Maybe
some
continue
to
high
volatility,
but
you
know
I'll
stop
there
and
see
if
Laura
wants
to
add
anything
or
Prabhu
or
see.
If
anybody
has
any
questions
on
the
economic
piece.
L
Yeah,
maybe
we
get
into
performance,
you
know,
I,
think
your
CIO
mentioned.
We
have
seen
some
stronger
returns
and
in
the
past
you
know,
since
the
end
of
when
this
report
was
produced,
but
Jared
please
proceed.
F
Okay,
so
I'll
move
to
page
31,
so
at
the
end
of
9
30
we
have
about
4.4
billion
in
assets.
That's
pretty
much
the
same
as
it
was
at
the
end
of
June
30th,
and
the
way
that
happened
is
is
that
inflows
roughly
offset
investment
losses
to
end
up
at
the
same
spot
and
as
as
we've
talked
about
performance,
has
been
pretty
good
since
the
end
of
9
30..
So
today
we
would
estimate
assets
closer
to
4.7
billion.
F
You
see,
all
allocations
are
within
target
range
here,
as
usual
on
page
32,
we
can
look
at
some
returns,
which,
as
we've
discussed,
are
are
better
census.
Report
was
run
quite
a
bit
better
in
certain
markets,
but
to
look
at
9
30,
you
see,
returns
are
negative
here
across
recent
time
periods,
which
certainly
no
one
wants
to
see.
F
However,
if
you
look
at
a
relative
basis,
the
plan
is
handily
outpaced,
the
60
40
portfolio
over
over
more
recent
periods,
and
not
only
that
the
plan
has
outpaced
the
peer
group
median
the
policy
Benchmark
and
The
investable
Benchmark
over
you
know
every
period
five
years
and
so
I
think
you
know.
Given
the
market
backdrop,
staff
has
done
a
very
impressive
job,
it's
very
difficult
environment
to
generate
relative
returns
and
outperform
everything
we're
looking
at
here
over
multiple
periods.
F
H
Anything
while
I'm
here,
no
thanks
Jared-
this
is
the
page
I
was
referring
to
earlier
to
Drew's
question
and
you
can
see
across
all
time
periods.
Here
you
can
look
at
the
funds,
return
versus
The,
investable
Benchmark
portfolio,
which
is
the
right
proxy
Benchmark
for
us,
and
you
can
see
that
net
of
and
these
numbers
are
net
of
fees
and
we
have
outperformed
across
every
time
period
again.
This
is
as
of
one
particular
day,
9
30,
and
this
may
change
on
12,
31
or
any
subsequent
quarter.
H
The
investable
actually
takes
into
account
the
private
Market
spacing
plan,
so
the
policy
Benchmark
will
include
the
entire
private
markets
Benchmark,
as
opposed
to
the
investable,
which
takes
into
account
that
we're
not
fully
invested
in
private
markets.
Wow.
F
Okay
from
here
I'll
jump
to
page
37,
just
to
highlight
a
couple
of
sections
within
the
portfolio
here
at
the
top
you
see
Artisan
Global
opportunities,
which
is
one
of
the
larger
weighted
individual
Investments.
F
So,
despite
the
negative
return,
you
can
see
for
the
quarter
at
top
decile
finish
beating
the
Benchmark
by
more
than
200
basis
points,
and
the
strategy
has
done
pretty
well
since
Inception.
If
you
look
out
the
far
right,
almost
top
desk
files,
since
it
was
added
another
section,
I'll
highlight
that
we
typically
don't
but
as
especially
impressive
returns.
F
Here
is
just
a
little
beta
section
in
general,
and
if
you
look
at
the
bottom
of
the
table,
the
relative
value
hedge
funds,
generating
significant
positive
returns,
despite
a
negative
environment
for
The
Benchmark,
so
some
nice
help
from
that
section
of
the
portfolio
as
well,
and
then
the
last
page
I'll
cover
as
a
prepared
comment,
so
just
to
highlight
page
61,
probably
mentioned
this
a
while
ago,
just
talking
about
sharp
ratio
and
sortino
ratio.
But
it's
very
impressive
here.
This
is
for
the
three
year
period.
F
Looking
at
peers,
you
know
defined
benefit
plans
over
a
billion
in
assets.
If
you
look
at
the
First
Column,
that's
returned,
you
see
a
near
top
quartile
finish
here.
Standard
deviation
also
has
the
best
quartile
finish
there
and
that's
resulted
in
top
quartile
sharp
ratio,
which
is
risk,
adjusted
return,
looking
at
all
risk
and
sortino
ratio.
F
The
top
quintile
finish
here-
and
this
is
looking
at
risk-
adjusted
returns
specific
to
downside
returns
so
anyway.
This
highlights
the
the
very
impressive
pure
relative
and
very
nice
risk.
Adjusted
returns
to
plant
has
had
for
the
three
year
period,
but
this
is
also
true
for
some
other
periods.
So
with
that
I'll
stop
and
see.
If
anybody
has
any
questions
on.
O
Jared
I
have
a
question.
The
last
page
that
I
just
went
over
is
that
for
the
entire
plan
or
just
the
public
portion
of
the
plan.
O
O
Well,
if
nobody
else
has
question,
I
have
a
second
question:
I
I
just
want
to
maybe
between
you
and
Laura,
get
your
thoughts
on
the
tips
component
of
a
portfolio.
I
know
it's
kind
of
a
small
allocation,
but
I
kind
of
want
to
get
a
sense
of
the
purpose
and
and
the
performance
that
you've
seen
recently.
L
Sure
so,
generally,
given
that
we
try
to
develop
long-term
portfolios
to
respond
to
a
variety
of
different
Market
environments,
having
a
tips
allocation
is
usually
part
of
our
strategic
recommendations
for
most
of
our
clients.
L
Given
that
we
can
see
environments
where
fixed
rate
investment
grade
bonds,
like
we've
seen
recently,
which
of
course
we
didn't
anticipate
the
the
worst
start
ever
into
a
year,
but
we
like
to
have
some
diversification
into
tips,
and
so
one
thing
that's
been
great
in
your
plan
is
that
you
have
short-term
tips.
A
lot
of
investors
have
Market
duration
tips
which
actually
have
a
duration.
That's
a
little
bit
longer
than
investment
grade
bonds,
and
so,
even
though
tips
are
indexed
to
inflation,
you've
seen
some
some
really
more
negative
returns
for
broad
tips
allocations.
L
You
had
shifted
to
short-term
tips
in
your
plan,
and
so
you
can
see
that
the
short
term
tips.
You
know
we
shifted
that
money
from
investment
grade
bonds,
so
investment
grade
bonds
being
done.
14.3
percent
per
the
for
the
year
to
date,
period
and
tips
only
being
down.
3.9
percent
has
been.
You
know
a
positive
sort
of
relative
driver
performance
and
protector
of
some
of
the
assets
relative
to
just
broad
investment
grade
bonds.
O
Yeah,
the
reason
why
I
was
asking
was
I
was
thinking
that
tips
was
more
for
inflation
protection
and
it
doesn't
seem,
like
you
know,
in
the
worst
inflation
environment
we've
seen
a
while
that
that
component
came
through
I.
Think
if
the
short
duration,
what
you
were
seeking,
I'm
wondering
I'm,
just
questioning
whether
we
shouldn't
put
in
short
duration,
bonds.
L
Yeah
short
duration,
Bonds
were
also
negative.
I
would
have
to
look
up
the
exact
negative
return,
but
you
know
I
think
if
you
think
about
this
tips
allocation
as
relative
to
investment
grade
bonds.
You
know
we
want
to.
We
want
to
maintain
a
certain
amount
in
fixed
income
in
your
funds,
so
that
you
feel
comfortable
taking
risk
on
private
markets
and
public
equities
and
can
maintain.
You
know
some
of
the
assets
that
need
to
be
paid
out
in
benefits
and
whatnot.
H
Right,
thank
you,
Mr
chairman,
and
so
with
that
we
move
on
to
2E,
but
before
Laura
and
Jared
can
start
on
that,
I
I,
don't
want
to
forget
I
want
to
let
the
board
know
that
on
November
9th
I
did
present
the
feed
report
to
the
city
council
and
with
trustee
ganapati,
and
so
thanks.
Thanks
to
her
for
accompanying
me,
I
believe
the
fee
report
was
well
received.
H
Vice
mayor,
Jones
noted
with
satisfaction
that
we've
brought
down
our
management
fees
over
the
last
five
years
and
mayor
elect
Mayhem,
actually
asked
the
question
been
working
on.
Has
your
plan
added
value
after
fees
and
costs
so
has
there
been
Alpha
generated
after
all,
costs
and
I
gave
him
the
numbers,
and
he
noted
that
with
satisfaction
that
we
have
done
that
we
have
done
quite
well
compared
to
our
benchmarks.
L
Great,
thank
you,
so
I
will,
in
a
concise
manner,
talk
about
the
health
care
trust
we
have
starting
on
page
29
here,
because
all
of
the
prior
slides
are
on
the
economic
Market
environment,
which
Jared
discussed
on
the
pension
portfolio.
So
if
you
take
a
look
at
page
29,
you
can
see
the
healthcare
trust
current
balance,
just
under
260
million
as
of
the
end
of
September,
and
then
we
can
skip
forward
to
Performance
of
a
fund.
L
You
can
see
that
the
third
quarter
of
2022
had
a
negative
return
of
4.9
percent
for
the
one
year
period
down
13.2
you
can
see
the
peer
relative
returns
are,
for
the
longer
time
periods
pretty
close
to
median.
L
If
you
recall,
this
is
a
riskier
sort
of
Health
Care
trust,
given
the
target
return
that
you're
you're
aiming
for
in
terms
of
your
Actuarial
expectations,
and
it
has
come
down
a
little
bit
historically,
the
expected
return
or
the
target
Actuarial
as
soon
we're
favorite
term
for
this
fund
was
the
same
as
the
pension,
and
so
a
lot
of
a
lot
of
funds
take
a
lot
less
risk
in
their
health
care
trust
than
the
pension.
L
This
fund
is
a
bit
riskier
which
has
worked
out
really
well
in
most
of
the
years
since
the
global
financial
crisis
I
actually
looked
back
at
the
report
as
of
the
end
of
December
2021
and
the
performance
for
every
trailing
time
period
at
that
point
was
in
the
top
quartile
of
the
peer
group.
But
then,
when
we
have
a
negative
Market
environment,
this
plan
being
a
bit
riskier
than
its
peers
means
the
peer
relative
performance
in
the
the
recent
near
term
has
been
a
bit
more
negative.
L
B
Was
open,
I'm
Laura?
We
should
be
more
risky
right.
This
is
still
a
nascent
from
the
Jew
grew
disagree
with
that
statement.
L
I
think,
given
the
liquidity
information
that
we're
aware
of
the
ongoing
contributions,
it's
it's
reasonable
to
have
this
be
riskier
than
peers.
Great.
B
All
right
Peru:
do
you
want
to
wrap
us
up.
H
Yeah,
nothing
further
Mr
chairman
I
want
to
thank
Laura
and
Jared
for
the
excellent
presentation
and
we've
also
again
noted
with
some
satisfaction
our
performance.
You
know
it's
been
a
down
year.
We
did
well
last
year
and
then
up
here
and
in
a
down
here.
H
We
continue
to
too
well
relative
to
our
peers
and,
as
Jared's
chart
pointed
out
on
the
sortino
ratio,
we
we
take
less
risk
than
our
peers,
so
we
are
in
the
top
quartile,
meaning
we've
taken
less
risk,
and
our
performance
has
also
been
in
the
top
quartile,
meaning
we've
actually
on
an
absolute
basis,
also
done
better
than
our
peers.
The
combination
of
that
puts
us
again
in
the
top
quartile
of
our
peers
on
a
risk
adjusted
basis,
which
is
what
we've
been
aiming
for
for
a
few
years
now.
H
Yes,
he
was,
he
was
right.
We
do
need
to
take
less
risk
than
our
peers,
and
we've
done
that
for
a
few
years
now-
and
you
know
the
market
presented
us
an
opportunity
to
read
this-
the
portfolio
and
the
boards
moved
very
quickly
to
do
it
at
the
right
time,
and
so
we've
sort
of
on
the
downside.
We
were
protected
when,
when
there
was
a
when
there
was
a
drawdown
in
in
the
last
bear
market
and
on
the
upside,
we
immediately
participated
by
increasing
our
beta.
H
C
L
You
know
you
can
never
predict
the
market
environment
that
you're
going
to
have,
but
I
think
being
being
far
lower
risk
than
peers
didn't
work
out
in
in
many
Market
environments,
and
so
I
I
still
maintain
that
it's
I
I've
never
seen
the
timing
work
out
so
well,
you
know
in
my
20
years
in
the
industry
and
Makita
is,
you
know,
longer
much
longer
history,
the
fact
that
you
all
rewrist,
when
you
did
at
the
start
of
the
pandemic
and
actually
were
willing
to
take
that
leap.
L
B
Well,
you
know
Laura,
my
my
favorite
quote
of
all
time
is
from
baseball
manager,
Branch
Ricky,
wouldn't
even
you'll
know
the
quote,
and
as
long
as
it's
embedded
in
a
much
longer
quote,
that
explains
it.
Because
luck
is
the
residue
of
design,
which
is
what
you're
saying
look
we
got
lucky,
but
we
said
fortune
favors
have
prepared
mine
great
any
other
questions.
B
I'll
notice
we're
not
carrying
over
any
old
business,
so
section
three
is
empty
over
to
you.
Roberto.
P
Thank
you,
Mr,
chair
and
good
morning
to
everyone.
I
hope
you
all
had
a
chance
to
had
a
wonderful,
Thanksgiving
holiday,
so
welcome
back
to
your
last
board
meeting
of
the
calendar
year.
So
let
me
start
by
congratulating
chair.
Lance
I
indicated
earlier
this
morning.
P
The
four
trustees
that
reappointment
at
the
board-
and
we
are
reappointed
by
the
city
council
in
November,
so
I
want
to
welcome
Diego,
Sunita
and
his
war
and
how
we're
back
for
another
four-year
term
your
hard
work
and
education
to
the
plan
and
the
plan
members
is
greatly
appreciated.
So
we're
welcome
you
back
and
look
forward
to
working
with
you
for
the
next
four
years.
So
thank
you
very
much
and
congratulations.
P
I
also
wanted
to
let
you
know.
We
have
been
over
time
discussing
the
possibility
that
at
some
point
we
are
going
to
go
back
to
personal
meetings
remains
to
be
seen
when
would
that
take
place,
whether
it's
going
to
be
February
March,
possibly
even
as
far
as
April,
assuming
not
significant
changes
in
the
covid-19
pandemic,
I
foresee
something
happening
sometime
in
the
first
quarter,
2023
or
as
indicated
as
early
as
April
2023..
P
The
reason
I'm
bringing
this
up
is
because
some
of
you
are
new
to
the
board,
for
some
of
you
had
a
chance
to
actually
attend
in-person
meetings.
You
are
aware
that
our
meetings
were
scheduled
for
the
City
Hall,
the
wings
rooms
right
where
the
City
Hall
is
and
where
right
next
to
where
the
city
council
meets
on
a
weekly
basis.
P
That
area
actually
is
going
to
be
going
some
Renovations
and
improvements
over
the
next
six
months
between
January
and
July
I'm.
Only
saying
this
because
we
are
going
to
be
working
with
the
city
to
find
out
when
we
are
scheduled
to
go
back
to
imperson
meetings
where
we
will
have
those
meetings
right
now.
P
My
educated
guess
is
that
it
will
be
either
at
the
actual
city,
council
chambers
or
our
fifth
Throne
location
in
our
building
on
the
first
street
or
a
combination
of
so
we
will
keep
you
posted,
but
I
just
wanted
to.
Let
you
know
that
that's
the
case.
We
are
not
able
to
meet
back
at
this
at
the
ruins
rooms
until
the
second
half
of
2023..
P
So
with
that
I
just
wanted
to.
Let
you
know
that
staff
is
also
working
on
the
recruitment
for
a
position
that
was
vacated
by
Body
Saturday
of
the
administrative
group
with
heavy
retirement.
So
we
are
working
with
HR
to
kick
off
the
process
for
recruiting.
For
that
position
we
will
keep
you
posted
and
then
keeping
it
with
staff.
I
also
wanted
to.
Let
you
know
that
marivette
Garcia
was
recently.
P
To
the
senior
supervisor
position
she
started
working
with
our
office
in
2014
and
has
worked
in
accounting,
Investments
and
now
in
the
benefits
area.
So
she
will
be
our
new
senior
supervisor
for
the
benefits
area.
So
congratulations
to
maribek
and
good
luck
to
you.
We'll
look
forward
to
working
with
you
and
the
rest
of
the
staff.
Also,
just
yesterday
the
retiree
open
enrollment
was
completed.
P
That's
the
time
of
the
motor
November
board.
Retirees
get
the
chance
to
either
stay
with
the
health
care
provided
that
they
have
or
make
whatever
changes
are
necessary.
I,
don't
have
all
the
data
at
this
point
of
what
took
place.
I
know
we
were
quite
busy
the
first
two
weeks
of
the
month,
so
at
the
next
meeting,
I
will
provide
you
with
any
kind
of
data
related
to
open
enrollment,
but
as
far
as
I'm
concerned
it
was.
P
It
went
through
it
with
our
Hico,
especially
instead
of
the
fact
that
this
was
the
first
year
over
the
last
three
that
we
actually
had
a
new
person
open
enrollment.
We
actually
met
at
the
with
members.
Barbara,
if
you
remind
me
I,
think,
is
where
the
Federated
retire
regroup
usually
have
their
meetings.
Do
you
think
about
the
location,
bumper
laninger.
P
P
One
was
we
actually
have
a
quarterly
staff
meeting,
we'll
be
having
them
for
almost
10
years,
and
so
we
had
one
last
month
where
we
keep
the
staff
up
today
on
the
latest,
not
only
at
the
ball
level
but
at
the
city
council,
and
provide
some
training
information
to
the
staff
and,
lastly,
I
just
kind
of
want
to
give
you
a
sense
of
the
upcoming
Christmas
holiday
and
let
you
know
that
the
offices
of
Retirement
services
will
be
closed
from
December
23rd
through
December
26th
and
again
from
December
30th
to
January
2nd.
P
We
will
have
a
very
small
staff
at
the
office
the
week
of
the
27th
to
the
29th
of
December
because
of
the
closure,
so
we'll
have
some
stuff
at
the
office,
but
it
would
not
be
the
usual
number
of
staff
that
would
be
obviously
to
provide
customer
service.
We
still
do
have.
Sometimes
customers
come
by
the
office,
although
obviously
not
as
much
as
they
used
to
before
the
pandemic.
P
M
M
Your
fiduciary
responsibility
is
immense
and,
as
someone
who
also
manages
some
trustee
funds,
I
understand
how
important
that
fiduciary
relationship
is
so
I
just
want
to
acknowledge
the
work
that
you
do
and
it's
clear
by
the
questions
that
you
asked
around
the
Investments
and
the
returns
that
you
are
all
very
knowledgeable
and
concerned
about
where
the
the
assets
are
going
and
protected
and
and
invested
and
I
just
wanted
to
acknowledge
that,
and
thank
you
for
that.
Also
I
want
to
thank
Sunita,
Howard,
eswar
and
Dick.
M
So
we've
got
a
lot
going
on.
We
have
a
new
mayor
as
you
know,
and
we
have
a
fairly
new
Council
in
January.
The
new
mayor
takes
over
and
we
have
only
four
veteran
council
members
returning
I
among
them.
The
rest
are
new
council
members
with
two
vacancies:
the
on
Monday.
We
have
a
special
meeting
to
discuss
how
we
will
replace
or
how
we
will
fill
the
vacancy,
be
it
a
special
election
or
be
it
an
inner,
important
appointment,
followed
by
a
special
election
or
a
an
appointment.
M
It's
the
appointment
would
be
to
fill
out
the
term,
which
is
just
a
two-year
term
remaining
and
then
anyone
appointed
could
could
run
again
or
could
run.
So
that's
that
you've
probably
seen
a
lot
of
messages
about
that.
The
the
conversation
is
around
the
cost
of
the
special
election,
but
I've
received
quotes
from
the
the
city
clerk's
office
that
the
could
be
as
high
as
a
10
million
dollars.
M
If
we
hold
a
traditional
election
where
people
could
go
into
the
polls
and
vote
versus
about
half
that
if
it's
a
mail-in
ballot
so
to
me,
I
I,
really
I
come
down
on
this
issue
on
the
side
of
voting
for
having
the
two
districts
who
have
open
vacancies,
District,
8
and
10.
to
allowing
them
to
vote
I
would
certainly
want
to
be
able
to
vote
if
I
had
a
vacancy
in
my
district.
M
So
that's
where
I'm
coming
down
at
the
moment-
and
in
case
you
ask
with
the
new
council
meeting
at
Council
and
with
the
new
mayor,
there
may
be
new
committee
assignments,
so
this
may
be
my
last
meeting
here.
I,
don't
know,
I,
don't
know
what
I
will
get
and
what
the
new
mayor
will
ask
me
to
do
will
be
sitting
down
and
discussing
where
I'd
like
to
go.
M
I
certainly
enjoyed
serving
on
this
board
for
you
with
you,
and
have
learned
a
lot
about
these
assets,
these
Investments
and
really
value
the
work
that
you
do
and
I
know
your
job
is
to
protect
the
assets.
But
I
also
know
that
you
take
very
seriously
the
unfunded
liabilities
and
the
effect
on
the
of
the
unfunded
liabilities
on
our
general
budget.
So
I
I
just
want
to
honor
and
acknowledge
all
of
the
work
that
you
do
and
the
responsibility,
the
immense
responsibility
that
you
have
I
have
to
have
to
say
other
than
it's.
M
It's
been
a
pleasure
I,
don't
know
if
I'll
be
back
in
January
or
not
hopefully,
but
we'll
see
so
with
that
I'll
close
and
and
if
anyone
has
any
questions,
I'm
happy
to
take
them.
B
All
right,
hey
Roberto,
can
I
ask
you
to
favor.
Would
you
mind
signing
a
very
short
friendly
note
to
the
mayor
I'm
indicating
that
we
have
some
really
important
Financial
work
in
2023?
Thank
him
for
reappointing
our
members,
and
would
you
ask
them
if
you
reduce
the
courtesy
of
trying
to
leave
Pam
in
place
if
you're
willing
to
serve
it
sounds
like
you
are
Pam
I'd
hate
to
see
you
turn
over
at
such
critical.
P
I
can
send
it
well,
the
government
mayor
it
sound
recorder.
I
can
send
the
thank
you,
but
they
may
relax
with
the
Council
of
the
Miralax
will
be
then
selecting
the
committee
assignments
for
the
new
year.
So
it
will
not
be
same
so
it
will
be
sort
of
like
two
separate
yeah.
P
Yes,
I
met
council
member
Mayhem,
correct
yes,
yes,
I
have.
A
P
And
and
do
I
want
to
I
want
to
say
Japan.
Thank
you
for
your
years,
working
with
the
trustees
of
the
of
the
war
of
retirement
for
police
and
fire,
and
of
course,
as
you
know,
I
I
can't
speak
for
the
process.
I
leave
that
up
to
you,
but
I'm
sure
you
I
suspect
you
could
ask
to
come
back
to
this
board
and,
as
chairlance
I
indicated,
that
they
will
welcome
you
to
open
arms.
So
if
there's
anything,
I
can
do.
P
If
you
think
that
major
elect
Mayhem
would
like
to
talk
to
us,
I'm
happy
to
speak
to
him
as
well,
but
anyway,
good
luck
to
you
and
thank
you
very
much.
M
I
appreciate
that
thank
you
floor
is
open.
Q
Mr
chair
dick
Santos
sure
jump
in
Jack.
Thank
you,
council,
member
Foley,
for
your
service
and
I
hope
that
you
do
return
because
of
your
experience
and
your
relationship
with
us
has
been
extraordinary
and
and
I've
served
for
something
like
26
years
on
the
Retirement,
Board
and
I
said
with
the
prior
Council
and
I
want
to
say
your
knowledge
and
expertise
in
helping
out
is
really
a
difference.
Q
If
I
was
you
I
would
let's
take
this
back
the
cost
of
this
elections?
You're
talking
about
I,
don't
understand
any,
but
when
it
comes
to
accounting,
I
hope
you'll.
Look
into
that
because
we
Face
the
same
thing:
the
water
district
and
it's
unreasonable
the
cost
of
an
election,
but
I
totally
support
what
you're
saying
the
only
way
is
having
democracy,
let
people
vote.
So
thank
you
for
your
service
to
all
of
us.
I
hope
you
return.
B
Great
anybody
else,
Roberts
alternative-
you
don't
make
some
perforatory
remarks
before
Chiron
goes
good
you're
running
the
show
Roberto.
P
Thank
you.
Thank
you.
Mr
chair,
so
Nick
sight
into
the
agenda
is
the
discussion
in
action
and
the
final
results
of
the
actual
evaluation
for
the
pension
plan
by
Kyron
we'd
like
to
welcome
Bill
Hallmark
for
the
presentation
at
the
last
meeting
you
more
accurately
receive
the
preliminary
results,
I'm,
not
sure
that
they
changed
at
all.
If
any
from
the
last
time,
and
in
this
particular
presentation
we
should
be
short
and
sweet
I
think
we
are
looking
for
actual
action
by
your
board
to
approve
the
evaluation.
P
R
Good
morning,
thank
you,
Roberto.
Let
me
bring
up
the
presentation
here.
R
Okay
and
I
have
Ann
Harper
with
me
to
help
present
these
results
and
get
going
here.
I
just
wanted
to
put
this
in
context.
Roberto
already
explained
that
last
month
we
presented
the
draft
pension
valuation
results.
These
are
the
final
results.
There's
very
minor
changes
from
the
final
from
the
draft
results,
so
mostly
we'll
be
looking
at
what
this
means.
Looking
forward
in
this
presentation,
we
also
the
next
agenda
item.
Have
the
draft
opeb
valuation
results
because
we've
got
the
final
pension
done
this
month.
R
R
So
this
chart
looks
remarkably
similar
to
the
chart
we
presented
last
month.
The
funded
status
on
market
value
of
assets
basis
dropped
from
87
to
78
percent
over
the
year,
but
on
the
smooth
Actuarial
value
it
increased
from
77
to
80
percent.
You
can
see
the
breakdown
by
tier
on
the
right
hand,
side
I.
R
Think,
probably,
since
we
went
through
this
last
time,
I
think
the
thing
I
just
want
to
note
is
the
difference
in
size
between
the
tiers
tier
two's
been
around
for
a
little
while,
but
it
is
still
a
very
young
tier
and
the
liabilities
in
that
tier
are
are
very,
very
small.
Compared
to
the
tier
one
liability
tier
two
is
more
than
a
hundred
percent
funded,
it's
tier
one.
That
is
not
a
hundred
percent
funded.
R
The
other
thing
I
would
note
on
this
chart
is
the
blue
and
the
gold
are
the
liabilities
for
members
who
are
no
longer
working
for
the
city,
whereas
the
red
is
the
liability
for
the
active
members,
the
blue
and
the
gold
represents
about
70
percent
of
the
liability
for
the
plan.
So
most
of
that
liability
is
for
people
who
no
longer
work
for
the
city.
R
Glad
we
coordinated
that
Roberto,
so
the
left
side
chart
here
is
showing
the
the
funded
ratio
based
on
the
market
value
of
assets.
The
gold
diamonds
are
the
your
plan
and
the
bars
are
the
range
in
the
public
plan
database,
which
is
about
220
plans,
large
public
plans
across
the
the
country,
and
you
can
see
in
the
early
2000s,
we
were
among
the
best
funded
plan.
R
After
2009,
we
were
still
better
than
than
the
median
we
dropped
down
to
around
the
the
median
and
peaked
up
a
little
bit
with
the
2021
returns.
Now,
keep
in
mind.
R
You
guys
are
right.
On
top
of
this,
the
discount
you
lowered
the
discount
rate
early
compared
to
other
plans.
Other
plans
have
been
catching
up,
but
the
median
in
the
public
plan
database
in
2021
was
still
seven
percent
and
you're
at
6.625.
So
there
is
a
clear
difference
here
because
of
your
lower
discount
rates.
R
That
same
story
holds
in
the
right
hand,
chart.
This
is
from
our
survey
of
California
systems,
we're
looking
at
39
different
California
systems
and
their
funded
status
based
on
the
market
value
of
assets.
You
were
above
the
median
dropped
to
the
median
and
a
little
bit
below
in
2021.
You
shot
well
above
the
the
median
with
your
investment
returns.
We
don't
have
the
statistics
for
2022,
yet
for
all
the
California
systems,
but
again
your
discount
rate
is
lower
than
most
of
the
the
systems
in
California.
C
Hey
bill
just
question
on
that:
why
did
the
blue
light
blue
bars
on
the
right
side?
Look
so
big
if
it's
75,
750,
percentile
and
higher.
R
Yeah,
so
so
that
on
the
California
chart,
I
should
have
pointed
this
out.
We
go
all
the
way
up
to
the
maximum
funded
ratio,
so
they're,
the
City
of
Fresno
plans
have
been
very
well
funded
and
an
outlier,
and
so
the
top
of
the
light
blue
bars
are
the
City
of
Fresno
plans.
R
R
Because
the
the
blue
goes
all
the
way
up
to
the
maximum
funded,
so
the
oh
okay,
so
it's
going
from
the
75th
percentile
all
the
way
up
to
the
the
maximum
in
the
in
the
public
plans
data
chart
we
only
go
to
the
95th
percentile,
so
any
of
those
outliers
are
are
ignored.
Okay,
thanks.
P
Bill,
sorry
to
bother
you,
you
did
address
a
lot
of
the
issues.
I
was
actually.
My
question
was:
if
you
go
back
to
one
more
slide,
my
question
was
I.
Guess
you
can
look
at
it
in
the
graph
where
it
was,
particularly
as
it
relates
to
the
the
ratio
of
the
pay
status
versus
the
ink
versus
the
active
members
compared
to
the
other
systems.
That's
that
was
a
more
specific
question.
I
was
asking.
R
Sang
on
my
my
experience,
I'd
say
most
of
the
other
plans.
I
see
it's
about
60
to
65
percent
for
the
in
pay
and
your
plan
is
around
70..
So
it's
a
more
mature
plan
than
what
we're
typically
seeing.
R
Contribution
rates,
so
this
this
chart
did
not
change
too
much
since
the
last
time
in
particular,
the
the
contribution
rates
stayed
about
the
same.
The
dollar
amount
contribution
for
the
city
actually
went
down
by
about
a
million
dollars
due
to
the
adoption
of
2.5
percent
inflation
and
amortization
payment
growth.
R
So
we
increase
the
amortization
payment
growth
from
Two
and
a
quarter
to
two
and
a
half
which
reduced
the
the
current
amortization
payment
for
the
city,
slightly
increasing
it
later
on
so
I
think
the
the
thing
I
want
to
point
out
here
and
really
to
set
up
the
next
slide
is
we
focus
a
lot
on
how
much
of
the
contribution
is
going
to
pay
down
the
ual
and
how
much
is
going
to
pay
the
interest
on
the
ual,
the
unfunded,
and
these
are
projected
from
our
valuation
to
the
next
year
when
the
payments
are
being
made.
R
But
so,
following
the
2021
valuation,
we
were
expecting
for
fiscal
year.
2023.
about
41
of
pay
in
the
contribution
or
about
over
a
hundred
million
dollars
is
going
directly
to
pay
down
the
principal
of
the
unfunded
liability.
So
we've
got
our
contribution
rates
high
enough
that
it's
paying
down
paying
the
interest
and
then
paying
a
hundred
and
six
million
dollars
was
the
expectation
for
how
much
it
pays
down
on
the
UL.
R
Now,
when
you
get
a
lot
of,
that
is
because
we
have
great
investment
returns,
so
it
reduced
the
ual
and
reduced
that
interest
on
the
ual
that
we
were
expecting
in
2022.
We
had
the
reverse,
where
the
investment
returns
were
poor,
and
so
the
interest
on
the
ual
shot
up,
and
so
the
amount
that
is
going
to
actually
reduce
the
dollar
amount
of
the
ual
has
shrunk.
R
That
is
to
be
expected.
The
interest
on
the
ual
is
calculated
based
on
the
market
value
of
assets.
It
will
fluctuate
a
lot
from
year
to
year
and
we
want
the
contribution
to
be
smoother
than
that,
and
so
the
contribution
is
only
recognizing
a
part
of
that
that
change
from
year
to
year,
but
even
with
those
losses,
we're
projecting
for
2024
that
the
contribution
about
65
million
of
it
would
go
to
reduce
the
actual
dollar
amount
of
the
UIL.
R
And
so
we
wanted
to
show
you
a
comparison
to
the
plans
in
the
public
plan
database
and
on
the
prior
side.
I
was
emphasizing
that
those
are
the
projected
amounts
at
the
time
of
the
valuation
and
we
have
a
one-year
delay
between
the
valuation
and
when
the
contribution
rates
go
in
to
get
the
figures
out
of
the
public
plan
database.
R
R
But
this
is
the
amount
of
the
ual
principal
rate
each
year
from
2011
through
now
to
2022.,
and
you
can
see
there
are
a
couple
takeaways
here.
I
want
you
to
see.
One
is
you're
the
gold
diamond
and
look
how
volatile
the
gold
diamond
is
compared
to
the
bars
and
that
really
worked
to
our
advantage
in
2022
when
we
had
good
investment
returns
that
really
shoots
that
percentage
up,
but
it's
much
more
volatile
than
what
we
see
with
other
plants
and
that
gets
back
to
the
theme.
R
We've
talked
about
every
year
about
how
mature
the
plan
is
and
how
you're
more
sensitive
two
changes
and
and
that
works
both
for
and
against
you.
R
The
other
thing
I'd
note
is
even
given
that
volatility
for
the
most
part
you've
been
at
the
upper
ends
of
this
chart
and
being
really
I,
would
say
very
responsible
about
keeping
the
contributions
at
a
level
to
pay
down
the
ual.
R
You
can
see
even
back
in
back
in
2011,
there
were
very
few
plans
that
had
increased
their
contribution
sufficiently
after
2009
to
make
any
progress
on
the
ual
very
few
plants,
and
that
has
gradually
improved
over
time
to
where
now
we've
got
about
half
the
plans
making
payments
to
pay
down
their
ual,
but
only
half
the
plants,
whereas
your
plans
you've
had
a
year
or
two
where
you've
Fallen
Below,
based
on
the
market
value
where
we'd
have
a
market
value
loss
and
the
contributions
in
place
did
not
cover
it,
but
that
quickly
changed
and
recovered.
R
So
I
think
this
shows
both
the
the
volatility
you're
susceptible
to
and
also
how
responsible
you've
been
at
trying
to
pay
down
the
ual
for
this
plan.
S
Great
thank
you
Bill
good
morning,
everyone
Bill
focused
mostly
on
the
historical
aspects
of
of
the
pension
plan,
the
funded
status
and
contributions
and
actually
where
we
are
today,
with
this
current
valuation,
I'm
going
to
look
more
towards
the
future,
with
some
projections,
so
starting
with
projections
of
the
funded
status
and
the
unfunded
accrued
liability
on
the
left
hand,
side
of
this
graph
and
we're
looking
at
deterministic
projections,
meaning
that
all
assumptions
are
met
each
and
every
year
going
forward,
and
we
know
that
that's
not
reality,
but
that's
that's
based
on
our
actual
assumptions,
and
it's
also
based
on
the
fact
that
the
plan
is
going
to
earn
6.625
each
and
every
year.
S
Historically,
you
are
at
74
percent
now
you're
at
78
percent
funded,
and
this
is
on
a
market
value
basis,
and
you
can
see
that
the
plan
is
making
great
progress,
especially
in
the
first
five
to
ten
years
of
this
projection,
and
that's
when
the
contribution
rates
are
a
bit
higher
then
moving
to
the
historical
and
projected
ual
outstanding,
ual
I.
S
Think
to
note
on
this
slide
we're
showing
both
the
market
ual
and
the
Actuarial
ual,
and
to
note
here
specifically
at
how
drastic
and
significant
that
ual
balance
is
dropping
over
the
course
of
the
next
five
to
ten
years,
and
this
is
a
result
of
you
know.
The
the
drop
is
a
result
of
the
board's
amortization
policy
to
kind
of
smooth
out
the
ual
being
paid
for,
and
it's
also
you're
more
at
the
tail
end
of
your
overall
amortization
periods
for
all
your
layers.
S
So
again,
when
Bill
was
showing
you
historically
what
it
looked
like
paying
your
unfunded
accrued
liability.
This
also
shows
going
forward
that
you're
on
the
right
trajectory
and
a
path
to
pay
down
that
unfunded.
S
So,
as
Bill
mentioned
earlier,
the
tier
two
is
fully
funded,
so
there's
no
ual
payments
going
towards
tier
two,
all
of
the
amortization
layers
or
for
tier
one,
and
you
can
see
that
this
is
all
of
the
different
layers
that
you
have
and
you're
starting
in
2024.
You
have
over
30
layers
of
your
unfunded
accrued
liability,
and
what
does
that
that
mean?
If
you
look
at
it
in
terms
of
maybe
an
individual
home
equity
loan?
S
If
you
took
out
two
home
equity
loans
every
year
for
the
last
15
years,
there's
different
payments
for
each
and
every
one
of
those
home
equity
loans
and
those
are
stacked
up
here.
The
the
Assumption
changes
are
the
purple
bars
and
then
the
gain
and
loss,
the
actual
gains
and
losses
are
the
yellow
bars
and
the
split
pretty
evenly
between
the
two.
S
So
you
can
see
over
the
in
the
next
five
years.
That's
a
pretty
stable
growth,
just
slightly
growth
in
the
ual
payments,
but
then
from
2028
down
to
2036.
You
have
a
dramatic
decline
in
those
ual
payments.
It
goes
from
about
140
million
dollars
down
to
zero
within
10
years,
and
that's
that's
remarkably
quick
when
you're
looking
at
how
that
unfunded
is
being
paid
off.
S
Oh
actually,
one
I
did
want
to
note
one
more
thing,
so
this
is
only
showing
the
current
amortization
layers
if
there's
any
future
gains
and
losses
that,
obviously
we
don't
know
about
yet
it
would
just
shift
that
blue
line
up
or
down
depending
on
if
it's
a
gain
or
loss,
you're
going
to
have
that
same
overall
trend
because
of
how
many
bases
there
actually
are
currently
in
place.
S
So
now,
looking
at
projections
of
the
contributions
on
the
left
side,
we're
showing
the
projected
contribution
rates
and
then
on
the
right
side,
we're
showing
the
contribution
dollar
amounts.
S
To
note
on
the
left
side,
you
can
see
the
contribution
rate
is
currently
at
77
percent
for
the
city
and
there's
a
slight
downward
tick
over
the
next
four
years,
as
the
net
asset
gains
over
the
last
four
years
are
going
to
be
phased
in,
there's
a
slight
blip
up
up
to
74
percent
and
that
blip
there
is
due
to
the
2022
Actuarial
loss
on
the
assets
fully
being
recognized.
S
But,
most
importantly,
you
can
you
note
that
there's
that
similar
downward
quick
trend
of
reducing
the
contribution
rates,
similar
to
how
the
reduction
in
the
UIL
was
showing
so
again,
very
good
news
and
then
looking
at
the
actual
contribution
amounts
very
similar
Trends.
You
do
see
slight
upticks
in
the
the
dollar
amount
of
the
contributions
being
paid
and
that's
because
of
those
ual
payments
as
a
dollar
amount
are
expected
to
increase
within
with
assumed
inflation
of
2.5
percent,
but
again,
a
very
similar
pattern
here.
S
And
that's
due
specifically
to
the
asset
loss
in
2022..
If
you
looked
at
the
2020
2020
projections,
though
right,
you
would
see
that
that
line
would
be
much
higher
as
well.
So
there
was
just
two
years
where
it
was
very
volatile
with
those
returns.
S
Okay,
so
the
the
topic
of
the
day
of
it
always
is
is
the
maturity
of
San
Jose's,
Pension,
Plan,
the
police
and
fire.
This
is
showing
the
membership
counts
back
from
2003
to
up
to
the
current
day,
and
we
did
show
this
exact
graph
to
you
last
time
and
there
was
much
discussion
on
it.
So
I'm
not
going
to
spend
a
whole
lot
of
time.
S
I
just
want
to
you
know,
set
the
stage
that
you
have
a
very
mature
plans
and
in
terms
of
their
the
number
of
inactives
that
the
active
population
has
to
support.
S
This
is
what
this
graph
represents
in
the
support
ratio,
so
since,
basically
back
in
2010
and
2011
the
trend,
what
happened
with
the
active
membership
that
declined
dramatically
about
15
from
about
2
000
actives
to
1700,
but
at
that,
and
that
is
never
recovered
in
the
act
of
population
since
then,
but
but
at
that
same
time
frame,
you
see
almost
a
doubling
of
the
inactive
membership
so
again,
just
a
very,
very
mature
plan
in
comparison
to
your
peers
as
well.
S
So
quantitatively,
looking
at
a
measure
of
maturity
are
these
leverage
ratios,
and
this
is
one
of
we've
been
showing
these
for
years.
I
know
Drew
especially
likes
these
graphs,
so
this
is
showing
the
different
sensitivities.
Your
plan
has
to
investment
volatility
and
assumptions.
So,
on
the
left
hand,
side
we
have
the
asset
leverage
ratio,
which
is
simply
the
amount
of
assets
on
the
market
value
basis,
divided
by
your
pay,
active
payroll
and
then
the
liability
leverage
ratio.
Is
your
plans
liability
divided
by
your
member
payroll?
S
S
S
So
that's
why
we're
showing
San
Jose
as
a
whole
here,
so
it's
more
of
an
Apples
to
Apples
comparison
when
we're
looking
at
this
think
to
note
looking
at
2010
and
2011,
the
jump
in
the
the
asset
leverage
ratio
for
police
and
fire
from
below
10
to
almost
15
is
due
to
that
market
decline
in
your
active
membership.
S
B
I
know
I've
asked
them
before
so
that
database
might
have
say
5
000
plans
in
it.
Are
we
the
one.
S
Well,
there's
actually
there's
only
about
200
plans.
Okay
and
I
do
think
you're
either
number
one
or
number
two
yeah.
R
S
R
S
B
S
Put
that
numerically,
it
may
make
a
little
bit
more
sense
if,
if
you
had
a,
if
there
was
a
10
loss,
an
actual
loss
on
assets
for
two
plans
and
for
your
plan,
a
10
loss,
I
don't
mean
you
loot.
Your
return
is
a
negative
10.
What
I
mean
it's
a
10
loss
from
your
expected
return,
so
that
would
be
about
a
negative
three
percent
return.
S
What
that
means
is
for
your
plan.
Let's
say
for
San
Jose,
police
and
fire
mix.
I
say
it's
around
10.
The
asset
leverage
ratio
is
10..
What
that
means
is
in
translating
it
into
how
it
impacts
looks
how
it
compares
to
your
payroll.
It
would
be
about
a
hundred
percent
of
payroll
that
loss
would
equate
to
about
a
hundred
percent
of
your
payroll.
S
However,
looking
at
a
less
volatile
plan,
like
the
the
meeting,
is
around
six
for
the
asset
leverage
ratio
for
these
National
systems
that
same
10
actual
loss
would
only
equate
to
a
sixty
percent
of
their
of
the
payroll.
So
it
just
it's
just
dramatically
different
for
especially
police
and
fire,
where
we're
looking
at
asset
leverage
ratios
over
15..
S
So
I'll
give
it
more
examples
on
the
next
slide
of
what
that
means
to
your
contribution
rates.
But
then,
before
we
do,
that
I
just
want
to
touch
base
on
the
liability,
leverage
ratio
and
this
again
measures
the
sensitivity
of
changes
in
the
plan's
liability
and
what
that
means
typically
is
changes
in
your
actual
assumptions
and
most
notably
changes
in
your
discount
rate.
So
you
are
above
20
on
your
liability
leverage
ratio
just
again
off
the
charts
sensitive
to
those
types
of
changes.
C
Go
on
by
the
way,
I
learned
every
time,
I've
heard
your
presentation,
I
learned
so
much
better
than
you
guys.
So
sorry,
if
I'm
repeating
some
of
this,
but
the
asset
leverage
ratio
is
it's
obviously
shockingly
large
for
us
right
so
is
that
it
it's
I,
guess
intuitively.
It
seems
surprising
to
me
that
it
let
me
take.
Let
me
take
a
step
back,
so
is
that
correlated
to
the
the
maturity
of
the
plan
or
the
fact
that
we
have
so
many
fewer
active
members?
C
S
Okay,
so
well
part
of
that
is,
is
exactly
what
you
said:
it's
because
of
that,
that
drop
that
we
had
in
the
active
membership
and
we've
it's
never
regained
you're
still
at
about
1700
employees
compared
to
what
you
were
10
years
ago,
but
at
the
same
time
your
retirees
and
inactive
membership
has
doubled,
and
so
it's
it's
also
positive
too.
Your
assets
have
grown
right.
The
the
the
indicator
is
assets
over
payroll,
so
your
assets
have
also
grown,
but
your
payroll
in
comparison
has
shrunk
or
has
declined.
S
So
that's
why
you're
getting
those
large
you
know
part
of
why
you
have
such
a
large
asset
leverage
ratio
and
again
it's
not
necessarily
a
bad
thing.
If
your
plan
were
a
hundred
percent
funded,
that
ratio
would
go
up
even
more
right,
because
you'd
have
even
more
assets
in
the
plan.
S
So
I
I
do
think
that
that
that
lack
of
recovery
in
your
active
member
population
is
is
really
what
is
driving
a
lot
of
this
and.
R
Let
me
just
add:
we,
the
sensitivity
goes
both
directions.
Yes,
we
used
as
the
example
of
10
loss,
but
a
10
gain
where
you
got
a
16
and
5
8
return
would
reduce
your
ual
by
a
hundred
percent
of
payroll
and
and
so
your
contribution
rates
would
drop
more
quickly
than
other
plants,
and
so
that
that's
part
of
what
we've,
what
we
saw
last
year
was
with
those
great
returns.
R
C
S
Well,
it's
right,
it's
they're,
less
mature,
but
it's
also
given
the
the
assets
that
you
do
have
in
the
plan.
Your
plan
is
close
to.
80
funded
Which
is
higher
than
the
national
average
as
well.
So
the
higher
your
okay,
your
funding,
is
also
you're,
more
sensitive,
okay,
fine,
take.
U
R
Calpers
is
straight
is
one
of
the
200
plants,
and
so
it's
viewed
in
aggregate.
V
Harvey
question:
oh
hi,
Bill
thanks
yeah,
so
this
is,
you
know
striking.
What's
on
these
this
slide
and
so
I'm
wondering
how
should
the
board
be
informed
or
how
should
this
inform
the
board's
decision
making
translate
this
for
the
board
as
to
what
it
means
in
terms
of
how
the
board
goes
forward
in
making
decisions,
whether
Actuarial
decisions
or
investment
decisions?
V
S
Should
they
care
so
I
can
start
to
answer
that
question
and
I
think
that
these
graphs
have
been
presented
to
the
board,
for
the
last
at
least
five
to
ten
five
years,
and
definitely
a
lot
of
the
board's
investment
choices
and
decisions
have
been
driven
by
the
fact
that
they
know
that
they're
very
sensitive
to
investment
volatility.
And
there
was
a
discussion
earlier
today
where
they
were
talking
about
decreasing
the
volatility
or
decreasing
their
beta,
but
trying
to
increase
their
Alpha
to
mitigate
that
risk.
R
Yeah
I
think
it
led
to
the
whole
study
by
varus
about
how
much
risk
could
could
this
system
afford,
because
these
metrics
these.
F
R
Are
just
based
on
the
plan
and
don't
look
at
sponsors,
balance
sheet
or
financial
worthiness
at
all,
so
they're,
just
based
on
on
the
system
and
so
varus
took
it
to
that
next
level
to
assess
what
levels
of
risk
would
be
appropriate
for
the
plan
and
I
think
and
if
you
go
through
the
next
slide
here,
yeah.
B
Let
me
just
example
that
for
our
new
members,
so
we
did
this
with
Bill
and
Anne's
helping
bear
herself
through
four
years
ago,
and
we
did
the
classic
thing
where
we
said.
Well,
let's
do
this
in
two
steps.
Bill
alluded
to
this
first
grading
on
a
curve
we
are
riskier
than
others.
Therefore,
we
should
have
a
lower
discount
rate,
a
lower
actual
portfolio,
a
less
risky
portfolio,
and
this
Bill
said
that
we
said
embarrassed
okay.
Well,
how
much
less
and
that's
where
Vera
said
to
us.
B
S
Okay,
so
this
slide
puts
what
we
were
talking
about
on
the
previous
slide
into
actual
numbers
for
for
the
city
and
for
the
pension
plan.
On
the
left
hand,
side
we're
looking
at
the
impact
of
a
discount
rate
change
which
changes
the
liabilities
would
have
on
this
on
the
contribution
rates,
on
the
left
hand,
side
we're
showing
the
current
2022
valuation
contribution
of
76.5
percent.
S
S
I,
don't
know
that
any
system
who's
ever
decreased
their
discount
rate
by
100
basis
points,
but
it's
just
showing
what
would
happen
to
the
contribution,
and
it's
also
interesting
to
note
here
that
every
component
of
the
contributions
increases
you
have
increases
in
your
normal
cost
rate.
You
have
increases
in
your
ual
and
also
importantly,
when
you
change
your
discount
rate,
the
members
rates
also
change
because
they're
paying
a
percentage
of
the
normal
cost
rate.
S
So
you
see
increases
in
the
member
rate
as
well,
then,
on
the
right
hand,
side
this
is
showing
the
volatility
of
investment
changes
and
what
we're
looking
at
here
on
the
left,
the
very
left
side
of
the
grid
is
the
total
City
contribution
rate
for
the
2022
evaluation
at
76.5
for
next
year.
S
If
the
plan
achieves
at
6.625
return,
we're
expecting
that
rate
to
fall
just
a
little
bit
but
to
74
percent,
but
if
there
was
a
significant
event,
a
two
standard
deviation
event:
a
loss
on
the
assets
which,
for
your
plan,
would
be
about
a
negative
20
rate
of
return.
The
contribution
rate
for
the
city
would
increase
by
almost
18
percent.
Now,
what's
different
than
the
discount
rate
impact
is
that
all
of
the
investment
loss
is
a
ual
driver.
It
only
affects
the
unfunded
accrued
liability.
It
doesn't
impact
the
normal
cost
rate.
S
So
you
see,
all
of
that
is
being
that
increases
on
the
interest
on
the
ual
and
then
the
ual
principle.
S
So
to
know
to
the
difference
between
these
two
graphs
is
that,
as
you
know,
with
the
investment
returns,
those
are
phased
in
over
a
five-year
period.
For
your
based
on
your
actual
smoothing
method
and
the
impact
of
your
discount
rates
are
immediate,
so
there
is
only
a
20
of
that
loss
that
we're
talking
about
this
two
standard
deviation
loss
on
the
right
hand.
Side
is
only
record.
S
Only
20
is
recognized
in
these
numbers
so
that
you
would
see
consistent
increases
as
well
for
the
next
four
years
for
a
loss
that
size
and
again,
these
are
extreme
events
they're
only
to
really
illustrate
the
impact
so
that
you
can
kind
of
really
see
the
magnitude
of
these
of
what
happens
to
the
change
in
the
contributions.
R
I
just
want
to
emphasize
that
this
jump
from
74.2
to
92.6
is
with
the
asset
smoothing,
and
so
you
would
expect
more
jumps
in
the
subsequent
years
due
to
that
investment
loss
depending
on
what
investment
returns
were
after
that.
So
even
with
the
smoothing,
that's
an
18
percent
of
payroll
increase
in
the
city's
contribution,
which
would
be
quite
significant.
R
So
going
forward
here,
we
we
also
do
our
stochastic
projections
so
that
we
do
10,
000
Trials
of
investment
returns
and
calculate
what
the
the
contribution
rates
would
be
and
they're
graphed
and
they.
B
Grow
real
quickly,
that's
historical
returns,
or
do
you
also
include
some
forecast
returns
from
varus
or
Makita.
R
These
are
forecasted
based
on
makita's
Capital
Market
assumptions,
so
we
use
the
assumed
return
as
the
expected
return
and
the
standard
deviation
of
13.3
percent
to
forecast
these
returns.
R
The
darker
areas
are
the
more
common
results,
as
it
spreads
out
to
the
lighter
areas.
Those
are
less
common,
but
the
constant
refrain
we've
had
here
is
is
that
even
out
like
five
years,
the
range
of
your
contribution
rates
is
extremely
wide
from
somewhere
around
20
percent
to
a
hundred
and
twenty
percent
of
payroll,
depending
on
whether
you
have
good
returns
or
bad
returns.
R
There
is
definitely,
after
the
the
next
five
years
that
strong
downward
Trend.
That
Anne
was
talking
about,
and
that's
just
because
of
the
fixed
nature
of
our
amortization
schedule,
but
there's
a
range
of
outcomes
around
that,
so
contribution
rates
could
remain
remain
quite
high
or
even
higher
than
they
are
now.
R
Here
we
we're
showing
the
same
stochastic
projections
but
as
dollar
amounts
and
split
between
tier
one
and
tier
two,
and
and
we
put
them
on
the
same
scale
so
that
you
can
compare
them,
and
you
can
see
that
it's
all
about
tier
one
tier
two.
We
we've
talked
about
the
maturity
of
the
plan,
but
tier
two
is
very
immature.
R
It's
very
young
and
growing,
and
so
it's
very
difficult
to
get
huge
swings
in
the
contribution
amounts
for
it,
because
because
it's
so
small
right
now
the
liabilities
are,
are
just
building
no
retirees
right
now.
So
the
all
of
the
risk
and
volatility
and
size
is
still
in
the
tier
one
plan
and
projections.
R
In
addition
to
contribution
rates
there,
the
ual
fluctuates
significantly
and
that
there
is
this.
A
negative
number
here
is
a
surplus.
That
means
you're
greater
than
a
hundred
percent
funded.
The
positive
is
the
higher
uals
we
show.
R
The
projection
is
for
it
to
steadily
decline,
to
get
down
to
to
zero,
but
there's
a
huge
range
around
that,
based
on
investment
returns
on
the
right
hand,
side
we're
showing
the
the
probability
where
we
are
now
being
funded,
80
or
higher
in
the
blue
bars
or
a
hundred
percent
are
higher
in
the
green
bars.
So
last
year
there
was
a
lot
higher
probability
of
reaching
a
hundred
percent
funded,
but
there's
still
a
probability,
a
small
one
of
reaching
it
in
a
short
period
of
time
out
at
2036.
B
So
so
Bill,
you
said
in
the
past
and
and
I've
read
in
literature
that
your
peers
agreed
to
that
your
turn
really
isn't
a
hundred
percent
funded
your
Target's
somewhere
in
the
90s
and
they
sort
of
say
well,
good
enough
and
and
the
rest
is
kind
of
slop.
If,
if
that's
true,
then
this
says
we
should
get
to
that
Target
sometime
around
2028.
My
reading,
this
right.
R
So
I
don't
think
we'd
say
that
your
target
is
really
90.
It's
as
you
approach,
90,
plus
and
100.
There
are
different
issues
to
think
about
in
terms
of
how
you
fund
and
invest
the
plan.
This
chart
assumes
you
make
no
changes
at
all
and
clearly,
if
we
were
on
the
track
towards
creating
an
eight
billion
dollar
Surplus,
we
would
be
making
some
changes
there.
R
There's
Less
Reason
to
take
investment
risk
if
we
are
more
than
a
hundred
percent
funded
and
so
we'd
start
looking
at
different
Alternatives
and
different
ways
of
approaching
it,
whether
that's
matching
some
of
our
liabilities
or
switching
to
more
fixed
income
or
whatnot
we'd,
have
to
go
through
a
whole
analysis
to
figure
out
exactly
what
to
do.
R
But
that's
what
we
were
talking
about.
It's
that
whole
dynamic
we've
been
focused
on
getting
up
there,
and
so
the
investment
returns
needed
and
the
contributions
needed
to
get
up.
There
are
a
different
approach
than
trying
to
stay
there.
Once
we've
arrived.
B
And
so
that's
a
really
New
Concept
right,
because
we
go
back
15
or
16
charts.
You
showed
the
historical
Universe
of
percent
fundraisio
and
and
back
in
20045.
There
were
plenty
of
plans
that
were
100
plus,
but
they
did
we
were
and
we
did
any
risk
when
I
stepped
into
this
stupid
plan.
I
think
our
discount
rate
was
still
eight
percent.
R
Yeah,
that's
right
and
there's
been
a
lot
of
learnings
from
what
we
went
through
in
that
time
period
and
I'm
working
with
a
group
at
the
Academy
of
actuaries,
we're
about
to
publish
an
issue
brief
on
a
surplus
and
what
to
consider
because
the
experience
was
plans
did
two
things:
one:
they
improved
benefits
and
two.
R
They
reduced
contributions,
sometimes
all
the
way
to
zero,
and
it
proved
very
difficult
to
increase
those
contributions
from
zero
to
get
them
back
up
when
when
the
market
turned
and
the
sometimes
the
benefits
that
were
improved.
Sometimes
you
need
to
improve
the
benefits,
but
sometimes
those
benefit
improvements
proved
very
costly
because
you
cannot
reverse
them
once
you've
granted.
Those
benefit
improvements,
so
I
think
our
our
issue
brief
talks
about
being
cautious
about
both
reducing
contributions.
R
Too
far,
you've
put
in
a
floor
at
or
the
city
put
in
a
floor
at
normal
cost
so
that
we
will
at
least
keep
a
budget
item
for
it
and
and
really
doing
some
analysis
on
on
benefit
improvements,
but
putting
perhaps
at
the
top
of
the
list,
considering
reducing
the
risks
that
the
plan
is
taking
and
using
the
Surplus.
Any
surplus
to
help
mitigate
those
risks.
B
R
So
those
stochastic
charts,
we
know,
are
kind
of
hard
to
absorb
for
a
lot
of
people,
and
so
we
wanted
to
illustrate
a
couple
scenarios
for
you,
and
so
we
just
created
some
positive
and
negative
scenarios,
a
one-year
shock
scenario
where
we
basically
take
the
fifth
percentile
and
95th
percentile
returns
from
the
distribution
over
a
one
year
period,
oops
and
then
for
a
five-year
scenario.
We
take
the
25th
and
75th
percentile
returns
and
just
assume
those
roll
out.
So
these
are
obviously
not
realistic
scenarios.
R
They're
not
intended
to
be
realistic
economic
scenarios,
but
to
give
you
a
sense
of
how
the
asset
smoothing
and
different
policy
methods
play
out
and
the
volatility
of
contributions
under
those
scenarios.
R
So
if
we
look
at
that
on
the
left,
we
have
the
city's
aggregate
contribution
rates
and
you
can
see
that
that
one-year
shock
not
unlike
Ann's
chart
showing
the
one
year.
Minus
20
return,
sends
contributions
up
quite
significantly
before
they
start
coming
down
and
and
the
positive
shock
sends
the
contributions
plummeting
very
quickly
compared
to
the
Baseline
and
those
five-year
moderate
scenarios
still
have
a
pretty
significant
effect
on
contributions.
R
R
You
a
sense
of
that
that
volatility,
the
difference
in
that
one-year
shock
a
Peak
return
or
Peak
contribution
rate
over
a
hundred
percent
of
pay
or
if
it
went
the
other
way,
dropping
all
the
way
to
forty
percent
of
pay,
cutting
the
contribution
in
half
in
just
a
few
years
in
five
years,
and
so
you
see
similar
things
here
now.
We
also
show
the
impact
on
tier
two
member
contribution
rates.
R
The
city
pays
the
same
rate
as
the
member
for
tier
two
that
and
they're
splitting
the
ual
cost
before
you
freak
out
by
how
wide
the
the
lines
are.
Please
know
that
we
blew
up
the
y-axis
here
so,
while
on
the
left,
these
range
from
about
15
percent
are
paid
over
100
percent
of
pay.
Here,
we're
talking
about
a
range
from
14
and
a
half
to
16
and
a
quarter.
So
it's
a
very
narrow
range
by
comparison,
but
there
is
still
volatility
on
the
the
member
contribution
side.
R
R
R
So
we
we
are
not
seeing
the
risk
of
significant
changes
in
tier
two
member
contribution
rates.
Yet
that's
something
that
will
evolve
over
time
as
tier
two
gets
more
mature.
R
Foreign,
the
final
thing
we
wanted
to
leave
you
with
is
just
a
tool
so
that
you
can
refer
to
this
based
on
what
investment
returns
are
during
the
year
to
get
a
sense
of
what
would
happen
to
the
next
year's
contributions
so
that
the
blue
line
on
the
left
is
the
the
fiscal
year.
R
2024
City
contribution
and
or
city
rate
on
the
right
hand,
side
and
the
green
line
is
what
the
following
year,
the
2025
contribution,
would
be
under
investment
returns
that
are
shown
on
the
x-axis
from
-15
to
plus
30
percent.
R
R
In
fact,
as
long
as
we
get
a
return
better
than
minus
one
percent,
we'd
expect
the
city
contribution
rate
to
go
down,
but
you
can
see
if
you
got.
If
you
had
the
minus
15
return,
the
city's
contribution
rate
would
shoot
up
to
about
84
and
234
million.
On
the
flip
side,
if
you
got
a
30
return,
the
city's
contribution
would
drop
to
188
million
or
about
67
percent
of
payroll.
So
it
gives
you
a
sense
what
happens
in
that
one
year
and
where
the
contributions
are
going.
J
Question
yeah
hi
Bill:
this
is
Howard.
Thank
you
and
Ann.
For
the
this
is
a
very
useful
presentation.
As
usual
I
just
the
question
you
I
had
a
question
about
the
74.2
percent.
Is
that
based
on
the
prior
slides
Baseline,
or
is
that
just
a
decreasing
increasing
return
calculation.
R
J
Yeah,
okay,
okay,
all
right
great
and
then
the
other
question
I
had
was
in
the
report.
Maybe
this
is
more
general
question
on
the
report
on
page
12.
It
talks
about
The,
three
principal
risks,
investment
risk,
interest
rate
risk
and
assumption
change.
Risk
I
mean
I.
We've
seen
the
the
impact
of
a
dramatic
change
in
discount
rate,
but
at
this
point
in
time,
is
there
one
risk
that's
greater
than
the
other
among
the
three.
R
I
think
the
one
we
are
definitely
affected
with
each
year
is
investment
returns,
but
one
thing
we
talked
about
with
when
we
set
the
assumptions
is
with
the
rise
in
interest
rates.
It's
really
changed,
Capital
Market
assumptions,
and
so
that
risk
could
really
work
in
our
our
favor.
R
If
those
interest
rates
remain
at
a
higher
higher
levels,
but
you
know
I
think
we
have
the
the
ongoing
risk
longer
term
that
those
interest
rates
come
back
down
and
affect
our
Capital
Market
assumptions
that
way,
I
don't
see
other
than
the
the
discount
rate
and
I'll
let
and
time
in.
If
she
sees
something
else
other
than
the
discount
rate
I,
don't
see
significant
assumption
change
risks
out
there.
The
there's
been
a
lot
of
talk
about
mortality,
especially
with
covid,
and
whether
what
that
long-term
impact
is.
R
S
And
yeah
I'll
piggyback
on
that
bill
with
other
assumptions
like
retirements
and
terminations,
there
was
so
much
volatility
during
covid
with
with
retirements
and
people,
leaving
the
systems
and
I've
done
a
few
experience
studies
in
the
last
couple
months
here,
and
even
with
those
dramatic
changes
they
didn't,
you
know
they
didn't
really
impact.
S
If
you
look
at
the
last
six
years,
they
didn't
really
impact
the
trends
over
the
last
six
to
nine
years,
so
and
and
even
when
you're
looking
at
what
happened
in
each
valuation,
looking
at
the
gains
and
losses
of
more
terminations
or
less
or
more
retirements
in
one
year,
significant
fluctuations
in
those
didn't
impact
the
liabilities
that
much
in
comparison
to
what
your
investment
returns
look
like,
so
that
assumption
risk
I,
think
because
we
can
really
hone
in
on
those
assumptions
and
those
liability
losses
from
those
are
very
organs
are
just
very
minimal
in
comparison,
so
that
risk
is
there,
but
it's
just
very
small
compared.
R
I
think
the
the
one
that
we
are
watching
shorter
term
are
salary
increases
because
of
inflation
and
that
that
could
have
an
effect,
but
it
it's
so
tied
to
the
higher
interest
rates,
which
are
also
linked
not
directly
but
but
linked
to
inflation.
So
those
I
view
those
more
as
as
offsetting.
V
Yeah
thanks
Bill,
just
one
quick
question
of
the
board
on
slide
12.
That's
the
leverage
ratios
business.
If
you
could
look
back
for
that,
so.
V
There
we
go
so
these
leverage
ratios,
which
means
take
some
time
to
go
through
and
I-
thank
you
for
that
are
based
on
active
payroll
and
I'm,
wondering
whether
it
might
be
informative
to
the
board
to
split
active
payroll
into
active
tier
one
payroll
and
active
tier
two
payroll
and
see
how
the
ratios
work.
You
know
as
if
they
were
for
illustrious
purpose
and
that
they
were
two
separate
plans.
You
know
the
liabilities.
V
What
would
be
the
ratios
on
the
live
liability
leverage,
particularly
if
it
was
just
based
on
the
liabilities
of
tier
one
and
the
payroll
of
tier
one,
since
we
know
that
tier
two
has
you
know
no
unfunded
liability
at
all,
but
would
that
be
useful?
You
think
for
the
board
to
to,
in
terms
of
risk
analysis
to
I,
guess
the
I
deposit,
the
issue
might
be:
can
we
take
more
or
less
risk
with
our
assets
if
we
know
that
they
relate
more
or
less
to
tier
one
liabilities
and
tier
one
payroll?
R
Some
difference
there
between
tier
one
and
tier
two
that
might
be
informative
to
the
board
it.
There
is
a
big
difference
there
and
so
teasing
them.
Apart
is
useful
for
understanding
that
difference
and
and
seeing
the
you
know,
the
tier
two
is
not
sensitive
and
tier
one.
It
is
extremely
sensitive.
R
R
It's
really
can
the
city
afford
the
whole
package
and
what's
the
impact
on
our
contribution
rates
for
the
the
whole
package
and
that
that
sensitivity,
so
so
so
there
can
be
uses
for
both
I
think
here
and
particularly
if,
when
I
talk
about
this
more
broadly,
they
talk
about
payroll
being
a
proxy
for
the
sponsors
revenues
and
when
you're
dealing
with
large
State
plans
that
have
a
whole
bunch
of
different
employers
who
can't
track
down
exactly
what
revenues
are.
R
R
V
R
Right,
I
think
that
there
is
over
time
there
is
a
significant
question
about
how
tier
two
should
be
funded,
how
the
investment
should
work
for
tier
two
versus
tier
one,
and
those
Dynamics
are
going
to
change
over
time
as
tier
one
gets
more
and
more
mature
and
really
functions
as
a
closed
tier.
That
Dynamic
is
going
to
change
for
tier
one.
R
Similarly
for
tier
two
as
it
gets
more
mature
and
you
have
to
balance
those
risks
because
the
employees
are
going
to
pay
a
portion
of
the
the
cost
of
any
losses.
I
I
think
that
Dynamic
is
going
to
change.
So
it
is
an
important
question
to
keep
an
eye
on
we're
just
very
early
in
that
transition
in
terms
of
making
any
any
decisions
on
it.
B
So
let
me
answer
that
differently:
Harvey
I'm
sure
you'll
agree
bill.
B
So
if
you
hand
me
100
bucks
and
tell
me,
throw
it
two
questions:
how
long
now
and
along
the
way
do
I
need
to
do
anything
with
it
and
if
you
say
50
years
and
you
don't
need
to
do
anything
with
it,
I'm
just
in
the
stock
market,
I
will
stick
it
in
the
riskiest
asset
class,
because
over
50
years
the
market
is
always
the
best,
the
Tiano
Drew
15
years
and
every
second
and
third
year,
I'm
gonna
come
to
you
and
ask
for
10
of
it.
B
Then
the
individual
volatility
per
year
matters
right,
Harvey.
You
know
it's
up
three
percent
down
one
percent
up
five
percent
down
two
percent
yeah
I'm
in
trouble
and
down
two
percent
year,
but
it's
up
if
it
if
it
seesaw's
like
that
for
50
years,
it's
up
20
percent
right
bill.
That's
part
of
Harvey's
answer
too.
R
Yeah
I,
I,
guess
I
think
it
comes
down
to
to
this
chart.
You
know
if,
if
tier
two
had
had
the
width
of
tier
one
we'd
have
serious
problems,
so
we
would
really
want
to
look
at
it
long
before
we
get
to
the
position
where,
where
tier
one
is
in
terms
of
that
range
of
potential
contribution
amounts
but
give
given
where
we
are.
That
range
is
really
very
tiny,
even
out
15
16
years.
R
So
it's
something
that
we
probably
don't
have
to
address
directly
for
another
10
years,
but
we
will
need
to
address
it.
And-
and
so
the
question
is
at
what
point
do
we
start
addressing
it
and
consider
changes
I?
Think
when
we've
looked
at
it
now,
the
the
issues
with
tier
one
just
overwhelm
the
whole
discussion
and
that's
really
where
the
the
focus
needs
to
be
right
now
is
I'm
managing
tier
one.
We
have.
We
have
time
to
to
address
tier
two
and
we'll
see
how
that
that
evolves.
B
Well,
and
so
now
you
recall
on
this
chart:
I
asked
Bill
question:
what
was
he
using
as
his
base
data
for
the
Monte,
Carlo
analysis
and
so
bill
turned
to
you
and
said
well:
I
use
post-depression
actual
historicals
you'd
see
a
very,
very
different
chart
here
right
bill.
You
are
not
sequencing.
The
Monte
Carlo
draws
you
are
randomly
drawing
per
year,
but
of
course
that's
not
right
either,
because
Market
is
right,
so
it
deeply
matters.
What
data
you're
using
and
whether
you're
using
individual
year
draws
or
decadal
or
even
quad
Century
draws.
R
But
yeah
you're
planning
to
we're
using
individual
year
draws
so
they're.
R
Or
with
forward
forecasts,
and
so
if
anything,
we
should
be
showing
a
wider
distribution
than
more
sophisticated
models
would
and
but
I
think
the
difference
over
short
time
periods
is,
is
not
significant.
It's
when
you
look
out
20
30
years,
you
start
seeing
some
significant
differences.
V
On
the
head
count
issue
or
when
we,
when
it
is
right
for
this
Lord
to
start
thinking
about
the
future
of
tier
two,
my
understanding
is:
is
that
we're
up
to
about
40
percent
of
acting
payroll
is
now
tier.
Two,
so
I'm
wondering
you
know
I'm
just
putting
out
there.
The
thought
that
maybe
some
early
planning,
as
you
would
say,
for
your
child
or
at
college,
might
be
worth
the
board's
attention.
Sooner
than
later,.
B
Yeah,
that's
a
good
point
Harvey!
You
know.
If,
if
I
do
with
my
own
kids,
you
know
the
six
months
old
stick
in
the
stock
market.
They're
not
gonna,
need
it
for
18
years.
But
as
you
say,
it's
it's
as
we
look
at
that
population
and
say
you
know
the
first
of
these
tier
two
guys
they're
going
to
start
retiring
in
five
years.
B
Right,
then,
all
of
a
sudden
we,
we
Crank
that
back,
which
is
actually
what
I
did
with
my
kids
portfolio
until
appointment
when
they
got
in
college
I
was
sitting
in
immunity,
bonds
right
because
they're
going
to
need
next
year,
so
yeah
breast
of
Trustees,
you
don't
know
Monte
Carlo
anything
else.
It's
inside
baseball,
Shakespeare
famously
said
in
Hamlet
that
some
must
watch
while
some
asleep
just
to
let
you
know
at
least
one
of
us
is
what
is
on
the
Watchtower
watching.
That's
kind
of
all.
You
need
to
know.
R
So
Harvey's,
right
that
about
40
of
the
active
payroll
is,
is
tier
two.
The
flip
side
of
that
is
the
liabilities
only
about
100
million
compared
to
5.6
billion.
So
it
is
a
timing
question
of
when
you
start
to
address
it.
We've
got.
A
R
Of
the
payroll,
but
they
all
have
very
short,
Service,
very
low
liabilities
that
are
deferred
into
the
future,
so
it
it
is
sort
of
that
that
timing
question
of
when,
when
you
start
addressing
it,
but
right
for
the
next
several
years.
The
big
issue
is
managing
tier
one.
B
D
B
Right
so,
based
on
that,
we've
got
about
two
decades
more
before
the
front
end
of
the
wave
of
actually
paying
out
starts
to
hit
and
Harvey
If.
You
were
to
do
a
Monte
Carlo
simulation
based
on
actual
what
you
would
do,
my
ecology,
here's
actual
historical
data,
legit
returns
over
20
years,
starting
in
46,
47,
1948,
1949.,.
B
Those
returns
are
all
positive
and
the
riskier
you
set
the
dial,
the
higher
the
median
return,
and
it's
never
negative
right
and
it
may
you
know
the
stupid
thing.
Improvements
Harvey's,
if
you
it
matters
deeply
with
the
first
year,
is
55.
It's
the
first
Year's
in
a
recession.
It
matters
deeply
the
20-year
return
and
in
the
first
couple
years
during
the
boom,
I
mean
it'll
end
up
over
20
years,
like
doubling
what
you
get
so
but
you're
right,
Harvey
to
me,
we,
you
know,
that's
a
good
point.
Bill,
let's
put
on
our
our
thinking.
B
Caps
for
future
meeting
have
a
brief
discussion
to
send
to
Future
boards
in
a
time
capsule.
This
is
the
year
you
ought
to
wake
up
and
start
looking
at
this.
C
C
C
I'm
not
trying
to
oversimplify
this
but
I
as
a
as
a
trustee
I'm
trying
to
do
a
take
away
from
this
life.
So
are
we
essentially
seeing
that
the
probability
of
getting
to
100
funding
you
know
is
over
the
next
I?
Don't
know
the
like,
like
Drew,
said
over
perhaps
my
foreseeable
term.
T
C
This
board
is,
is
really
low,
and
so
we're
essentially
are
to
get
to
an
80
Target.
Our
main.
C
Risk
right
because
our
asset
allocation
is
I,
mean
I'm
just
trying
to
see
how
how
do
I
take
this
and
say
this
is
we
should
do
better
on
or
we
can
get
increase.
The
probability
of
getting
to
80
percent
by
taking
more
risk.
Is
that
the
lever
to
move
so.
B
So
let
me
pick
up
the
front
end
of
the
scene.
So,
when
I
see
this
chart,
I
see
that
the
probability
of
getting
you
100
is
50,
which
is
what
we
want,
because
half
the
time
I'll
overshoot
and
be
105,
funded
and
half
time
on
to
shoot
right.
Bill
your
target
is
to
get
us
to
100
funded,
not
105
or
95
right.
R
R
Faster
you
either
have
to
get
better
investment
returns
or
contribute
more
or
you
know
the
other
thing
that
would
get
us
there
faster
is.
If
we
change
our,
if
we
increase
the
discount
rate,
but
that's
just
assuming,
we
can
get
better
investment
returns,
so
these
are
assuming
six
and
five
eighths
as
the
the
median
return.
B
Let
me
jump
on
top
of
your
questions,
see
so
all
right,
Bill
and
put
your
thinking
caps
on
and
put
you
on
the
spot.
So
let's
say
90
is
a
good
Target
I
want
the
one
Sigma
70
65,
probably
of
hitting
it.
What
does
this
chart
do?
Bill
if
I
crank
my
discount
rate
up
to
seven
percent
and
my
actual
returns
to
match
that?
Can
you
roughly
guess
off
top
of
your
head?
Does
that
give
us
a
one
Sigma
chance
of
getting
to
90
on
2036.
R
So
there's
there's:
if
we
change
the
discount
rate
to
seven
percent,
it
would
immediately
increase
our
funded
ratio
to
about
84
from
78..
So
so
that
part
helps.
But
then
our
funding
mechanism
would
reduce
contributions
as
well.
So
you
know,
if
you
looked
out
at
2036,
you'd
still
see
the
50
50..
What
you'd
see
different
is
in
the
intervening
years.
It
would
be
a
higher
probability.
B
B
B
Well,
yeah
and
we're
gonna
get
in
a
a
real
Donnie,
Brook,
UNM
and
I,
and
the
board
when
we
talk
about
I'm,
adding
Alpha
to
our
discount
rate
Bill's
already.
Let
us
know
that
actuaries
have
a
serious
heartburn
issue,
including
Alpha
in
discount
rate,
which
you
should
Bill.
However,
our
job
is
to
prove
to
you
that
our
formula
generates
consistent,
sustainable,
profitable
Alpha,
which
we
can
do
assuming
we
can
maintain
our
current
staff
and
Prabhu,
which
is
why
we're
going
after
incentive
compensation
so
as
soon
as
you're
everything
it's
very
holistic.
B
All
of
this
ties
together
right
this
whole
thing.
You
know
this
goes
back
to
audit
you
guys
it
goes
back
to
investment
committee.
It
goes
back
to
JPC
right
if
our
goal
and
well
the
actors
say,
look
we're
setting
all
the
knobs,
so
you
get
to
you,
know:
50
cents
skip
to
100
in
some
smoothing
period,
15
years
right.
B
Our
job
is
well
as
bill
says.
Okay,
how
do
we
turn
the
the
sub
knobs
along
the
way
to
make
that
Journey,
more
probable
and
easier
for
the
city
easier
for
us?
These
are
for
the
city.
Is
that
fair
to
say,
Bill.
B
R
B
Do
I
have
a
motion
that
we
will
accept
this
report
so.
B
I
have
a
second
by
Sunita:
let's
go
around
Andrew
hi
David
Quan,
hi,
Denita
hi.
D
B
B
Knuckleheads
I
get
this
now
and
that's
because
you
guys
do
such
a
great
job
every
year
of
explaining
it
I
think
as
soon
as
Laughing
she's,
like
I'm,
not
there
yet
too,
but
as
far
as
I
was
last
year,
good
for
you,
so
you
stay
with
it.
You'll
get
there.
It
only
took
me
10
years
on
to
open.
R
All
right,
let
me
bring
the
open
presentation
up.
R
And
for
this
presentation,
I
have
Mike
shining
with
me
to
he's
our
health
care
actuary
to
help
present
the
preliminary
evaluation
results.
So
this
will
be
a
much
shorter
presentation,
much
less
detail.
R
So
just
wanted
to
remind
you,
the
explicit
subsidy
part
of
the
op-ed
plan.
That's
the
the
retiree
Healthcare
premium
subsidy
is
funded
in
a
similar
manner
to
the
pension
plan.
The
difference
one
key
difference
is:
there
are
actually
two
pots
of
money.
There's
a
401
each
account,
that's
in
the
pension
trust
and
that's
where
the
member
contributions
go
and
then
there's
the
115
trust,
which
is
where
the
city
contributions
go.
R
R
So
we
do
manage
across
these
two
different
accounts,
but
otherwise
it's
very
similar
to
the
funding
mechanisms
for
for
the
pension
plan,
our
valuation
setting
contributions
for
fiscal
year
2024,
the
the
other
key
difference
is.
We
only
set
the
contributions
for
the
city.
The
member
contributions
are
fixed
in
the
municipal
code.
R
So
for
police
again,
this
is
a
very
similar
chart
to
what
we
used
on
the
pension,
where
the
the
blue
is
the
liability
for
those
in
Pay
status,
the
red
for
the
active
and
the
gold
for
people
who've,
who
are
no
longer
working
for
the
city
but
are
entitled
to
a
future
benefit
the
we
only
track
the
market
value
of
assets
for
these
plans.
So
there
is
no
Actuarial
value
and
you'll
see
even
based
on
the
market
value.
R
The
funded
ratios
just
dropped
slightly
this
year
from
41
to
about
40
for
police
and
from
38
to
37
for
fire.
The
other
thing
I
want
to
note
is
we've
been
talking
about
the
pension
plan,
where
the
liability
was
5.6
billion.
The
top
of
our
scale
here
is
only
500
million.
So
it's
a
much
smaller
overall
liability.
R
The
contributions
were
projecting
in
the
preliminary
results
for
the
member
contributions
going
down.
That's
mainly
because
the
the
member
population
who's
eligible
for
full
benefits
is
going
down.
The
city
contribution
is
going
up,
but
very
slightly
it's
about
the
same
as
the
prior
year
and.
R
Very
close
to
our
projections,
so,
unlike
the
pension
plan,
these
contributions
are
are
staying
very
close
to
Prior
projections.
R
Okay,
just
looking
at
the
membership,
you
can
see,
we've
had
about
a
nine
percent
drop
in
the
active
members
who
are
eligible
for
full
benefits,
so
only
tier
one
members
who
did
not
elect
to
go
into
the
Viba
get
benefits
under
this
plan.
Those
who
went
who
elected
the
Viva
and
new
members
are
eligible
for
a
catastrophic
disability
benefit,
but
it
is
a
substantially
smaller
benefit.
R
So
here
the
active
members
are
that
are
eligible
for
the
large
benefit
are
declining
and
so
we're
shifting
to
a
more
and
more
mature
system
with
numbers
and
pay
stacks.
A
R
The
detailed
numbers
behind
those
charts,
I
think
the
the
thing
I
wanted
to
point
out
on
this
chart
that
you
couldn't
really
see
on
the
original
chart
without
the
numbers
is
how
close
the
unfunded
Actuarial
liability
is
from
last
year
to
this
year.
It's
about
259
million
for
the
police
department
and
about
158
million
for
the
fire
department
and
there's
been
very
little
change
in
the
last
year.
R
So
it's
it's
really
due
to
the
liabilities,
went
down
as
the
investment
returns
went
down
and
so
I'll
turn
it
to
Mike
he'll
go
through
that
in
more
detail.
W
So
you
get
over
five
years.
It's
like
we're.
Looking
at
it,
you
know
only
a
6.7
million
dollar
increase
in
the
UIL
over
a
five-year
period,
and
then
the
next
slide
shows
really
where
your
liability
is
coming
from.
And
then
you
notice
in
the
really
dark
blue
on
the
left
that
almost
half
the
liability
is
due
to
members
actually
in
Pay
status.
W
W
And
then
the
next
page
really
shows
the
contributions
about
the
explicit
which
is
what's
really
being
funded
to
the
trust.
Then,
to
that
implicit
piece,
which
is
the
difference
between
the
premiums
that
are
actually
paid
versus
what
the
expected
claims
are.
And
that
happens,
because
the
premiums
are
Blended
between
the
actives
and
the
retirees,
and
so,
if
you
would
actually
rated
the
retirees
on
their
own,
the
premiums
would
be
much
higher
if
anyone
actually
wants
to
get
an
idea
of
what
that
looks.
W
Like
is
because
now,
under
the
Viva
plan,
you
do
have
members
that
are
actually
starting
to
get
benefits.
The
city
actually
has
negotiated
retiree
only
rates
for
those
members,
and
you
can
see
that
real
difference
play
out
as
to
if
you
rated
them
separately,
you
can
see
how
much
more
expensive
those
premiums
would
be,
but
we
say
that
again
as
Bill
is
saying,
because
this
is
a
closed
group
as
members
retire,
the
amount
of
members
are
actually
contributing
to
the
plan
continues
to
decrease
so
that
contribution
amount
is
actually
down
by
almost
seven
percent.
W
The
city's
contribution
is
actually
up
slightly,
you
know,
basically
less
than
a
percent
or
about
a
percent
for
police
and
about
half
a
percent
for
fire,
and
this
again
last
year
the
total
contributions
developed
are
actually
slightly
above
the
city's
optional
cap
of
14,
and
now
it's
actually
slightly
below
the
cap,
so
that,
while
the
overall
contribution
went
up
by
two
hundred
and
seventeen
thousand
dollars
between
the
two
plans,
the
city
cap
actually
went
up
by
more
than
that.
So
we
kind
of
flipped
the
other
way.
W
So
the
actual
contributions
are
now
below
the
city's
cap
and
then
again
we
see
the
implicit
subsidy
increases
and
we're
going
to
continue
to
see
that
kind
of
on
a
leverage
basis,
because
as
more
and
more
people
retire
and
they
move
from
the
retirement
status
into
being
over
65.
Where
there's
no
more
implicit
subsidy,
then
you've
got
more
and
more
actives
under
the
plan,
so
that
kind
of
tends
to
depress
the
rates
a
little
bit,
which
is
to
the
advantage
of
the
actual
liability
of
the
plan.
W
But
then
it
means
you've
got
less
people
that
are
retirees
under
the
age
of
65.
Therefore,
that
implicit
subsidy
value
continues
to
increase
so
we'll
kind
of
see
that
go
up,
but
that
really
doesn't
impact
anything
other
than
the
financial
reporting
of
the
plan,
since
those
costs
are
actually
funded
every
single
year
by
the
active
premiums.
Anyways
with
that,
we
can
take
any
questions.
B
Q
V
Chairman
we,
this
is
just
for
discussion
purposes;
no
action
by
the
board
at
this
meeting.
D
I'm
sure
all
right
hang
on
Harvey
hang
on
yeah.
D
B
That
all
right,
great
any
final
questions
for
Mike
or
Anne
or
our
friend
bill.
B
So
I'll
Pat
myself
on
the
back
so
part
of
the
reason
this
board
is
lucky
to
have
me-
is
I
VCS.
We
invest
in
a
company
and
maybe
get
our
money
out
in
12
or
13
years.
However,
to
tell
you
this
so
VCS
have
no
problems.
Thinking
yeah,
I
gotta
do
that
in
about
a
decade
right,
so
yeah,
Harvey
great
suggestion,
I
won't
lose
that
throttle
put
in
my
calendar
for
I,
don't
know
20
30
to
bring
it
up
and
I'm
not
kidding.
B
I
will
do
that
and
I
will
bring
it
up
in
2030
if
I'm
still
alive
and
I'm
still
here
so
great
stuff
over
to
you
for
four
e
Roberto.
P
Thank
you,
Mr,
chair
and
again,
thank
you.
Cairo
much
I
appreciate
a
very
good
discussion.
This
is
pretty
straightforward.
We
are
recommending
and
asking
you
bore
approval
to
authorize
the
CEO
to
execute
the
Third
Amendment
of
the
agreement
with
cortex
for
the
cutting
the
year.
2023
cortex
is
still
providing
services
to
your
board.
This
is
for
up
to
an
addition
of
thirty
thousand
dollars
doesn't
mean
that
all
the
funds
have
to
be
expanded,
but.
P
There,
at
the
very
least,
very
much
involved
on
the
current
JPC
discussion
on
various
issues,
including
compensation
incentive
plan
and
also
the
annual
performance
evaluation,
should
the
CEO
and
the
CIO.
So
they
will
continue
working
with
the
board
on
those
annual
performances
reviews,
but
also
you
may
be
called
that
they
work
with
your
board
and
you
by
annual
self-assessment
as
a
board
which
actually
comes
to
your
board
for
2023.
P
So
I
am
recommending
approval
for
this
extension
for
another
12
month
for
Camilla
2023,
for
up
to
30,
000
and
I'm
happy
to
address
any
issues
or
questions.
Q
B
You
know
actually
I
can't
answer
that
maybe
Andrew
they're
driving
this
new
performance
review
process.
We
did
for
the
first
time
this
past
year,
I'm
very,
very
pleased
with
it
and
we're
still
in
the
in
the
part
of
the
cycle
deck
where
they're
designing
it
and
putting
in
a
lot
of
work
to
take
our
feedback
from
the
first
year
am
I
missing.
Something
is
everything
is
coming
from
Roberto.
P
No
I
think
I
think
they
kiss
is
to
an
extent
correct
they're,
not
really
doing
that
much
governance
work
per
se
with
the
governance
committee.
This
word
that
they've
been
performing
lately
is
more
related
to
the
JPC
and
the
annual
performance
reviews
of
the
CEO
and
CIO.
There's
still
some
work
to
be
completed.
There,
I'll
I,
defer
to
trustees
that
are
actually
involved
in
that,
including
the
chair
and
device
share
on
the
work
not
only
for
the
compensation
but
the
actual
annual
review
process.
P
So
they
still
have
to
do
some
work
on
that
and
then
the
second
one
again
is
view
biannual
safe
assessment,
so
they're
not
working
you're,
correct,
they're,
not
doing
work
with
the
governance
committee
anymore,
the
more
working
with
the
JPC
and
other
areas
of
your
board.
So
that's
probably
what
you
have
seen
in
as
much.
The
second
comment
I
was
going
to
make
is
the
130
000
is
cumulative.
P
Dig
is
what
we
asking
is
additional
30
000,
because
the
first
two
Amendments
have
brought
the
total
of
the
contract,
two
hundred
thousand
dollars
that
actually
expires,
December
31st
2022.
This
is
just
for
an
additional
thirty
thousand
dollars
and,
as
I
said,
it
will
be
all
expanded
if
they
provide
such
services.
That
will
require
the
expense
of
the
full
thirty
thousand
dollars,
there's
always
a
chance.
That
is
not
the
case.
Hopefully
that
answered
your
question.
Q
B
Yeah
I
I'd
like
to
see
this
bill
just
speaking
as
a
member
of
the
drum
Personnel
committee,
I
liked
doing
Roberto's
performance
review
along
with
Spencer
the
chair,
Federated
I,
using
the
guidelines
from
cortex
Spencer,
the
sheriff
Federer
is
actually
driving
the
feedback.
Loop
89
was
great
and
better
than
what
we
had
before
and,
of
course,
10
20.
We
need
to
fix
and
she
said,
I'll
take
dick.
B
B
J
No
hey
Roberto,
the
the
the
original
was
a
hundred
thousand
dollars.
It
is
the
additional
not
because
the
scope
of
the
project
increased
during
that
time.
So.
P
P
It
may
have
been
forty
thousand
dollars
and
then
the
first
amendment,
another
thirty,
the
Second
Amendment
another
30.
That
makes
it
200.
this
being.
The
third
amendment
is
another
thirty
thousand
dollar
for
a
total
130.
So
this
is
the
third
amendment
after
the
first
contractor
is
being
ongoing
for
about
four
years.
They
have
been
working
on
various
issues,
although
the
last
couple
of
years
have
been
mostly
on
the
board,
self-assessment
and
helping
the
JPC
develop.
P
The
the
new
annual
review
process
for
the
CEO
and
CIO,
with
the
with
the
metrics.
B
Chair
Lanza
I
vote
I
as
well
Harvey.
What
do
we
do
now,
I'm
on
to
item
4f
for
elections?
What's
the
process
here.
V
Well,
we
at
the
last
meeting
we
had
nominations.
The
nominations
were
closed.
We
have
a
nomination
of
as
I
recall,
chair,
lonza,
to
repeat
as
board
chair
for
next
year
and
I
believe
trustee
Vado
for
vice
chair
I.
Have
that
correctly?
Those
were
the
nominations,
and
so
today
will
be
the
vote
under.
B
The
board
Charter
in
election
policy,
so
the
vote.
The
vote
then
Harvey's,
basically
a
count
of
I
or
nay
right.
That's
correct
and
we'll
take
them
each
one.
At
a
time,
great
I
got
that
that's
what
I
was
telling
all
right.
So
let's
do
me
chair
first,
do
you
want
me
to
stand
for
your
nut
and
your
heady
vote.
B
Heidibo
aye,
thank
you.
Hi
Howard.
N
D
B
Hi
I'm
Charlie,
but
I
we're
going
to
get
together,
Franco
and
compare
corsages
soon.
That's
great
I
guess
Harvey,
you
said:
Maytag
is
burning
for
court
case
over
to
you.
Harvey
for
the
361
show
thank.
V
You
you
have
before
the
board
a
memorandum
explaining
the
current
status
of
the
Governors.
No,
no!
No!
No!
No
declaration
and
the
most
recent
resolution
of
the
city
council
of
November
15th,
again
continuing
the
state
of
emergency
recognition
of
impact
of
the
ability
of
reports
to
get
together.
So
what
I
would
recommend
that
share?
Q
V
B
Dick
is
moved
to
accept
those
two
recommendations.
They'll
have
a
second
Garden.
G
B
B
Man
challenge
I
vote
I,
going
for
about
three
hours;
hey
guys
it's
about
11
35.
Let's
take
a
five
minute:
bio
break
and
we'll
reconvene
at
11
40.
B
A
A
A
A
N
N
A
V
Thank
you,
I
just
wanted
to
add
one
observation
just
for
planning
purposes
under
our
teleconference
rules.
As
you
know,
on
AP
361
has
been
very
useful,
but
it
only
gives
us
latitude
to
to
meet
for
30
days
forward
from
the
date
we
adopted
each
time.
V
The
calendar
this
month
is
today
is
the
first
of
December,
so
that
authorization
that
before
just
voted
on
is
going
to
burn
off
on
December
30th
before
our
next
board
meeting,
and
so
what
that's
going
to
mean
is
that,
sometime
before
New
Year's
we're
going
to
have
to
have
a
very
fast
special
meeting
schedule
to
I?
You
know
re-up
the
ab361
capability
for
another
30
days
after
that
to
be
able
to
extend
into
January
it's
just
a
heads
up
to
everybody.
I'll
leave
that.
B
Up
to
reverse
Auto
and
staff
to
coordinate
with
the
board
when
we
could
have
that
special
teleconference
meeting,
but
just
to
let
you
all
know
that
otherwise
December
will
come
and
go
and
we
will
be
out
of
compliance
and
we'll
be
able
to
meet
in
January
under
under
those
rules.
Thanks
Mr
chairman
you're
welcome
RV.
B
Once
again,
the
Geniuses
that
occupy
our
voted
seats
in
Sacramento
didn't
bother
to
look
at
a
calendar
where
you
could
have
measured
the
difference
between
the
first
Thursday
of
every
month
and
calendar
shoot
the
second
Saturday
and
notice
that
some
of
them
are
less
than
30
days,
and
some
of
them
are
more
than
30
days.
An
RV
smiling.
Is
you
know
what
I'm
saying
so?
We've
had
to
do
this
a
couple
times
with
JPC,
it's
kind
of
stupid.
B
You
schedule
monthly
meetings
and
they
have
to
all
be
sort
of
less
than
monthly
meeting
since
30
days
of
September,
because
you
remember
blah
blah
blah
blah
blah
all
right.
Let's
go
ahead
and,
as
usual
end
of
year,
we've
got
a
very
large
number
of
folks
retiring
and
we've
got
some
real
folks
here,
climbing
up
on
30
years
so
good
for
tomorrow.
Let's
go
here,
we
go.
B
We
got
21
of
these
bear
with
me:
Javier
Acosta
police
officer,
police
department,
effective
December,
10th,
25.23
research,
Thomas
and
Boyle
police,
Lieutenant,
Police,
Department,
effective
December,
22nd
26.76
used
service,
Kevin
L
Irby
fire
captain
fire
department,
Factor
December
11th
26.86
years
Service,
Jonas,
J,
escalera
fire
captain
fire
department
effect,
December
11th,
28.13
years
service
with
reciprocity;
I'll
keep
going.
B
Oh
that's
great
name:
Brett
jeffersoni,
probably
John
like
me,
battalion
chief
well,
Fire
Department
in
fact:
December
11th,
29.1
news
service
with
reciprocity,
Nabil,
Holt,
hi,
Dar,
sorry,
Stark
in
this
room;
police
officer,
police
department,
24th,
25.76
years
service,
John,
C,
Hartman,
police,
Sergeant,
Police
Department.
In
fact:
December
23,
26.3
year
service,
Min,
Lee,
police
officer,
police
department,
defective
December,
23rd,
26.3
year
service,
Alex,
Lee,
fire,
captain,
Fire
Department.
In
fact:
December
11th,
25.36
year
service,
Eric,
J,
Magnuson,
police,
Lieutenant,
Police
Department.
In
fact,
for
December
11th
28.16
year
service
with
reciprocity.
B
Mario,
oh
God,
Murray
why'd,
you
have
to
be
a
Filipino
Mario.
Give
me
a
second
I
should
have
read
these
four
Mario
I
call
you!
Oh,
oh
God,
I
got
it:
okay,
firefighters,
apartment
factors,
I'm,
sorry
about
that;
Mario,
December,
24th,
25
years
service,
Scott,
roshangana,
fire
department,
fire
engineer.
In
fact,
December
27
we've
got
a
spicy
Christopher
J
Singleton
police,
Sergeant,
Police
Department,
the
factory
December
23rd
27.22
year
service,
Craig,
A,
J
star,
lead
police,
sutenant
police
department.
B
In
fact:
December
10
26.73
year,
Service
Glenn
Thompson,
fire
prevention,
inspector
fire
department
and
I'm
effective
December
11
26.81
year,
Service
Richard
G,
Tomlin,
Jr
police,
Sergeant,
Police,
Department,
effective
December,
23rd
29.37
year
service
thanks
thanks
Richard
for
almost
getting
to
30..
That's
awesome,
a
back
t-tran
police
officer,
police
department.
B
In
fact,
December
11th,
with
30.01
year
service,
ran
the
well
for
you
right
now,
back
Eric
mullrich
for
our
engineer
for
an
apartment
effect,
December
25th,
26.69
gear
service,
with
reciprocity,
Michael,
L,
Villanueva,
police
officer,
police
department,
effective
December,
10th,
25.5
users,
William
B,
Wargo,
fire
engineer,
fire
department,
the
factory
December
25th,
I
love
how
half
these
are
effective.
On
Christmas
day
21.1
year,
Service
and
finally,
we
have
Brian
Bryant,
sorry,
Bryant,
Washington
police
officer,
police
department
affected
December,
10
27.18
years
of
service.
That
was
a
lot.
B
Do
you
have
a
motion
to
prove
those
sentence?
Great
throw
a
second
Garden
here,
oh
interesting,
we
don't
have
any
any
anyway
I
just
go
around
Andrew
hi.
B
Q
G
This
is
Gardner
I
just
want
to
say,
congratulations
to
all
the
men
and
women
on
this
list,
and
thank
you
for
your
service
over
all
these
years
and
I
hope
you
have
a
healthy
retirement.
T
D
B
We
will
and
now
announces
thank
God.
We
only
have
one
death
this
time
every
now,
and
then
we
have
none.
That's
the
best
month.
I
know
a
moment
of
silence:
a
notification
of
death
of
Michael
moffatt,
firefighter
retired
March,
2nd
2000
died,
October,
13,
2022
survivorship
benefits
to
Patricia
Moffett
spouse,
as
I
always
do.
I
am
now
officially
a
senior
citizen.
My
voice
had
not
yet
changed
when
this
gentleman
joined
the
force.
We'll
now
have
a
moment
of
silence.
Q
I
worked
with
Mike
Moffett,
he
was
one
hell
of
a
firefighter
came
over
from
the
county
and
joined
San
Jose
around
1976..
You
can
see
he
was
with
the
widows
and
orphans
a
real
good
union
man.
It
was
a
very
excellent
firefighter
just
a
good
person
and
to
his
wife
and
all
his
family.
We
will
miss
Mike
and
thank
you
very
much
great.
B
Thanks
dick
we're,
we
are
gonna,
get
you
out
of
here
by
noon.
Unless
we
manage
to
screw
up
somehow,
let's
go
through
the
Committees
investment
committee,
escherar.
B
Drew
thanks
in
the
snow
we
receive
and
file
minutes
from
that
special
Romania
October
6th
audit
risk.
So
anytime,
you
need
to
report
out
about
at
risk
nothing
to
report.
Thanks,
we've
receive
and
filed
again
the
October
6th
special
many
minutes,
governance,
Franco
and
ignor
Report.
B
Okay,
we
again
receive
and
file
the
October
6th
special
minutes,
dick
any
report
from
disability.
Q
No,
everything
is,
everything
is
fine,
it
looked
like
it
was
canceled,
so
we've
got
nothing
apart.
December.
B
Great
thanks
dick,
let
me
know
we
also
receive
and
file
the
October
6
special
minutes
and
Joint
Personnel
committee.
I.
Guess.
G
Not
much
to
say
we're
continuing
to
work
on
the
CEO
compensation
survey
and
we're
also
looking
at
the
investment
staff
comp
survey.
We
will
also
be
discussing
the
CEO
and
CIO
review
process
from
last
year
and
that's
about
it.
So
those
are
the
three
main
things
that
the
board's
addressing
and
we
have
another
meeting
next
week
on
December
I
believe.
B
Andrew
any
final
comments:
public
anybody
want
to
jump
in
great
everybody,
stay
online,
we're
going
to
turn
back
over
to
Harvey
for
the
sub
the
committee
thing,
but
let's
go
ahead
and
adjourn
Harvey
over
back
over
to
you,
Harvey
yeah.