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From YouTube: Public Pension Oversight Board (8-22-22)
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A
Well,
good
afternoon
welcome
to
our
monthly
ppob
meeting
and
I
guess
we
look
around.
We
have
a
quorum
and,
madam
clerk,
would
you
please
call
the
roll.
C
D
D
A
We
have
a
quorum
and
call
this
meeting
to
order
first
order.
Business
is
approval
of
the
minutes
and
we
do
have
a
small
change
to
the
minutes.
Last
time
we
we,
mr
totten,
contacted
us
and
we
kind
of
misquoted
him.
So
we
have
a
correction
in
the
minutes
on
on
that
to
my
very
minor
correction.
So,
with
that
said,
motion
for
approval
minutes.
We
have
motion
a
second
all
in
favor
signify
by
saying
I
post
motion
carries
thank
you.
E
Beau
barnes
deputy
executive
secretary
and
general
counsel
for
the
teachers
retirement
system-
I
have
with
me
today,
hopefully
remotely
mr
ed
kavanagh,
with
trs
outside
independent
actuarial
kavanaugh
mcdonald
he's
returning
attending
remotely
today
because
he
is
in
business
travel
today,
but
he
will
be
able
to
be
here
for
the
presentation
on
the
sick
leave
today's
topics.
We
have
several.
We
have
several
slides
today
as
well.
The
first
is
sick
leave
and
talk
about
that.
E
Trs
investment
returns
cash
flow
and
asset
allocation,
but
first
we'll
start
with
sick
leave,
and
I
know
that
probably
most
members
of
this
board
are
familiar
with
some
of
the
actual
concepts
about
funding
and
liabilities.
But
we've
been
asked
today
to
talk
about
a
letter
that
was
prepared
by
cavmack
in
response
to
questions
about
funding
for
sick
leave,
primarily
funding
for
sick
leave
and
liabilities
of
sick
leave
and
changed
it
as
a
result
of
the
budget.
E
That
was
just
enacted
and
so
we're
going
to
go
over
those
we
get
kind
of
into
some
details
with
actuarial
concepts.
With
this
letter
which
we're
going
to
talk
about
here
just
very
shortly
and
again,
even
though
I
believe
that
probably
most
members
are
familiar
with
a
lot
of
these
actuarial
concepts,
I
might
if
I
may
just
very
briefly,
go
over
some
of
the
fundamentals
again,
so
I
think
that'll
help
kind
of
put
the
letter
in
context
and
kind
of
be
a
refresher
reminder
about.
You
know
what
we're
trying
to
do
so.
E
First
of
all,
you
know
all
pension
plans
need
contributions,
and
why
do
we
need
these
contributions?
Well,
you
know,
obviously,
to
pay
benefits,
but
how
do
we
use
those
contributions?
How
are
they
being
applied
and
first
you're
trying
to
pay
for
the
normal
cost
of
the
plan?
That's
what
actuaries
cost!
That's
what
other
public
pension
plans
will
call
that
the
normal
cost
and
the
normal
cost
is
how
much
do
you
have
to
put
aside
each
year
for
those
active
teachers
out
there
teaching
throughout
their
careers?
E
So
we
have
the
normal
cost
that
we
have
to
pay
that
we
need
to
address
and,
in
addition
to
the
normal
cost
for
plans
like
trs
there's
a
second
cost
in
addition
to
the
normal
costs
and
that's
the
unfunded
liability
cost.
That
is,
the
shortfall
and
assets
that
we
have
today
to
pay
for
those
benefits
that
are,
you
know,
even
with
the
normal
cost
contributions
coming
in.
So
we
have
two
things
that
we
are
trying
to
pay
with
those
contributions.
It
doesn't
matter
where
those
contributions,
you
know
what
streams
are
coming
from.
E
E
So
with
that
said,
we
there
are
a
number
of
contributions.
The
trs
receives
to
help
make
sure
that
we
we
do
that.
We
have,
for
example,
the
fixed
statutory
employer
contribution.
We
have
this
fixed
statutory
employee
member
contribution.
E
We
have
what's
called
the
actually
determined
employer
contribution
or
a
deck
that
we
ask
for,
in
addition
to
those
fixed
statutory
contributions,
those
fixed
statutory
contributions
are
more
than
enough
to
pay
for
the
normal
cost,
but
they're
not
enough
to
pay
for
the
off
that
unfunded
liability
and
a
reminder.
What
we're
trying
to
do
with
the
unfunded
liability
cost
is
we're
trying
to
pay
that,
like
other
pension
plans
over
a
set
period
of
time,
in
our
case
it's
30
years.
E
We
now
have
less
than
22
years
left
in
that
amortization
period,
and
when
we
pay
off
that
unfunded
liability
and
when
trs
is
100
funded,
then
the
cost
of
trs
will
be
a
little
bit
less
than
today's
dollars
a
little
bit
less
in
social
security.
So
really
the
problem-
you
know,
as
you
can
see,
is
dealing
with
this
unfunded
liability
and
that's
what
the
problem
has
been.
E
Okay,
and
the
only
two
remaining
at
the
end
of
this,
the
only
two
benefits
or
liability
benefit
liabilities
remaining
at
the
end
of
this
budget
were
one
some
old,
supplemental
cost
of
living
adjustments
that
were
over
and
above
the
fixed
statutory
one
and
a
half
percent
cost
of
living
adjustment.
Teachers
get
a
one
half
percent
every
year
and
then
in
past
years,
when
budgets
were
better,
sometimes
additional
funding
would
be
provided
to
provide
a
cost
of
living
adjustment
above
the
one
and
a
half
percent
cost
of
living
adjustment.
E
E
You
know
that
in
those
green
box
dollars
the
other
item
in
those
green
box
dollars
again
a
special
appropriation
again,
all
these
funding
sources
come
together
to
make
sure
that
we
pay
normal
cost
and
pay
off.
Our
unfunded
liability
is
for
sick
leave
and
specifically
sick
leave
his
salary
credit
and
again,
I
think
most
are
aware
that
when
teachers
retire,
school
districts
have
the
option
of
compensating
them
for
the
unused
sick
leave
at
30
percent
of
their
daily
rate
and
a
lump
sum
payment.
That's
under
statute
under
statute.
E
It's
tears
is
also
required
to
acknowledge
that
payment
and
their
last
annual
salary
for
their
retirement
calculation
purposes
and
the
cost
of
that
sick
leave
as
salary
credit
as
something
by
statute
that
is
paid
by
the
state.
So
those
are
the
two
items
that
we
had
in
the
green
box
dollars
now.
Something
happened
with
this
session
and
that
is
the
the
general
assembly
appropriated
406
million
dollars
to
pay
off
all
those
green
box
dollars.
E
Okay,
so
again
we
have
greenbox
dollars
for
one
those
old
colas,
those
old
cost
of
living
adjustments
and
two
for
a
portion-
and
I
should
be
more
specific
about
this-
not
talking
about
but
portion
of
sick
leave,
liability,
specific.
C
C
E
And
that
would
be
part
of
the
presentation
I
can
cut
to
that
right
now,
if
you'd,
like
sir
or
I
was.
E
The
question
please
yes,
sir,
so
for
sick
leave.
We
had
for
the
green
box
dollars.
That
was
about
one
percent
of
payroll.
That
includes
the
old
colas
too.
That
was
about
39
million
dollars
a
year
and
then
also
we
have
an
active
teacher
liability
as
well
normal
cost
and
liability.
E
That's
an
additional
1.2
percent,
okay
about
0.40
of
that
is,
what's
being
applied
to
normal
costs,
what
we're
putting
aside
each
year!
So
when
teachers
retire
with
investment
income,
we
earn
that
that
will
be
able
to
pay
their
benefits
and
then
that's
about
15
to
16
million
dollars
a
year
for
that
and
then,
additionally,
we
have
that
legacy.
Unfunded
liability,
which
is
the
additional
0.80
of
the
1.2
percent,
and
that's
an
additional
about
32
million
dollars
a
year.
So
right
now
going
forward.
E
What
we're
looking
at
is
about
1.2
percent
of
payroll
and
those
in
today's
dollars
about
47
million
dollars
a
year
is
what
will
be
paid,
contributed
for
sick
leave,
and
that's
only
because
the
general
assembly
appropriated
that
479
million
dollars
to
pay
off
not
only
99
million
dollars
and
owed.
I'm
sorry
when
owed
supplemental
cost
of
living
adjustments,
but
also
380
million
dollars
of
which
was
paying
off
retired
teachers.
Sick
leave
liability
so
what
the
commonwealth
did
when
they
made
that
payment
retired.
All
of
that
green
box
dollars.
E
There
are
no
more
payments
required
of
that.
No
more
one
percent
of
payroll
for
supplemental
colas
or
for
a
retired
teacher
sick
leave
liability.
It's
gone.
We
got
rid
of
the
liability
that
is
represented
by
that
which
was
about
300,
well,
total
479
million
dollars
for
both
the
coales
and
sick
leave
gone
so
we've
traded
that
and
for
sick
leave.
We've
gone
from
787
million
dollars
in
total
liabilities.
E
I
I
do
need
to
pass
a
there's
a
caveat
here,
and
this
is
one
of
the
questions
that
we
had
to
respond
to
the
later.
Is
that
there's
a
new
benefit
to
trs?
Okay,
there's?
Actually,
we
have
several
benefit
tiers.
This
is
tier
four
that
started
january.
First
tier
three
limited
sick
leave
to
no
more
than
300
days,
and
I
know
that
sounds
like
a
lot,
but
we
do
have
members
who
have
really
long
careers
and
they
have
more
than
300
days
at
retirement.
E
So
for
new
members
on
reference
july,
1st
2008
no
more
than
300
days
and
then
trs4
commonwealth
erected
a
wall
against
any
new
unfunded
liabilities
for
these
new
tier
members
that
we
call
trs4
members.
So
everybody's
come
on
board
since
january
first
and
we've
already
got
a
bunch
of
them
on
there's
no
liability
for
the
commonwealth
for
cycling
because
they
don't
get
to
use
sick
leave
in
that
way
as
sick
leave,
his
salary
credit,
where
the
commonwealth
has
an
obligation
to
pay
for
it.
E
In
fact,
the
commonwealth
is
walled
off
responsibility
for
new
any
new
unfunded
liabilities
that
might
develop
these
new
trs-4
members,
because
that
the
the
responsibility
for
any
unfunded
liability
might
develop
shifts,
and
it
goes
to
the
members
all
up
to
and
including
suspension
or
adjustment
of
benefits.
You
know
so,
and
that
are
actually
say
it's
unlikely.
We'd
have
to
do
that,
because
this
is
a
very
well-funded
trs-4
fund.
E
More
likely,
we
would
draw
from
a
rainy
day
fund
called
the
stabilization
reserve
account
before
we
would
ever
have
to
adjust
benefits,
but
the
commonwealth
for
that
foundational
pension
and
supplemental
savings
account.
I'm
not
talking
about
health
insurance
now,
but
just
for
that
it's
limited
to
10
contribution
and
that's
it
going
forward
for
these
new
trs-4
members.
C
E
E
There
was
a
question
in
the
letter
to
which
kavanaugh
mcdonald
responded,
and
mr
coble
asked
him
to
interject
at
any
time
if
he
wants
to
add
anything
to
what
I
say
or
or
correct,
if
I
do
say
anything
wrong,
but
there
was
because
we
send
our
budget
request
over
in
the
fall
before
the
session.
So
we
sent
our
budget
for
the
22
session
over
in
the
fall
of
21..
E
We
did
make
a
request
of
39
million
dollars
for
each
year,
for
the
supplemental
cost
of
living
adjustments
and
for
the
sick
leave
liability
for
retired
teachers,
because
we
didn't
know
what
the
budget
was
going
to
look
like
ultimately,
and
the
budget
did
contain
39
million
dollars
in
each
of
the
the
current
fiscal
year
of
the
budget,
buying
them
in
the
next
fiscal
year
of
the
budget.
E
Biennium
there's
39
million
dollars
in
each,
and
the
question
was:
is
that
more
than
we
needed
now,
the
green
box
dollars
are
paid
off
and
the
answer
that
is
yes,
that
can
be
applied
just
to
the
general
unfunded
liability
of
the
retirement
system.
So
it
that's,
not
lost.
You
know
it's
it's
there
and
can
be
applied
to
all
liabilities.
Just
like
we
have
all
these
contribution
streams
coming
in.
They
all
go
to
help
pay
normal
costs
and
pay
off
unfunded
liability
and
that
78
million
dollars
would
be
applied
to
the
unfunded
liability.
E
E
There
is
no
cost
to
commonwealth
at
all
for
sickly,
for
these
new
members
that
that
and
that
kevin
mcdonald
confirmed
their
letter
that
there
will
be
no
fee
or
charge
or
cost.
You
know
built
in
to
reflect
any
liability
for
the
commonwealth
for
trs4.
D
The
39
million
that
you
just
mentioned
in
each
of
the
physical
years.
I
think
we
had
conversed
about
this
a
couple
of
meetings
ago.
Maybe
that
was
allocated
appropriated
for
a
particular
purpose.
Yes,
but
you're,
saying
that
you
can
reallocate
or
reappropriate
it
to
a
different
purpose
and
apply
it
toward
the
unfunded
liability.
E
Yes,
so
mr
cobell
correct
me:
if
I'm
wrong,
but
it's
you
know
the
actual,
just
gonna,
look
all
these
income
streams
coming
in
and
that
will
be
used
to
pay
off
the
general
unfunded
liability
you'll
be
applied
to
that,
and
that
is
in
mr
copeland
that
kevin
mcdonald's
letter
to
the
board.
A
D
A
D
Say
that
we
did
that,
would
that
be
no
reappropriation?
At
that
point,.
D
D
D
E
As
I
believe
we
discussed
last
time,
certainly
the
payment
of
that
39
million
dollars
each
year,
the
78
million,
which
was
requested
back
in
the
fall
before
the
budget
was
concluded
with
something
certainly
as
a
polish
decision
to
commonwealth.
If
they
wanted
to
say
look,
we
feel
like
we
made
an
overpayment
on
the
78
million
dollars
for
the
two
years.
They
could
certainly
make
that
that
adjustment
in
that
next
budget,
that
would
be
a
policy
decision
for
the
college.
D
Noted,
mr
chairman,
I
just
want
to
make
sure
that
I'm
clear
and
I
believe
we
are-
the
general
assembly
appropriates
and
appropriates
for
a
particular
purpose
and
when
it
does
there's
no
authority
by
krs,
by
which
an
agency
may
re-appropriate
or
repurpose
that
money.
Otherwise,
there's
no
point
in
us
putting
any
details
or
purpose
behind
any
appropriation
we
make.
So
I
think
we're
good.
It
was
appropriated
for
purpose.
The
purpose
is
no
longer
necessary
and
there
is
no
authority
to
re-appropriate
pass
the
decision
of
the
general
assembly.
Thank
you.
A
Thank
you,
mr
chairman
bo.
Let
me
first
there's
nothing
normal
about
normal
cost.
I
don't
know
why
we
even
use
that,
because
there's
nothing
normal
about
it,
we
always
have
when
you
hire
somebody,
apparently
with
the
defined
benefit
the
day.
They're
hired,
there's
a
there's,
an
unfunded
liability
created,
and
we
start
that
additional
money
to
follow
them
through
their
career
is
my
understanding,
but
on
the
39
million
that
we
were
paying
on
retired
teachers
and
in
the
green
box
dollars,
we
paid
debt
for
years.
A
A
E
A
E
E
Okay
and
I
apologize,
I
might
have
gotten
those
backwards,
so
the
greenbox
dollars,
which
represented
sick
leave,
liability
for
retired
teachers
have
been
paid
back
since
at
least
the
90s,
and
maybe
earlier
it
could
have
even
been
the
80s.
E
The
liability
for
active
teachers,
both
normal
cost
and
unfunded
liability,
was
more
recent,
as
my
understanding
my
recollection,
that
would
have
been
in
the
2000s,
and
that
was
part
of
the
a
deck
that
additional
amount
that's
requested
above
the
fixed
statutory
amount.
Of
course.
About
that
same
time,
there
were
several
years
where
the
full
funding
was
not
provided.
E
E
E
We
were
paying
off
that
unfunded
liability
for
the
retired
teachers,
which
was
at
380
million
dollars
and
380
million
that
479
million
dollars
that
we
received
went
towards
just
paying
off
that
portion
of
the
unfunded
liability
for
retired
teachers
completely.
Just
leaving
the
active
teacher,
normal
cost
and
unfunded
liability
to
be
paid.
F
On
the
video
okay,
can,
I
just
add
something,
and
mr
barnes
has
described
exactly
what
we
do
and
how
we
value
sick
leave
I'll
interject
to
that
we
did
not
start
valuing
sick
leave
within
our
liabilities
and
normal
costs,
like
he
said
until
the
mid
2000s,
I
think
it
was
2005-
was
the
first
valuation
where
we
had
a
a
liability
for
sick
leave.
F
F
That's
when
that
amount
is
is
hopefully
enough
to
cover
their
retirement
benefits.
Part
of
that
retirement
benefit
is
obviously
a
piece
of
it
is
they're
using
sick
leave
to
and
come
up
with
a
little
bit
larger
of
a
benefit
than
they
would
if
they
didn't
have
it,
so
that
is
part
of
the
normal
cost.
Now
the
normal
cost
is
about
16
of
pay
for
an
active
member,
a
non-university
active
member.
F
Apologize
we're
having
some
weather
here
in
atlanta,
so
part
of
that.
No,
so
the
total
normal
cost
that
we're
trying
that
we're
saving
for
each
active
member
in
the
non-university
group
is
about
16
percent
of
pay.
Each
year
now
a
member
is
paying
a
portion
of
that
they're
paying
their
employees
what's
left
is
the
employer,
so
that
.4
is
a
very
small
piece
of
that
16
percent
that
we're
saving.
While
the
teacher
is
in
active
service,
but
there
is
a
benefit
that
we're
trying
to
value
when
they
get
to
retirement
status.
F
So
that's
the
the
point,
four
percent,
as
beau
said
in
our
letter
states,
that's
about
fifteen
point,
seven
million
dollars
in
today's
dollars.
Now
trs
four
has
no
more.
F
You
know
those
active
teachers
coming
on
to
the
roles
now
will
not
have
the
ability
to
use
their
sick
leave
as
part
of
their
benefits,
so
that
number
is
going
to
decrease
as
a
percentage
of
pay,
and
you
see
in
the
letter
that
the
dollar
amount
drops
pretty
pretty
significantly
over
the
next
30
years
as
we,
where
you
have,
you
know
more
and
more
trs
for
active
teachers.
So
we
don't
have
to
set
aside
it's
not
going
to
be
in
their
normal
cost.
It's
only
going
to
be
in
trs3.
F
Other
tips,
so
so
I
just
wanted
to
interject
there
and
and
just
kind
of
hopefully
clarify
that
now
the
green
box
dollars
were
for
retirees
that
you
know
came
into
the
roles
well
before
05
2005,
where
we
weren't
we
weren't
putting
aside
money
during
their
active
status,
so
we
had
to
set
up
a
a
little
bit
of
a
fund
as
the
to
cover
their
piece
of
liability
due
to
their
sick
leave,
and
that
was
the
39
40
million
dollars
each
year.
That
was
appropriating
it.
F
So
that's
again,
that's
paid
off
that's
great,
and
so
you
know
now
we're
left
with
this.
Just
the
1.2
percent
of
payroll
going
forward,
which
is
on
the
slide
here.
A
F
Yeah
I'll
I'll
try
to
clear
up
the
mud
so
so
right
now,
ktrs
has
a
trust
fund
set
up
of
about
and
again
I'm
going
back
to
2021
numbers
so
a
little
bit,
maybe
of
a
better
time.
But
we
had
a
trust
fund
set
up
of
twenty
area
of
25
billion
dollars.
F
Well,
liability
for
all
of
the
retirees
and
active
members
that
have
accrued
a
benefit
is
about
40
million
dollars.
So
there's
a
portion
that
is
unfunded
and
beau
mentioned
the
unfunded
liability.
It
was
about
17
billion
dollars
in
the
last
valuation
that
we
valued
so
again
we're
making
a
contribution
similar
to
paying
off
that
mortgage.
F
We're
trying
to
pay
off
that
17
in
17
billion
dollars,
we're
a
portion
again,
another
portion
of
that
17
billion
dollars
that
has
been
accrued
to
date
for
those
active
teachers
who
we
didn't
start
who
started
before
05
and
we
weren't
as
part
of
their
normal
cost
is
hasn't.
We
don't
have
enough
money
right
now
to
have
to
in
the
bank
to
cover
that
portion
of
their
sick
leave
and
it's
an
estimate.
But
our
estimate
is
that
that
portion
is
about
four
hundred
and
five
hundred
seven
dollars
as
bo
mentioned
earlier.
F
So
that's
the
portion
of
the
unfunded
that
we're
trying
to
pay
back.
So
in
our
letter,
that's
the
second
column
there
that
we're
paying
back
over
a
22.9
year
period
where
it
starts
at
30
million
and
it
grows
to
31
and
goes
all
the
way
up.
But
it's,
but
our
anticipation
is
it's
similar
to
a
mortgage
you're
going
to
be
paying
that
off
over
the
next
22
or
so
years.
So
that's
the
portion
that
is
not
currently
funded
with
assets
of
the
sick
leave
liabilities.
The
rest
is
cover.
A
D
Thank
you,
mr
chairman
bo,
always
appreciate
you
being
here
your
indulgence
with
us
on
the
a
deck
I'm
looking
at
the
appendix
to
the
letter
that
was
sent
by
the
your
actuary
and,
of
course
it
does
show
that,
as
he
just
mentioned,
that
the
normal
costs
are
going
to
decrease
the
cost
for
the
unfunded
liability
is
going
to
increase
and
the
total
net
cost
is
going
to
increase
about
10
million
dollars
over
this
period
per
year.
D
Now
this
2040,
when
this
last
payment
is
that
consistent
with
our
unfunded
liability
on
our
all
of
our
pensions.
Yes,.
E
D
D
E
E
The
normal
cost,
of
course,
for
all
these
benefits,
whether
it's
pension,
you
know,
disability
life
insurance,
even
the
life
insurance,
is
small
as
a.
There
are
a
lot
of
things
that
add
liability,
and
I
believe
mr
coble
would
say
that
they
look
at
those
in
total
and
come
up
with
total
liabilities
and
those
contribution
streams.
E
We
need
from
all
any
sources,
the
ones
I
just
named
coming
in
to
pay
normal
costs
and
then
from
liability
off
that
immunization
period,
30
now
22
years,
mr
colwell,
do
you
have
anything
to
correct
or
add
to
that.
F
Trying
to
set
aside
all
of
that,
those
folks
who
leave
the
system
before
retirement
they're
entitled
to
a
benefit
sometime
in
the
future,
so
there's
there's
a
there's,
five
or
six
components
of
of
of
a
benefit
that
a
member
is
receiving,
but
the
majority
is
retirement
benefits.
Obviously,.
D
And
my
question
was
leading
to
a
request-
and
I
hope
chairman
petrie,
won't
mind
me
making
this
request,
but
when
we
in
the
future,
when
your
system
sends
us
the
a
dec
number,
would
it
be
possible
to
categorize
each
of
these
components?
So
we
have
a
clear
of
where
exactly
the
money's
been
going
toward
to
help
us
understand
how
much
is
going
toward
sick
leave?
How
much
is
going
toward
each
component?
A
Bo
I'd
hate
to
keep
keep
asking
this
looking
at
the
sheet.
I'm
I'm
trying
to
to
add
in
my
head
how
much
this
on
the
sheet
that
we
got
of
the
payoff
schedule
for
that
unfunded
liability
for
sick
days.
I'm
thinking
that's
about
a
billion
dollars.
If
I
add
correctly.
A
20
years,
so,
if
that's
correct-
and
we
owe
408
million
or
are
we
paying
interest
to
trs
on
that
on
that
accrued
liability
that
we
really
really
have
it
it's
there?
Are
we
paying
interest
on
it.
E
It's
that
mr
colbert
address,
but
I
think
that
may
just
be
a
function
of
payroll
growth
as
much
as
anything
else.
But.
F
It
it's
so
just
like
you're,
just
like
any
mortgage
you're
paying
interest
on
that
as
well.
So
you
have
a
unfunded
of
408
million
dollars
for
sick
leave.
If
you
paid
it
all
at
once,.
F
If
you're,
paying
it
over
a
23-year
period
or
so
for
20-year
period,
you're
going
to
be
paying
some
interest
component
of
it,
so
so
that's
embedded
in
here
and
as
well!
So
I
think
it
comes
down
to
a
little
bit
less
than
half
than
the
400
million
a
little
bit
less
than
double.
I'm
sorry
than
the
400.
A
Okay,
I
have
a
feeling
representative.
Petry
is
probably
going
to
ask
you
for
a
breakdown
on
those
those
sick
day
adac
when
we
get
to
get
the
next
request,
because
again
it's
clear
as
mud
and
we've.
All
of
us
have
asked
many
questions
about
sick
leave
and-
and
it's
just
it's
very
difficult
to
understand
and
and
a
lot
of
the
information
we
had
to
you
know
we
had
to
ask
for
so
I'd
like
to
see
an
explanation.
A
I'm
sure
I'm
he'll,
I
don't
have
to
ask
representative
petrie
and
senator
mcdaniel.
That
will
be
at
your
asking
that
senator
thayer
has
a
question.
E
A
C
E
C
A
Okay,
not
to
not
to
wear
this
beat
this
horse
to
death,
but
I
still
have
a
couple
more
questions
for
you
bo
all
right.
We
have
this.
We
have
the
green
box
dollars,
we've
been
paying
for
for
years,
and
we
now
know
that
we've
have
an
a
dac
that
we've
been
paying
since
2006
out.
2005,
I
believe,
was
a
comment:
have
we
overpaid
or
paid
for
this
twice?
A
A
E
So
those
two
streams
of
payment
were
doing
that
they
were
paying
normal
cost
and
paying
off
the
unfunded
liability,
that's
owed,
which
was
totally
787
million
dollars
and
with
the
green
box
dollar
payoff
we've
eliminated
380
million
dollars
of
that
sick
leave
unfunded
liability
and
are
down
to
407
million
dollars.
So
no
those
are
being
applied
to
pay
normal
cost
and
unfunded
liability
or
liabilities
of
sick
leave
and
they're
being
applied
exactly
as
they
should
be
dollar
for
dollar.
A
A
That
unused
personal
days
and
unused
annual
leave
are
are
getting
reported
to
trs
as
sick
days,
and
I
read
the
krs
that
on
that,
and
I
don't
see
how
that's
possible
that
we
could
take
something
that
was
in
intended
as
a
leave
and
personal
days
that
we
can.
We
can
turn
those
into
sick
days.
E
Well,
you're
right
there
are
districts
that
are
kind
of
you
know
doing
different
things
with
personal
leave
days,
but
they
are,
some
of
them
are
converting
unused
sick
days,
I'm
sorry
unused
personal
days.
They
get
converted
to
sick
leave
days.
The
same
thing
happens,
you
know,
for
example,
in
state
government
state
employees
with
20
or
more
years
of
service
can
carry
60
annual
leave
days
over
every
year,
but
by
personnel
cabinet
regulation.
E
Any
days
in
next,
six
of
60
at
the
end
of
the
calendar
year
have
to
be
converted
to
sick
leave,
and
I
think
probably
those
regulations
apply
to
districts
too
about
well,
I'm
going
to
say
I
shouldn't
say
that
I
just
I
can
speak
for.
I
know
what
state
government
has.
So
it's
not
uncommon.
I
mean
that
you
have
unused
annual
days
convert
rollovers
sick
days,
but
I
don't
know
enough
of
specifics
about
what
every
district
is
doing
out
there
or
what
authority
they
have
under.
You
know:
department,
education,
statutes.
A
I
think
that's
something
we
it's,
I
would
assume
and
that
somebody
knows
how
that's
coming
about,
because
when
you
convert
a
a
personal
day
to
a
sick
day
and
they
use
that
to
spike
their
pension,
it
costs
the
district
very
little
there's
and,
and
it
costs
the
state
as
a
considerable
cost
to
the
state.
When
that
when
that
happened,
so
I
think
we
need
to
dig
into
that
a
little
further.
But
in
your
opinion,
does
it
current
krs
allow
for
that
to
happen.
E
I
think
probably
you
need
to
look
at
the
school
district
statutes
about
their
compensation
and
how
they
can
compensate
their
employees
and
whether
or
not
personal
days
are
allowed
to
be
rolled
over
into
sick
leave.
Again.
I
know,
for
example,
state
government
state
employees
have
days
in
excess
of
annual
days
in
excess
of
60
roll
over
by
law.
So
it's
a
little
bit.
That's
outside
my
bailiwick.
We
have
those
days
reported
to
us
as
sick
days
and
by
statute.
E
We're
required
to
use
sick
leave
days
that
30
payment
that
we
receive
on
sick
days
add
that
to
their
last
year's
salary,.
A
Well
again,
I
I
think
it
would
be,
as
an
oversight
committee
to
and
insist
that
that
trs
know
exactly
what's
going
on
out
there
as
those
sick
days
come
to
us
as
they're
intended
for
one
thing,
but
we're
we're
using
them
for
something
else,
or
vice
versa.
They're
they're,
not
personal
days,
were
not
intended
to
be
sick
days
and
to
be
used
towards
your
retirement
with
the
way
I
read
the
statute
so
again,
that's
something
that
we
would
your
actuary
and
yourself.
A
We
would
like
to
know
more
about
that
as
as
we
move
forward,
I
think
that's
all
the
all
that
I
have
if
you
want
to
any
other
questions
from
okay
bo,
please.
E
Was
just
making
a
note
there,
sir,
about
your
question?
Okay,
our
next
item
that
we
have
up
is
the
provisions
under
which
retiring
members
may
return
to
work
for
a
trs
employer.
So
I'll
just
refer
to
these
as
return
to
work,
provisions
return
to
work
and
first
we
we
do
get
it's
a
fair
question.
Why
do
we
even
have
provisions
you
know
under
which
retiring
members
can
return
to
work
for
a
trs
employer?
Why
were
there
any
provisions
at
all?
E
Well,
first,
you
know
it
allows
school
districts
to
address
staffing
needs
by
using
retired
teachers,
but
by
accomplishing
and
doing
so
by
making
sure
we
accomplish
two
critically
important
goals,
and
the
first
goal
is
that
we
want
to
make
sure
that
return
to
work
provisions
are
an
act,
are
done
in
actually
sound
man
when
people
teachers
retire
and
turn
to
work.
E
It's
actually
sound,
and
it
has
not
always
been
that
way
and
by
example,
I
would
say
before
2002
teachers
could
retire
return
immediately
to
the
classroom,
work
up
to
100
days
and
receive
full
salary.
E
That
looks
like
a
pretty
good
deal,
and
I
remember
specifically
because
I
was
there-
educational
professional
standards
board
asked
us
to
look
at
the
numbers,
because
then
you
and
still
teachers
could
retire
at
any
age,
with
27
years
of
service.
Theoretically
graduate
from
college
22,
retire
49.
as
governor
sanders
board
asked
us
to
look
at
how
many
teachers,
the
trend
of
teachers
retiring
over
the
last
several
years,
with
exactly
27
years
of
service
and
going
back
in
that
100-day
program.
Well,
it
was.
E
This
trend
was
spiking
up
sharply
because
they
just
made
too
much
sense.
You
know
118
118
percent
of
pay
working.
You
know
not
185
days
about
100,
it
was
too
attractive,
so
the
return
to
work
provisions
were
tightened
up
in
2002,
so
they
became
actually
sound
okay
and
they
were
done
in
a
number
of
ways
and
I'm
going
to
to
focus
just
real
quickly
on
those
one.
You
know
because
our
prior
our
legacy
teachers
tiers
one
two
and
three
have
none
for
the
liability
teachers
going
back
to
work.
E
Those
contributions
are
still
being
made
in
those
positions
to
help
us
with
that
unfunded
liability.
Also,
there
are
limitations.
There
are
limitations
on,
for
example,
the
number
of
full-time
positions
available
for
retired
teachers
to
go
back
into.
These
aren't
really
an
issue
which
a
few
slides
later
on
I'll
discuss.
Why?
That's
not,
but
it's
important
that
we
did
have
limitations
on
how
many
full-time
positions
there
are
and
at
the
part-time
positions
there's
a
limitation
on
the
number
of
days.
E
They
can
work,
essentially
it's
0.69
of
a
contract
year
and
also,
very,
very
importantly,
there's
a
limitation
on
the
salary
that
they
can
earn.
Now
when
they
return
to
work
for
a
trs
employee
or
in
a
trs
position.
We
didn't
have
that
with
100
day
program,
but
we
have
that
now.
If
they
retire
30
more
years
of
service,
they
can
return
at
75
of
their
last
annual
compensation
if
they
retire
less
than
30
years
of
service.
It's
65
percent
of
their
last
annual
compensation,
so
very
important.
E
That
has
helped
us
actually,
because
we
now
have
a
system
we're
getting
back
to
where
people
are
retiring,
closer
to
60
age
60
than
age
50..
So
we
avoid
paying
out
benefits
pension
in
medical
years
earlier
than
we
otherwise
would
so.
Actually,
the
actuarial
goal
has
to
be
kept
maintained
when
we
are
talking
about
return
to
work
provisions,
the
very
important
critically
important
consideration
is
that
we
maintain
compliance
with
federal
tax
law.
E
The
irs
is
looking
to
ensure
that
retirement
systems
only
pay
retirement
benefits.
When
there's
been
a
legitimate
retirement
event,
the
member
has
actually
retired
and
they
would
call
it
a
bona
fide
return.
They
have
bona
fide
retirement
and
that
that
retirement
system
does
not
allow
retirement
benefits
to
be
paid,
while
that
member
is
still
employed
okay,
so
that
is
the
direction
they
have
given
us
and
they
don't
give
us
a
lot
of
other
direction
about
what
works
and
what
ensures
a
bonafide
retirement.
E
But
they
do
say
that
we
have
to
bonafide
retirement
and
that's
the
one
thing
they
say
we
have
to
have.
The
one
key
thing
with
having
a
bona
fide
retirement
is,
there
can
be,
cannot
be
a
pre-arranged
agreement
between
that
retiring,
employee
and
the
employer
for
that
retiring
employee
to
go
back
to
work
for
that
employer.
E
That
is
one
thing
that
the
irs
has
expressly
said
is
not
a
bona
fide
retirement.
So
if
you
have
something
that
allows
members
to
receive
retirement
benefits
that
have
a
bona
fide
retirement,
the
retirement
system
is
subjected
to
disqualification
as
a
401a
plan.
Therefore,
our
members
could
go
back
to
making
contributions
after
tax
and
that
member
subjects
themselves
to
tax
penalties
for
having
an
in-service
distribution,
so
very
important
that
we
are
compliant
federal
tax
law.
E
How
do
we
show
the
irs
that
we
are
tax
compliant,
that
we
do
have
bona
fide
retirements,
a
couple
of
ways?
One
we
require
retiring
members
and
their
employer
to
attest
that
there's
no
pre-arranged
agreement
for
that
retiring
member
to
return
to
work
for
the
employer?
That's
one
thing
we
do.
The
second
thing
we
do
is
something
that
many
pension
plans
do
across
the
nation
and,
as
we
acquire
breaking
service
from
the
time
that
that
member
retires
before
they
can
return
to
work
now,
the
irs
hasn't
said
that
works
much
less.
E
So
that's
that's
why
we
have
these
return
to
work
provisions
first,
just
so
for
comparison,
I'm
going
to
start
with
what
the
permanent
return
to
where
provisions
are.
These
are
the
ones
that
were
enacted
in
2002.
E
They
are
codified
in
statute
where
they
remain
today,
and
we
have
looking
at
the
slide
in
front
of
you.
We
have
on
the
left.
We
have
the
type
of
return
to
work
program
that
we're
that
we're
going
to
be
addressing
and
to
the
right
we're
going
to
have
what
those
permanent
rules
are
for
that
program.
So
starting
in
the
first
row,
upper
left
and
you'll
see
part
time
in
full
time.
E
E
The
breaks
and
service
are
required,
whether
part-time
or
full-time,
that
retiring
member?
If
they're
going
back,
I'm
sorry
that
retired
members
are
going
back
part-time
for
the
same
or
a
different
employer.
E
They
are
required
to
have
a
three-month
break
in
service
if
they
go
back
to
work
full-time
for
the
same
employer,
it's
a
12-month
break
in
service
if
they
go
back
to
work
for
a
different
employer,
full-time,
it's
a
three-month
breaking
service,
so
basically
a
different
employer
with
a
part-time
or
full-time
three-month
break.
It's
going
back
to
the
same
employer,
part-time
three-month
break
full-time,
12-month
break.
E
There
are
also
day
limits
going
back
part
time
0.69
of
a
year.
There's
a
limited
number
of
full-time
positions
available.
It's
equivalent
that
two
of
the
employers
can
school
districts
can
have
no
more
than
three
percent
of
their
full-time
trs
employees.
No
more
than
three
percent
can
be
retirees.
Okay,
that's
not
an
issue
for
districts.
I
have
a
slide.
That'll
show
that
in
a
little
bit,
but
that
is
good
to
have
a
limit
in
there
and
also
very
important.
E
There
are
those
wage
limitations
in
our
standard,
retire
return
to
work
program
and
again
is
the
predominant
program
and
again
that
that's
75
and
65
of
salary
last
annual
compensation,
measured
on
a
daily
basis,
now
there's
another
program:
they
can
go
back
in
there's
actually
two
more
one's
waiver.
They
waive
their
retirement
allowance
and
go
back
not
receive
return
allowance.
Not
many
people
use
that,
but
the
other
one
is
critical
storage.
It's
called
critical
shortage
and
those
are
the
bottom
two
rows
of
this
slide
and
there
are
critical
storage,
part-time
and
full-time
programs.
E
These
are
available
only
for
school
districts,
not
other
trs
employers
and
their
intent
is
to
be
able
to
allow
these
school
districts
to
incentivize
retirees
to
come
back
in
those
hard
to
fill
teaching
positions.
They
just
can't
find
anybody
else
for,
and
they
do
that.
You
still
have
the
breaks
and
service
of
three
months
or
12
months,
depending
on
how
they're
going
back
and
who
they're
going
back
for,
but
there
is
no
limitation
on
their
salary
that
school
district
can
pay
them
any
salary
they
want
to.
Now
there
is
under
the
permanent
laws.
E
Districts
can
have
no
more
than
one
percent
of
their
full-time
trs
employees
in
the
critical
shortage
program,
but
every
district
gets
at
least
two
critical
shortage
programs,
because
some
districts
are
too
small
or
so
small
that
one
percent
you
know
would
be
less
than
one.
So
there
is
a
limitation
on
those
critical
shortage
programs.
E
Hiring
people
in
the
critical
shortage
is
clearly
or
hiring
any
retiree
into
even
the
standard
program.
Clearly,
the
discretion
of
the
school
district,
they
don't
have
to
hire
anybody
back,
they
don't
have
to
any
retirees
back
and
they
don't
have
to
hire
them
into
the
criminal
shortage
program.
Some
of
our
members
feel
like
they
have
a
right
to
be
rehired
the
critical
choice
program,
but
that's
clearly
the
employer's
discretion
to
do
that.
E
So
those
were
the
permanent
codified
statutory
provisions,
but
those
provisions
have
been
amended
over
the
past
year.
Most
recently
with
house
bill
won
the
budget
bill
enacted
during
the
2022
regular
session,
and
it
made
temporary
adjustments
to
those
provisions
and
we
certainly
understand
the
hardship
that
school
districts
have
in
recruiting
teachers
right
now.
You
know
we
read
about
it
in
the
paper
all
the
time
and
we
there's
been
a
lot
of
confusion
about
what
these
temporary
provisions
are.
E
So
trs
we're
working
as
hard
as
we
can
to
help
employers
and
our
members
understand
what
those
temporary
provisions
are
and
what
they
allow,
and
these
provisions
are,
unlike
the
permanent
provisions,
they're,
not
codified
in
statute
they're,
non-codified
languages.
A
We
have
a
question:
if
you
don't
mind
representative
tipton,.
D
Thank
you,
mr
chairman,
and
I
guess
two
three
questions
here.
If
it's
all
right,
mr
chairman,.
D
D
E
Provisions,
the
it's
there's
several
moving
pieces
here:
okay,.
D
D
To
that,
okay,
and
now
it's
my
understanding
that,
in
your
return,
your
guidance
on
return
to
work,
that
per
advice
of
your
outside
tax
council,
that
trs
will
be
reporting
retirees
to
the
irs
as
potential
in-service
distribution.
If
they're
under
59
and
a
half,
is
that
correct
information
that.
E
D
Correct
is
this
just
for
the
temporary
provisions
or
for
all
employees
returning
to
work.
E
No,
so
certainly
we
have
a
the
temporary
provisions
provide
for
a
shorter
break
and
service.
You
know
to
kind
of
jump
ahead.
It's
one
month,
instead
of
the
respect
of
three
or
12
months
and
and
public
pension
plans,
some
across
the
country
do
have
a
one-month
break
in
service
and
the
irs
has
not
said
there's
anything
wrong
with
that,
but
our
tax
counsel,
looking
at
it.
E
We
could
report
this
as
an
in-service
distribution
if
they
are
under
59.5,
if
they
only
have
a
one
month
break
in
service,
if
they're,
59
and
a
half
or
over
or
they
observe
the
traditional
permanent,
three
or
12
months
break
some
surface,
they
will
not
be
reported
so
now,
just
because
they're
reported
that
way
doesn't
mean
that
they
have
to
file.
That
way
I
mean
they
can
file
their
taxes.
You
know
in
the
winter
in
february
as
not
having
had
an
in-service
distribution,
that
is
the
decision
and
that
they
have.
E
Not
a
lot
of
feedback
there's
been
some
but
talking
to
our
staff
and
the
call
center
not
a
lot
about
this.
Interestingly,
but
volume
may
increase
you
know.
A
lot
of
this
is
new
for
our
members
and
they're
still
trying
to
understand
what
these
provisions
are
and
what
they
allow
and
again,
there's
been
a
lot
of
misunderstanding
about
what.
E
E
E
I
do
not
know
we,
our
tax
counsel,
maybe
is
ice
miller
out
of
indianapolis.
They
are
a
large
law
firm
that
re-specializes
in
retirement
issues,
public
and
private
sector
for
retirement
systems,
public
and
private
across
the
nation.
D
I'll
verify
that
when
mr
eager
gets
up
here
and
the
reason
for
that
question
is
in
kppa
for
a
hazardous
full-time
heritage,
duty
position,
they
only
they
have
the
same
one-month
break
for
hazardous
duty
positions
in
kppa.
So
I
was.
I
was
just
curious
if
it's
my
understanding,
it's
the
same
tax
council.
So
my
really
I'm
I'm
trying
to
understand
if
it
is
the
same
accounts
tax
or
the
are
the
systems
getting
conflicting
information,
conflicting
advice.
E
No,
I
would
say
not
just
for
the
reason
that
they
pointed
out
to
us
that
you
know
a
one
month:
break
is
less
than
the
summer
break.
You
know
for
a
school
district
based
retirement
system,
so
there
are
a
lot
of
differences
between
trs
and
kppa,
and
for
that
reason
you
know
things
aren't
always
done
exactly
the
same,
quite
usually
quite
often
or
not.
Okay,.
E
Yes,
sir,
okay,
so
again,
this
trs
realizes
clearly
there's
a
huge
teacher
shortage
issue.
You
know
in
in
the
commonwealth
and
and
it's
a
real
problem
and
again
we're
trying
to
communicate
to
our
members
to
help
them
understand
what
these
temporary
provisions
are.
You
know
the
first
temporary
provision
was
senate
bill
one
in
the
special
session
last
september.
Then
we
had
senate
bill
25
earlier
on
in
the
regular
session
over
the
2022
session
and
then
ultimately
house
bill.
E
One
was
enacted
at
the
end
of
the
2022
regular
session
and
sort
of
the
built
upon
house
bill.
One
kind
of
builds
upon
the
earlier
versions
with
one
you
know,
there's
one
very
significant
difference
between
house
bill
1
and
the
earlier
senate
bill
1
senate
bill
25
is
that
those
earlier
bills
applied
only
to
members
who
retired
on
or
before
august
1st
of
2021..
E
So
the
special
session,
of
course,
was
in
september,
so
you
know
it
applied
to
people
who
had
already
retired
only
house
bill.
1
does
not
have
that
august.
1
date.
It
applies
to
people
who've,
already
retired,
as
well
as
the
people
who
will
retire
over
the
next
two
years.
So
that's
a
significant
difference
between
house
bill,
1
and
earlier
videos
also,
the
earlier
bills
dealt
with
kppa
in
addition
to
trs
and
house
bill,
1
just
deals
with
trs.
E
For
that
reason,
it
applies
only
to
local
school
districts.
You
know
these
temporary
measures
only
for
local
school
districts,
temporary
relaxes.
Certainly
these
return
to
work
provisions
and
the
provisions.
These
temporary
provisions
of
house
bill
1
revert
back
to
the
permanent
statutory
provisions
because
they
sunset
june
30th
2024.
So
after
june
30
20
of
24,
we
go
back
to
only
the
permanent
statutory
provisions
that
are
available.
E
Okay,
whoops,
okay
apologize,
so
my
screen
is
cut
off,
so
I
can't
see
fully
on
the
laptop.
So
again,
there's
there's
been
a
lot
of
misunderstanding
and
we're
still
trying
to
clarify
that
it's
important
for
our
retirees
to
know
that
these
return
to
work
provisions,
whether
permanent
or
temporary,
apply
whether
or
not
they're
going
into
a
certified
or
classified
position.
It
doesn't
matter
it
doesn't
matter
if
you're
not
going
back
into
a
trs
position.
E
There's
a
one-month
break
in
service
okay,
regardless
of
how
you're
going
back
whether
you're
going
back
in
the
standard
retire
return
to
work
program
with
those
wage
limitations,
part-time
full-time,
whether
or
not
you're,
going
in
the
critical
shortage
program,
part-time,
full-time,
just
a
one-month
break
in
service
is
all
that
is
needed.
There's
something
additionally
that
house
bill.
One
does
at
the
previous
two
bills
during
the
last
year
did,
and
that
is.
E
E
Now
that
not
we're
not
seeing
as
much
impact
with
that
as
we
might
have
thought
and
again,
this
goes
away
july,
1st
2024,
but-
and
I
have
a
slide-
that's
going
to
talk
a
little
bit
more
about
how
much
how
frequently
these
critical
shortage
positions
are
being
used,
but
the
one
to
ten
percent
has
less
impact
and
the
one
month
will
have
a
bigger
impact.
Okay
and
very
importantly-
and
this
is
regardless
of
whether
you're
going
back
on
the
permanent
statutory
provisions
or
you're
going
back
on
these
temporary
non-codified
positions.
E
If
you
are
a
reciprocity
retiree,
that
means
you
excuse
me,
retired,
with
service
and
more
than
one
retirement
system,
for
example,
you
retire
service
and
trs
and
county
employees.
Retirement
system,
like
many
of
our
members,
have
you
need
to
observe
the
return
to
work
provisions
for
all
retirement
systems,
you
retired,
with
service
with?
So
it's
very
important.
E
We
tell
we
message
to
those
reciprocity
employees,
our
members,
make
sure
you
check
with
cers
and
us
before
you
return
to
work
and
make
sure
that
you're
complying
with
all
the
return
to
work
provisions,
including
their
required
breaks
and
service.
Because
again
house,
bill
1
is
unlike
the
previous
two
bills:
senate
bill,
1,
symbol,
25.
It
applies
to
trs,
only
not
kppa,
so
they
need
to
contact
kppa
because
they
might
have
a
longer
breaking
service
at
kppa.
They
need
to
observe
that
before
returning
to
work
for
a
school
district.
E
This
is
pretty
much
just
a
repeat:
it
was
on
the
last
slide,
so
I
won't
spend
any
time
on
it,
but
it's
just
to
emphasize
that
you
know
the
increase
is
from
one
percent
to
10
percent
and
again
employers
are
not
required
to
hire
retirees
into
the
critical
storage
programs.
That
is
completely
discretionary
with
the
school
district.
E
Okay,
this
slide.
We
get
into
a
little
bit
more
of
how
these
new
temporary
provisions
are
being
used,
and
this
is
the
critical
shortage
program
only
the
the
box
there,
the
gray
box
at
the
top
I'm
going
to
go
to
it.
This
is
critical
shortage
positions
only
again
where
they
can,
the
school
district
can
pay
them
anything.
They
want
to
there's
no
wage
limitation
under
the
original
permanent
statutory
return
to
work
provisions.
E
There
were
622
critical
shortage
positions,
allowed
statewide
34
of
those
were
being
used
or
5.4
percent
5.47
percent
of
all
the
available,
the
available
critical
shortage
positions
were
being
used
under
the
temporary
program.
We've
raised
that
from
one
percent,
or
at
least
two
positions
per
district
to
ten
percent.
E
Now
there
are
five
thousand
four
hundred
and
twenty
three
critical
shortage
positions
available.
Statewide
178
of
those
are
being
used
or
3.2.8
percent
of
all
available.
Critical
shortage
positions
are
being
used
currently
now
going
on
down
to
the
gray
box
below
that
one.
Just
some
more
data
about
how
critical
shortage
is
being
used.
E
Under
these
new
temporary
provisions
are
the
only
six
districts
that
are
exceeding
the
old
limitation.
So
that's
three
percent
of
the
employers
are
using
are
only
on
three
percent.
Employers
are
exceeding
the
original
critical
shortage
allocations
or
limitations,
and
that
translates
into
you
know
a
small
number
of
teachers
that
are
bringing
back
they.
You
know
they
feel
they
really
need
something
else.
E
I
want
to
point
out
here
and
there's
some
text
underneath
that
bottom
gray,
box
and
you'll
see
it
starts
out
of
the
1638,
and
this
is
full-time
positions
under
the
permanent
standard
return
to
work
program.
With
that
wage
limitation.
You
know
the
one
the
predominant
return
to
work
program
where
people
are
subject
to
a
wage
limitation.
There
are
with
a
three
percent
cap
1638
full-time
positions
available,
but
only
175
of
those
1638
positions
are
actually
being
used
by
retired
teachers.
E
Eleven
percent
of
those
available
only
eleven
percent
of
the
available
positions
are
being
used.
So
what
that
tells
us
is
teachers
are
not
going
back
full
time
and
employers
are
not
hiring
them
back
full
time,
they're
going
back
part
time
and
that's
going
to
be
mostly
going
back
part
time
and
substitute
teaching
positions.
E
Again,
this
is
just
a
highlight
that
the
temporary
changes
that
we
have
in
the
non-codified
language
and
house
bill
1
sunset
june,
30
2024.
At
that
point,
we
go
back
to
the
original
permanent
statutory
provisions,
the
one
percent
limitation
on
critical
shortage,
for
example,
or
two
positions
per
district.
The
one
thing
that
doesn't
sunset
doesn't
change.
If
someone
goes
back
now,
for
example,
they
retire
they
sit
out
a
month
and
then
they
go
back
to
work
before
june
30th
2024
and
they
met
that
one
month
in
break
after
june.
E
E
This
is
very
important.
We
get
a
lot
of
chance
questions
about
this,
because
there,
a
lot
of
members
and
even
some
employers
have
earned
an
impression
that
a
lot
of
things
changed.
You
know
more
things
changed
and
actually
did,
and
this
slide
shows
bullet
point
by
bullet
point.
You
know
what
doesn't
change
and
again-
and
I
know
I've
said
this
before-
but
it's
worth
repeating.
I
know
we
had
an
employer
out
there
supposedly
offering
retiring
members
opportunity
to
come
back
to
work,
but
the
irs
is.
E
You
cannot
have
a
pre-arranged
agreement
for
retiring
members
to
come
back
to
work
after
retirement,
whether
it's
a
certified
or
classified
position.
You
cannot
have
that
pre-arranged
agreement,
retirees
returning
in
our
standard,
you
know
predominantly.
E
A
G
C
E
E
Yes,
sir,
yes,
sir
I'll
speed
through
these
again
just
and
I'll
leave
two
things
here:
one
if
they're
a
restaurant
retiree
with
service
and
more
than
one
retirement
system,
make
sure
you
call
all
retirement
systems
you
service
them
before
you
go
back
to
work
two
also,
if
you're
going
back
to
work
for
a
school
district
and
you
can
get
health
insurance
for
them
or
any
other
employer,
you
get
health
insurance,
an
employer.
You
have
to
drop
your
active
trs,
your
trs
retiree
insurance
and
get
that
active
employer
insurance.
E
E
And
now,
let's
see
this
last
slide,
we
have
70
198,
full-time
and
part-time
members
eligible
to
retire
as
of
june
30th
2022.
I'm
so
we
have
73198
full-time
part-time
members
as
of
june
30th,
2022
eligible
retire,
8890
or
12.15,
just
some
data,
so
investment
performance,
and
this
is
for
fiscal
year
in
2022..
E
C
E
We
look
for
the
long
term.
That's
what
we're
that's,
because
we're
a
long-term
investor.
These
are.
This
slide
shows
unaudited
returns
as
of
june
30th
2022,
you
know,
2021
was
an
exceptional
year
with
nearly
30
returns
and
as
we
talked
about
it,
then
it
was
exceptional.
We're
not
going
to
see
that
every
year
it's
the
highest
return,
we've
ever
had
well.
2022
has
been
an
interesting
year
in
its
own
right.
You
know:
we've
had
a
lot
of
things
going
on.
E
We've
had
supply
chain
issues,
we've
had
inflation,
particularly
oil
we've
had
the
fed
response
to
inflation,
with
raising
interest
rates,
we've
had
russia
invasion
of
ukraine.
We've
had
china,
opening
and
reopening
and
closing
again,
we've
had.
You
know,
fears
about
recession,
a
lot
of
uncertainty
in
the
market
over
this
last
year
and
that's
reflected
in
the
returns
on
this
slide,
and
I'm
I'm
going
to
focus
on
the
bottom
two
rows,
starting
with
the
bottom
row.
It
shows
returns
for
the
quarter
and
various
year
periods.
E
Net
returns
for
trs,
and
this
is
for
the
retirement
annuity,
trust
the
health
insurance
trust
is
next,
so
the
bottom
left-hand
corner
net
return
negative
10.28
percent,
our
rating,
for
that
was
top
79
percent
in
the
nation
compared
to
other
large
public
pension
plans
lower
than
normal.
Again.
This
is
a
quarter
return.
E
The
difference
here
really
is
trs.
We
invest
in
private
equity,
but
we
have
less
private
equity
than
a
lot
of
the
other
public
pension
plans.
Private
equity
fared
better
for
this
quarter.
For
this
year,.
A
Well,
let
me
ask
you
on
that:
I'm
that's
something
a
number
I
don't
usually
see
top
79
percent.
Does
that
mean
only
21
performed
worse
than
yes,.
E
A
E
A
E
E
That
does
not
mean
that
the
assets
that
trs
has
are
bad
assets
it.
What
it
reflects
is
that,
as
is
typical
of
the
market,
as
we've
seen
throughout
history
in
certain
years,
certain
asset
classes
fare
better
than
others.
It
doesn't
mean
it's
a
bad
asset.
Some
of
your
stocks
do
bad.
Sometimes
domestic
stocks
do
worse
than
international.
Vice
versa.
It
doesn't
mean
it's
a
bad
investment.
It
doesn't
mean
for
that
time
period
did
not
do
as
well
next
year.
It
can
turn
completely
around
in
that
asset
class.
E
It
did
poorly
this
past
year
can
do
very
well
the
next
year,
so
one
year,
you're
going
to
see
the
same
thing,
a
negative,
eight,
nine
percent
top
seventy
nine
percent.
Three
years
out
six
point:
eight
percent
return
top
forty
five
percent
five
year
return.
Seven
point:
two:
nine
percent
return
top
thirty
four
percent
ten
year.
Eight
point:
five
percent
return,
top
17
percent
20-year
6.96
return.
We
don't
have
competitive
measures
for
that
period
of
time
and
then
blue
box
at
the
bottom
you'll
see
the
30
pound
30-year
compounded.
E
Gross
return
is
7.75
for
the
30-year
period.
To
always
say
that
is
a
gross
return.
It
doesn't
net
out
administrative
expenses,
but
administrative
expenses
now
are
very
low
about
30
hundredths
of
one
percentage
point,
maybe
a
little
bit
more
than
that,
but
even
going
back
that
far
before
we
got
into
international
equity
and
private
equity,
they
were
really
cheap.
Our
ministry
expenses
were
very
low,
so
30-year
compound
gross
return
to
be
very
close
to
that
7.75
percent.
You
know
maybe
very
close
and
again
markets
go
up.
Markets
go
down.
E
This
july
has
been
very
good,
and
it's
been
very
good
for
trs
looks
like
we're
going
to
be
up
about
five
percent.
Just
in
that
one
month
you
know
offsetting
half
of
that
negative
10
percent.
Don't
have
a
crystal
ball,
don't
know
what
the
coming
months
are
going
to
hold
for
us.
E
Don't
know
if
we're
in
the
start
of
a
rebound,
it's
not
atypical,
to
see
a
rebound,
some
rebound
after
a
really
bad
year,
but
just
don't
know
yet,
but
you
know
we
do
like
seeing
the
what
looks
to
be
about
five
percent
return
in
july
as
we
bounce
back
some.
E
This
is
the
same
slide,
but
for
the
health
insurance
trust
again,
just
kind
of
focusing
on
the
bottom.
Two
rolls
negative
10.47
percent
for
the
return
for
the
quarter
negative
9.67
for
one
year,
six
point:
six:
two
percent:
for
three
year,
six
point:
nine
percent
five
years,
seven
point
two
four
percent
for
ten
year
and
you
can
see
how
we
fared
against.
You
know
the
benchmark,
the
average
benchmark
for
those
investments.
E
E
E
The
top
third
reflects
cash
inflows
money
coming
in
the
middle
third,
as
cash
outflows
and
the
bottom
third
largely
shows
the
result
not
slowly,
but
mostly
of
those
cash
inflows
and
outflows.
It
includes
more
than
that,
but
you'll
see
the
results
of
that
and
with
this
on
the
right
hand,
right
right
hand,
side,
column,
we
have
fiscal
year,
21
2021,
so
we
can
compare
that
to
the
next
column
over
fiscal
year,
2022
and
I'll
start
at
the
top
line
cash
inflows.
E
You
will
see
that
member
contributions
from
21
to
22
increased
from
327
million
800
000
to
354
million
600
000
employer
contributions,
increased
from
1
billion,
147
million
to
1
billion
688
200
million
to
a
thousand.
That's.
You
know
largely
due,
of
course,
to
the
additional
479
million
dollars
that
was
was
received
at
the
end
of
the
fiscal
year
in
payment
of
the
greenbox
dollars,
also,
investment
income
and
again
investment
income,
that's
stock
dividends
and
interest
earned
on
bonds
as
what
we're
talking
about
there
that
increased
from
253
million.
E
Six
hundred
thousand
to
three
hundred
fifty
four
million
two
hundred
thousand
dollars
for
fiscal
year.
Twenty
two:
so
overall
cash
inflows
increased
from
one
point:
seven
billion
dollars.
You
see
there
to
two
point:
three
billion
dollars,
almost
2.4
billion
dollars
for
the
two
fiscal
years,
and
that
finishes
the
top
third
cash
inflows
going
to
the
middle
third
cash
outflows
we
have
benefit
payments
is
the
top
line.
There's
benefit
payments
refunds.
This
is
mostly
benefit
payments.
E
You
know
it's
retirement
allowance
is
going
out:
2
billion
260
million
600
021
increased
to
2
billion
332
million
600
000
fiscal
year;
22.,
that's
the
cash
outflow,
of
course,
the
biggest
one.
We
also
have
a
minutes
rate
of
expense,
12
million
600
000
for
fiscal
year,
21.
13
million
500
000
for
fiscal
year,
22.
that
increases
in
administrative
expense
and
trs
does
strive
to
keep
administrative
expenses
among
the
lowest
in
the
nation.
That
increase
is
due
almost
solely
to
implementing
that
new
benefit
tier,
that's
enacted
in
2021.
E
E
So
staff
spent
a
lot
of
time
on
this
and
we
need
a
lot
of
outside
expert
assistants
to
help
us
build
in
this
new
plan,
at
which
point
these
that
cost
will
not
occur
so
outflows
2.27,
2
billion
273
million
200
000
for
2021,
increasing
somewhat
to
2
billion,
346
million
100
000
for
2022..
E
Now
we
get
to
the
bottom
third
of
this
slide,
and
this
shows
the
top
line.
There
is
going
to
show
cash
flow
and
I'd
always
say
this
doesn't
tell
the
whole
story
about
the
health
of
the
the
trust,
because,
in
addition
to
these
cash
flows
and
cash
outflows,
the
size
of
the
trust
also
grows
depending
upon
just
the
gains
or
losses
in
value
over
the
year.
You
know
the
stocks
increase
in
value,
the
in
the
size
of
the
trust
increases.
E
That's
you
know:
that's
not
stock,
inter
or
stock
dividends
or
interest
in
or
bonding
interest.
That's
something
else
outside
of
that.
So,
even
though
you
have
negative
cash
flow,
for
example,
you
can
still
see
the
size
of
the
trust
increase
because
it's
the
value
of
the
assets
have
increased
so,
but
for
this
year
we
saw
a
negative
500.
For
last
year
we
saw
a
negative
544
million
800
000
cash
flow.
Okay
and
again
our
actuaries
have
said
that
is
within
a
reasonable
range.
E
You
know
at
that
that
that
level
given
the
size
of
our
assets-
and
it
is
manageable
for
us
now-
that's
what
our
investment
staff
tell
us
that
they
can
now
invest
because
we're
getting
enough
money
in
and
we're
very
thankful
for
that
with
the
additional
appropriations
since
2017
to
fully
fund
the
pension
fund
this
year
protect
you
know,
given
that
479
million
dollar
additional
dollars
coming
in,
which
again
is
a
great
time
to
receive
that
money.
You
know
down
the
market,
you
want
to
buy
low,
sell
high.
E
You
know
we
can
really
put
that
money
to
work
that
liquidity
to
work.
You
know
during
this
down
market
we
saw
not
a
negative
cash
flow,
but
a
positive
cash
flow
of
fifty
million
nine
hundred
thousand.
So
all
in
I'm
sorry
below
that,
we
see
what
happens
just
with
the
the
assets.
You
know
gains
and
losses
how
they
increase
or
decrease
in
value
of
course.
Last
year
with
that
amazing
return,
unique,
historically
unique
return
in
2021,
we
saw
gains
in
retirement
annuity
assets
of
5
billion,
763
million
600
000
this
year.
E
Of
course,
after
the
slides
I
just
went
over
the
negative
10
return.
We
saw
a
decline
in
value
of
assets
of
3
billion,
87
million
400
000.
That
doesn't
mean
we
lost
that
money.
That
means
there
have
been
a
decline
in
the
value
of
the
assets.
It's
only
a
loss
when
you
sell
the
asset
when
it's
low
right
now,
we
have
liquidity
again
thanks
for
thank
you
for
the
479
million
dollars
to
be
able
to
invest.
D
Sir
real
quick
question-
and
this
is
in
honor
of
reformer-
co-chair
representative
du
plessis-
he's
not
here
today,
because
if
he
were
here,
he
would
ask
this
question.
You
probably
know
where
I'm
going.
He
likes
to
talk
about
that
negative
cash
flow.
So
it's
fair
to
say
without
the
479
million
and
it's
479.2
million
that
was
infused
into
trs,
there
would
have
been
a
sizable
negative
cash
flow
in
this
year's
allocation.
Correct,
yes,.
B
E
E
that
top
number
we
started
the
fiscal
year
july,
1st
2021,
we
started
with
assets
in
the
retirement
annuity,
trust
of
25
billion,
935
million
eight
hundred
thousand
dollars
with
the
decline
in
the
market.
You
know
the
paper
value
of
those
assets
are
down
to
22
billion,
899
million
three
hundred
thousand
dollars
and
again
with
remember
that
these
are
short-term
numbers.
E
July
alone
looks
to
be
five
percent,
don't
know
what
the
future
holds,
but
we're
a
long-term
investor,
and
we
want
to
you
know
as
long
as
we
have
those
long-term
returns,
which
we
have
had
historically,
that
that's
where
we
need
to
be
that's
where
we
want
to
be
going
to
the
next
slide.
This
is
the
same
format
slide,
but
instead
for
the
retirement
annuity
trust.
This
is
for
the
health,
insurance
trust
and
again
it's
divided
into
thirds
top
thirds
cash
inflow.
E
You
see
an
increase
in
member
contributions
and
I'll
just
round
these
off.
187
million
dollars
and
21
to
205
million
22
decrease
in
employer
contributions,
184
million
and
21
to
141
million
and
22
recovery
income,
and
that
is
pharmaceutical
rebates,
federal
subsidies
that
we
recover.
E
We
spend
a
lot
of
time
doing
that,
trying
to
recover
money
to
help
pay
the
cost
of
the
benefit
120
million
in
2021,
and
increase
that
somewhat
to
145
million
in
2022
investment
income,
again
stock
dividends
and
interest
on
bonds,
six
6.7
billion
million
dollars
to
13.4
million
dollars
over
the
comparing
the
two
periods.
So
total
cash
inflows
increased
somewhat
from
499
million
and
21
to
505
million
in
2022.
E
cash
outflows.
We
see
benefits
declining
somewhat
here
from
310
million
900
000
to
306
million
800
000
administrative
expense
up
slightly
one
million
seven
hundred
thousand
to
one
million
eight
hundred
thousand.
My
recollection
is
that
we
were
a
little
short
on
staff
last
year
in
our
health
insurance
department.
They
spent
a
lot
of
time
not
just
answering
members
questions
but
keeping
track
of
the
recovery
income,
the
rebates
and
the
subsidies.
So
we
had
to
replace
some
staff.
I
believe
the
reason
for
that
increase
net
cash
flow
again.
E
This
fund,
it's
a
new
fund
established
in
2010.
It's
been
cash
flow
positive
from
the
beginning.
We
see
187
million
107
million
300
000.21
increasing
196
million
six
hundred
thousand
fiscal
year.
22
gains
losses.
You
know
the
value
of
the
assets,
foreign.
A
I'm
sorry
to
interrupt
you,
but
what
what
percentage
funded
is
the
health
insurance
trust
now.
E
We
are
at
about
60
we're
at
about
60
percent.
Now
I
believe
I'll
confirm
that,
but
that
is
as
a
result
of
we
were
above
that
and
then
we
had
that
most
recent
experience
study
where
we
lowered
the
assumed
rate
of
return
for
this
fund
from
eight
percent
to
seven
and
one
percent.
We
also
increased
mortality
to
a
teacher-specific
mortality
table,
so
we
saw
a
decrease
from
the
previous
year
to
the
fiscal
year,
ending
2021,
just
because
of
the
experience
study,
but
we
are
on
track
with
this
funding
coming
to
health
insurance.
E
Again
we
had
full
funding
for
health
insurance
in
this
budget
for
the
current
body,
and
we
just
and
we're
very
thankful
for
that.
We
are
on
track
to
have
health
insurance
benefit
for
teachers
fully
funded
in
just
a
very
few
short
years.
We've
got
to
keep
our
eyes
on
medical
inflation
and
trs
is
constantly
doing
things
to
help
keep
costs
down.
E
We
just
changed
our
formulary
to
the
same
one
that
uk
uses,
but
my
member
didn't
like
that
because
it's
you
know
it
didn't,
provide
everything
that
the
old
formula
did,
but
still
a
good
formula.
So.
E
E
This
is
the
last
slide,
mr
chair,
and
that's
just
just
I'll
explain
you
all
can
look
at
this
at
your
leisure
if
you'd
like
to
don't
explain
it.
This
is
just.
A
No,
that's,
that's
fine.
We
have
a
few
questions
and
we'll
wrap
you
up.
You
know
I
still
you
you
say
it's
healthy
to
have
negative
cash
flow,
and
I
know
you've
told
me
that
before
on
the
of
course,
I'm
I'm
still
not
a
not
a
firm
believer
in
that
negative
cash
flows.
On
on
the
on
trs
on
your
trs
return,
negative
cash
flow.
A
E
E
A
Assuming
great
return,
so
our
our
with
with
the
smoothing
from
the
goodyear
last
year
to
the
not
so
good
year
this
year,
are
we
above
or
behind
on
our
assumptions
above
or
below,
and.
E
And
I
do
need
to
qualify
that
we
are
we
built
in
immediately
the
new
assumptions,
the
seven
one
point
percent.
As
far
as
liabilities,
we
are
smoothing
in
our
budget
request
on
the
7.1
percent.
A
Okay,
so
I
guess
that
was
my
question
to
get
to
it.
Are
you
going
to
ask
for
more
money
if
you,
if
we
didn't
meet
assumptions,
when
you
do
your
smoothie.
E
Well,
it's
r!
It's
it's
in
his
the
co-chairs
pointed
out.
Returns
are
smoothed
over
a
five-year
period,
so
we
will
just
like
that.
Almost
30
return.
Last
year's
moves
averaged
over
30.
This
negative
10
return
will
be
smoothed
over
five
years,
so
you
know
we
have
good
years
and
bad
years
in
that
period
of
time,
and
you
know
that's
just
constantly
changing,
but
there
are
always
going
to
be
some
increases
based
on
changes
and
assumptions,
and
you
probably
see
some
increase
in
health
insurance.
A
E
Yes,
yes,
we
we,
we
have
proxy
voting.
We
use
an
outside
firm
that
does
a
lot
of
services
for.
A
E
E
They
they
send
us
that,
yes,
yes,
yes,
sir
iss,
they
send
us
those
proxy
vote
votes
that
they
are
reviewed
internally
and
they
make
recommendations.
And
then
we
look
at
those-
and
you
know,
usually
those
recommendations
are
in
line
with
what
is
good
for
business.
Was
it
good
for
the
business
of
that
company?
E
Sometimes
it's
not
good
for
the
business
of
that
company,
for
example,
there's
an
attempted
buyout
of
a
company
that
would
look
good
for
us,
because
it's
going
to
increase
the
value
of
the
shares
of
that
company,
but
management
and
management
usually
has
one
or
two
votes
on
the
board
that
are
going
to
not
like
it,
because
it
means
they
might
lose
their
jobs.
All.
A
Right
we'll
follow
up
on
that
at
another
meeting.
If
you
don't
mind,
I
hate
to
rush
you,
but
if
you
got
a
final
comment
or
anybody
have
a
question:
okay,
auditor
harmon
has
a
question.
B
Just
follow
up
on
that
proxy
voting,
I
know.
There's
some
concerns
you
were
talking
about.
Buyout
might
actually
make
the
stocks
go
up
higher,
but
you
also
have
to
be
careful
because,
if
they're
buying
for
an
esg
reason,
it
may
make
it
temporarily
go
up,
but
certainly,
if
they're
going
contradictory
to,
for
instance,
there
was
one
situation
where
they
took
over
an
oil
company
and
tried
to
divest
from
their
primary
source
of
income.
So
I
I
would
probably
suggest,
if
it
looks
like
they're
doing
it
for
esg,
I
would
vote
with
management.
E
A
Thank
you
for
the
question.
Bold,
thank
you
for
the
answers
we
hate
to
see
you
go,
but
thank
you
for
all
the
information
you've
brought
to
us
today.
We'll
continue
next
month.
We
have
two
other
presentations
we've
got
to
squeeze
in
here
before
everyone's
gone.
Thank.
A
Up
give
you
about,
can
you
give
us
a
cliff
note
version
on
on
yours
and
we'll
get
to
mr
we'll
get
mr
eager
a
few
minutes?
C
All
right
so,
for
the
record,
my
name
is
beau
craycraft
and
I'm
the
executive
director
at
judicial
forum
retirement
system.
I
do
have
an
abbreviated
presentation.
I
only
have
three
slides,
so
I
will
get
started
real
quickly.
We're
just
here
to
do
investments,
asset
allocation
and
cash
flow.
So
slide.
Two
is
just
a
quick
snapshot
of
investment
returns.
C
Much
like
you
just
saw
with
mr
barnes
and
trs
plan.
We
we
did
experience
negative
returns
as
well,
largely
driven
by
the
u.s
equity
markets,
we'll
see
on
our
next
slide
that
we
have
a
allocation
of
70,
30,
70
equity,
which
is
all
large
cap
u.s
equity.
And
then
we
complement
that
with
a
30
percent
target
to
short-term
government
credit
fixed
income,
it's
largely
been
on
the
corporate
side,
very,
very
minimal
governmental
bonds.
C
Looking
out
at
the
3
5,
10
and
20
year,
we
still
see
pretty
strong
positive
results
both
on
an
absolute
term
but
also
relative
to
the
benchmark,
and
you
know
inception
to
date,
which
is
a
little
over
25
years
for
these,
for
the
two
larger
pools
of
assets,
we're
just
over
eight
and
a
half
percent,
which
is
exceeds
the
actuarial,
assumed
rate
of
return.
C
Slide
two
is
just
snapshot
of
asset
allocation,
as
we
as
I
just
mentioned.
We
currently
have
a
target
of
30
70
equity,
30,
fixed
income.
You
can
see
we
have
a
small
exposure
to
cash
and
it's
actually
a
little
abnormal
from
prior
quarters.
We
generally
hold
very
minimal
cash,
but
with
the
rising
rate
environment,
we're
seeing
a
lot
of
a
lot
of
bonds,
kind
of
maturing
or
being
called
early,
and
so
it's
been
a
little
bit
harder
for
us.
C
You
know,
I
think
our
baird
and
trust
company
is
just
a
little
hesitant
to
put
money
into
the
bond
market
right
now,
so
we're
a
little
underweight
on
the
bond
side
as
you
can
see,
and
and
that
that
that
underweight
is
being
taken
with
cash
right
now,
that's
not
a
long-term
trend,
but
that's
you
know
kind
of
where
we're
at
in
the
market-
and
you
know,
we've
historically
been
a
little
bit
above
average
of
70
on
equity,
but
they
they
did
three
rebalances
in
fiscal
year
2022,
I'm
kind
of
with
the
expectation
that,
as
rates
rose,
we
were
going
to
see
kind
of
a
correction
in
the
equity
market.
C
So
we're
right
at
target,
you
know,
but
that's
with
three
rebalances
during
the
fiscal
year
and
then
lastly,
is
just
the
standard
cash
flow
template
just
real
quickly.
A
couple
of
things
I
would
point
out
is:
first
our
negative
cash
flow.
We
do
experience
negative
cash
flow,
it's
pretty
normal
for
our
plan
for
two
reasons:
one
we're
not
really
asking
for
much
from
the
employers
on
the
lrp
side.
You
can
see
in
that
second
row:
we've
received
no
funding.
C
C
That
request
went
down
again
in
this
current
budget
to
just
over
4
million,
so
we're
asking
for
a
little
bit
more
money
or
a
little
less
money,
and
so,
but
that's
largely
due
to
the
funding
of
the
plans,
and
so
as
a
plan
you
know
we're
fully
funded
are
almost
fully
funded
in
both
sides,
so
you're
going
to
experience
some
negative
cash
flow.
You
know
just
that's
the
nature
of
how
these
things
operate.
A
Do
we
have
any
questions
for
provo
see
none.
Thank
you,
sir,
and
I
appreciate
that
that
brief
report,
mr
eager,
please
give
us
the
sure,
cliff
notes,
version
and
and.
A
A
G
G
A
G
The
way
to
your
question,
yes,
we
use
ice
miller,
we
use
indianapolis
ice
miller
and
rob
goss
is
our
contact,
so
we
are
fortunate
to
have
steve
willard
with
us.
He
became
the
cio
on
june
1st
and
I
say
we're
fortunate
because
we
had
him
on
the
bench
he
was.
The
deputy
cio
he's
got
25
years,
experience
work
in
the
investment
industry,
working
for
invesco,
working
for
deutsche
investment
management
and
and
also
working
for
commonwealth
bank
of
australia,
so
that
we're
fortunate
in
that
regard,
we're
fortunate.
G
We
got
house
bill
297
last
year
which
allows
us
now
to
pay
more
competitive
wages
for
our
six
of
our
investment
positions.
We
have
three
of
them
filled
right
now,
so
that's
going
to
help
recruitment
and
retention
and
we're
also
fortunate.
We
got
a
pretty
substantial
amount
of
additional
funding,
both
in
state
police
and
k9
has
so
from
that
standpoint
it
was
a
good
year.
G
G
G
Well,
here's
a
perspective
on
2022.
It
was
a
tough
year
as
everybody
alluded,
and
this
shows
how
tough
it
was.
So.
The
u.s
equity
market
by
the
wilshire
was
down
13-2.
The
all-world
xus
index
was
down
1904.
The
bond
index
was
down
10.3
and
the
wilshire
tux
universe,
which
is
a
universe
of
over
100
public
funds.
The
average
one
was
down
10.6
percent,
so
it
was
a
tough
year.
There
was
no
place
to
hide
public
equity
may
have
been
one
area.
Real
estate
may
have
been
another
for
us
on
a
relative
basis.
G
It
was
a
good
year.
We
were
down
5.73
and
I
hate
to
say
a
good
year
when
you
look
at
a
minus
5.73,
but
in
light
of
what
happened,
it
was
a
good
year
for
us.
It's
the
worst
year,
we've
had
since
2009
when
we
were
down
17.2
and
we've
met
or
exceeded
our
benchmarks
in
85
of
the
1
3
5
and
10
year
periods.
G
Net
cash
flow
was
positive
in
all
pension
funds
except
cers,
9
hazardous,
and
that
was
negative
by
12.7,
so
pensions,
positive
cash
flow
and
that's
money
coming
in
from
contributions,
money
coming
in
from
dividends
and
interest,
minus
money
going
out
for
benefit
payments
and
expenses,
pensions
was
432,
not
including
215
million
for
the
state
police
and
insurance,
and
four
out
of
five
were
positive
insurance.
G
So
k-9
has
is
a
very
mature
plan.
We
have
less
than
seven
tenths
of
a
person
working
for
every
one
person,
that's
retired,
so
the
demand
for
paying
benefits
for
retirees
is
tremendous
in
that
in
that
plan.
And
and
how
can
you
be
cashflow
positive
in
that
situation?
You
can
because
the
contributor
contribution
rates
have
to
be
so
high
to
fund
that
so
we're
appreciative
of
the
changes
that
took
place
in
2019
and
increasing
contribution
rates
across
the
board.
G
Significantly,
but
that's
it's,
you
would
think
we
would
be
the
negative
cash
flow
person,
people
who
are
not
for
the
positivity.
A
G
Yeah
actually
my
point:
six,
eight
or
six,
seven,
so
yeah
and-
and
I
I
say
frequently-
I
don't
know
where
social
security
is
now
but
but
you
know
it
was
about
2.5
and
they
were
quite
concerned
and
and
all
around
the
world.
That's
a
number
that
people
are
looking
at
and
we're
in
dire
situation
there.
But
but
the
combination,
the
additional
contribution
rate
for
k9
has
and
the
move
to
fixed
allocation,
fixed,
fixed
allocation
funding
has
really
cured
that
problem.
We're
on
the
we're
on
the
right
track.
G
Number
two:
the
215
million
dollar
state
police
appropriation,
reduced
the
contribution
rate
from
140
percent
to
99..
That's
both
pension
and
insurance.
It
increased
the
funded
status
from
30.7
to
51.1,
so
they've
re.
They
can
recalculate
the
the
funded
status
for
june
30
2021
this.
This
payment
didn't
go
until
may
of
22.,
but
it's
in
there
and
then
and
the
the
they're
not
going
to
do
they're
not
going
to
do
a
new
valve
on
june
21.
G
But
the
if
you
look
at
the
liability
at
that
point
and
add
in
that
215
million
we'd
be
51.1
percent
funded
in
this,
and
state
police.
One
and
that'll
probably
go
up
a
little
bit
this
year
in
spite
of
the
spite
of
the
bad
market.
If
you
smooth
out
a
one
percent,
roughly
one
percent
return
two
years
ago
at
a
roughly
25
percent
return.
This
is
for
all
the
plans.
G
Last
year
in
a
roughly
minus
five
percent,
I
think
about
all
that
three-year
period.
All
the
plans
will
have
met
their
assumptions
or
they're
darn
close
k-9
hands,
I
think,
will
have
exceeded
it,
but
so
bad
year,
goodyear,
badger
smooths
out.
It
will
result
in
a
return.
It's
higher
than
the
five
and
a
quarter
for
canine
has
we've
got
a
number
of
allocations
that
are
outside
of
their
ranges.
If
we
get
enough
time
we're
going
to
get
a
little
more
specific
on
that
cash
infusions
that
have
not
been
fully
invested.
G
State
police
is
a
good
example.
It
came
in
may
15th
of
this
year
and
we've
got
215
million.
We've
got
a
lot
of
it
invested,
but
we
still
got
a
ways
to
go.
Real
estate
and
equity
targets
were
increased
by
the
board.
So
if
we
say
gee,
the
target
is
five
percent
and
you
got
five
now
we're
making
the
target
ten
we're
automatically
we're
out
of,
and
some
of
these
areas
are
hard
to
find
investments.
They're
illiquid
it's
it
takes
time
in
some
of
these
cases
to
get
invested
and
we're
making
process
progress.
G
If
you
looked
at,
I
looked
at
august,
the
5th
versus
june,
the
30th
in
all,
but
two
cases
we're
making
progress
on
reducing
those
variances
and
the
two
cases
we're
not
they're
they're
right
on
essentially
right
on
track
with
where
they
were.
G
Rates
of
return,
there's
the
negative
5-2
for
k-9
has
I'll
pick
the
the
key
ones
negative
five
nine
for
seeing
done
has.
The
reason
is
c9
has
is
a
little
more
aggressively
invested,
it
has
a
little
more
equities
and
it
was
a
lousy
year
for
equities
our
20-year
numbers
net.
G
These
are
all
another
fees,
28
years
6.5
and
30
years,
7.7
for
k9
has
6.6
and
7.8
for
okay
has
are
for
I'm
ce
cers9
has
six
point
six
and
seven
point
eight,
so
they're
in
a
ways
when,
when
you
look
at
the
longer
numbers,
as
I
was
sitting
looking
at
at
the
two
prior
presentations
in
their
20
and
30
year,
numbers
are
almost
the
same.
G
G
Very
similar
cash
flow
I'll
walk
down.
If
you
don't
mind
I'll,
walk
down
the
very
first
column
fiscal
year,
22
ke
rs9
has
we
had
member
contributions
of
89
million
and
that
dropped
a
little
bit.
We
had
employer
contributions,
we're
now
using
the
normal
costs.
G
G
Payroll
declined
by
50
million
dollars
year
to
year.
If
we
had
been
on
the
old
percent
of
pay
contribution
rate,
the
contribution
rate
for
the
pension
was
about
67
percent,
we
would
have
lost,
we
would
have
32
million
dollars
less
had
we
stayed
on
the
old
formula
because
the
payroll
continued
to
decline.
So
thank
you
all
for
passing
that
bill.
It's
just
been
a
savior
and
thank
you
to
representative
tipton
and
representative
wheatley
and
representative
miller,
who
is
here,
but
it's
gone
because
you
were
three
key
players
in
that
so
walking
on
down.
G
We've
had
some
secession
payments
this
year
from
kentucky
housing.
We
have
net
investment
income,
that's
dividends
and
interest,
it's
cash
flowing
in,
so
we
have
inflows
of
a
billion
259.
G
G
Yep,
let's
go
c
plan
is
slightly
negative.
You
know
we
don't
have
the
higher
contribution
rates
that
we
do
in
the
k
plan.
The
phase
in
is
completed
in
2022,
so
we
got
some
benefit
of
the
last
uptick
in
the
phase
and
insurance.
Not
this,
I
don't.
I
don't
say
it's
not
exciting,
but
it's
you
know
a
similar
pattern.
G
If
I
can
here's
the
question
you
raised
about
allocations,
I
would
say
so
we're
so
the
way
we're
each
doing
a
little
different
format,
same
information,
but
slightly
different,
comes
down
on
the
page,
but
we're
showing
here
in
this
case
we're
starting
with
cers
nine
heads
on
the
left
and
working
everywhere
all
the
way
over
to
state
police
and
I'll
walk
down.
Cers
9's.
G
If
you
would,
we
first
show
the
actual
as
of
june
30th
45.99
for
public
equities,
the
target's
50
and
the
range
is
35
to
65.,
and
so
the
numbers
in
red
are
the
ones
that
where
we
are
outside
of
the
range
now
we're
going
to
be
able
to
be
above
and
below
targets
all
the
time
based
on
maybe
a
variety
of
things
that
could
including
cash
flow.
G
But
it
may
simply
be
we
want
to
be
underweighted
or
want
to
be
overweighted,
and
I
don't,
I
think
the
real
issue
for
I
think
for
ppob
is
when
you're
outside
of
the
range
the
approved
range.
That's
a
that's
a
red
flag,
so
they're
they're
so
noted
here
and
I'm
gonna.
Let
steve
speak
to
some
of
these
especially
credit
we're
at
2103.
G
The
range
is
7
to
13
for
c
real
return,
we're
397
the
range
is
9
to
17..
Moving
over
to
k
non
has
we're
in
cash,
we've
got
13
percent.
The
range
is
zero
to
10.
and
steve's,
going
to
speak
to
what
why
that
is
and
what
we're
doing
about
it.
Real
return,
3
versus
7
to
13
and
down
at
the
bottom
real
estate,
564
versus
7
to
13.
G
and
then
k
hazardous,
has
more
especially
credit
core,
fixed
incomes
slightly
over
the
top
of
the
target
cash,
real
return
and
real
estate.
G
And,
of
course,
state
police
is
the
one.
That's
got
the
big
number
we
are
at
24
in
the
state
police
versus
a
range
of
zero
to
ten.
We
we
took
in
215
million
dollars
and
that
changed
the
allocation
substantially,
so
it
all
comes
into
cash.
Cash
allocation
goes
from
a
relatively
small
amount
to
a
great
big
amount
and
we're
working
it
back
down
and
we'll
speak
to
that.
Am
I
going
too
fast?
G
Okay,
that's
insurance.
Insurance
is
essentially
the
same
as
pensions,
so
there's
a
there's
a
slide
in
there
for
insurance.
If
you'd
like
to
look
at
variances
but
they're,
almost
identical
to
the
pension,
almost
they're
pretty
well
represented.
So
here's
some
of
our
comments
about
pension
variances
and
I'm
going
to
throw
I'm
going
to
steve
tosh
to
test
the
podium
to
you,
steve.
B
All
right,
thank
you
appreciating
everyone's
time,
I'll
try
to
be
as
as
brief
as
possible
and
and
just
to
hit
the
highlights
on
these
slides.
B
As
dave
mentioned,
there's
a
number
of
asset
classes
across
plans
where
we
are
outside
of
the
allowable
ranges
and
those
have
been
for
a
variety
of
reasons.
Cash
flow
experience,
we've
had
changes
in
ips
allocation
targets
and
ranges,
especially
given
the
separation
of
kers
and
the
cers
and
adoption
of
new
allocation
targets
and
ranges
which
resulted
in
reduction
in
some
asset
classes,
increases
in
other
asset
classes.
Some
of
the
asset
classes,
especially
those
in
in
more
private
markets,
take
longer
time
to
shift
those
allocations
and
that's
especially
evident,
in
especially
credit
and
especially
credit.
B
You
can
see
for
the
cers
that
the
new
ips
allocation
targets
were
decreased
by
five
percent.
At
the
same
time,
you
may
remember
there
was
an
opportunistic
allocation
that
allocation
went
away
in
the
assets
that
the
majority
of
the
bulk
of
the
assets
that
were
in
that
opportunistic
allocation
were
shifted
into
specialty
credit,
and
that
was
about
300
to
350
basis
points.
So
three
three
and
a
half
percent
shifted
from
opportunistic
to
specialty
credit
which
increased
our
allocation
there.
B
I
think,
probably
the
the
most
important
thing
again
in
in
light
of
time
is,
I
think
I
probably
have
a
little
bit
of
a
philosophical
difference
than
maybe
how
things
have
been
managed
in
the
past,
and
that
really
is
we
work.
The
investment
staff
works
with
the
investment
committees
and
the
boards
to
establish
those
allocation
targets
and
the
ranges
and
really
that
range
is
the
discretion
that
the
investment
committees
and
the
board
has
granted
the
investment
staff
and
that's
really
the
the
area
where
we
should
be
able
to
operate
in
the
investment
discretion.
B
So
while
we
have
a
number
of
searches
underway,
we
have
some
some
committed
capital,
especially
in
real
estate,
about
three
to
four
percent
300,
sorry
300
to
400
million
in
committed
capital
that
has
not
been
called
so
that
will
get
called
over
time
and
you'll
naturally
see
that
allocation
increase.
B
We
have
active
searches
in
the
real
return
space,
we're
looking
at
opportunities
with
existing
managers
and
new
managers
in
the
private
equity
space,
but
I
would
anticipate
going
forward.
You
will
see
us
within
the
range
not
as
dave
mentioned,
not
necessarily
at
target
we'll
will
be
shorter
or
we'll
be
implementing
tactical
views
within
that
that
allocation
range,
but
our
desire
going
forward
is
to
to
really
be
operate
within
discretion
within
those
ranges.
So
I
would
anticipate
over
the
coming
quarters.
You'll
see
all
of
our
asset
classes
move
to
within
that
range.
Yeah,
okay,.
A
A
Your
new
position
and
look
forward
to
working
with
you
thank
you,
mr
eager
and.
G
Tier
three:
I'm
sorry
senator
that
senator
there's
not
here.
Let
me
explain
this
tier
three
has
a
five
year
averaging:
that's
when
people
get
paid
and
I'll
tell
you
the
two
or
three
people
watch
every
year:
what's
the
rate
going
to
be
they're
going
to
get
and
they're
probably
we're
worried
this
year,
but
it's
got
a
five
year,
smoothing
up
up
top
the
top
two
rows.
G
17
through
22
are
the
five
year
ending
that
17
five-year,
ending,
18
and
so
forth,
and
you
see
seven
seven,
seven,
five,
five
fairly
stable
because
you're
doing
a
five-year
smoothing
which
is
perfect
for
that
tier
three.
The
bottom
row
is
the
four
percent
plus
75
percent
of
the
gain
over
four
percent.
That's
the
formula.
You're
gonna
get
four
percent
you're
going
to
go.
So
if
you
look
at
624,
the
upper
right
cers
five
year
was
624
this
year,
so
they're
four.
Those
are
two
point,
two
four
over
the
four
percent.
They
get.
G
A
Thank
you
very
much
and
my
apologies
for
cutting
you
short,
we'll
put
you
we'll,
put
you
on
first
the
next
time
and
give
you
plenty
time.
I.