(clearing throat) >> great this meeting is reported and you may begin the retirement board meeting of wednesday, february 14, 2024. at this time. >> councilmember fosle present. >> vice president thomas thank you, we have quorum. >> first item. >> >> >>

board will hear remote public comment on each agenda item in the order that commenters add themselves to the queue to comment on the item. take public comment for in-person and people attending did mit remotely opportunities to speak during the public comment are available by via calling. >> phone number: +1 (415) 655-0001 access code: 2 (662) 712-5389 access code: 2 (662) 712-5389 # # to raise your hand, press practices are to call from a quiet location, speak clearly and slowly, and turn down your television, radio, or computer. turn counsel our tv or convert and please note policies along with the codes prevent bad

conduct and it is only on matters within the jurisdictions of this body thank you for joining us. >> yes. those would like to speak step to the podium. >> [off mic.] sanchez i'm president of the benefits i'd like to welcome trustee board member engardio and i want to um, mention that, you know, i've had issues where i had to talk to somebody you call customer service and guess what someone picks up or alleviates a message they get

back to you within an hour it is wonderful their service and you might remayor of or become a partner at city hall don't think that it is sent to us you have to file it over here as service to let people know make sure you file 2 here and once again thank you for all you do a great organization. thank you. >> (laughter.) >> thank you for your comments. >> anyone else in-person like to make a comment? >> a reminder to callers employees star three to be added to the queue seeing none, moderator, any callers on the line? >> yes. madam secretary three callers on the line.

>> state your name. >> i'm kevin that is mc like that all a people of color in san francisco. and february of 2020 i was crushed between two vehicles by a mentally unstable person and in april of 2021 i applied for the industrial benefits and yesterday owe got an e-mail regarding my declaration of residence. i know that people retired two years after me have gotten their benefits three or two or three weeks ago but the worse system for appeals for hearing for applicants for i dr is 60 months that is the los angeles and san francisco is twice as long as is

second worst place and 4 or 5 times than the afternoon in the st. patrick for the retirement system the board job to make sure the system runs efficiently and they have an audit of the system to see where why it takes san francisco employee's retirement system so long that's your job at the board to find out why this is happening it is ridiculous people wait three years to get a hearing date for their retirement. i don't understand that this is the worst system in the state of california and you guys need an audit i asked for an audit to see if it is happening you guys are responsible to take care of people you serve. >> sir -

>> thank you for your call. >> we have one in-person public comment. go ahead. >> good morning. my name is alisa with the private equity we're to the - i'm here because the retirement system is with the black stone penn a troy con and single-family homes and black stone the largest landowner and this acquisition makes black stone the largest owner in the u.s. with 66 thousand homes this acquisition will harm tenants and in light of black stones crises investors

should tell people not not to invest unless has a standard for protecting investigators and renters from reich's evictions and other predatory practices black stones own h pa the largest landowner landlord the report is about complaints from maintenance problems and with an first time of tenants buy their homes and the tenants are paying rents 10 percent higher than than market rent and black stone is is a multi family landlord in 2021-2022 with the real estate empire 200 thousand units you. >> 30 seconds and western then

since they increased the rent by 34 percent largest than any san diego. the increase at some believes is greater up to 76 percent we urge you to tell black stone not to vest. thank you. >> thank you for your comments. >> we have another public comment? >> go ahead. >> good morning, everyone and we were here last year my name is fernandez do and for the last two years in the housekeeping department and here local 11 i'm here to urge you to a telephone any investment black stone - as

as you can see since july 4th over 50 hotels - and more have participated outside of the workshops work places we are fighting for our future for the retirement. my coworkers and i go to work everyday and because i (unintelligible) um, that is for ucla i'm trying to build a better life. i live from paycheck to paycheck and worried about how to pay my bills each

month and fighting for your further for my son i know what my (unintelligible) and how to fight for what we have. strikes and boycotts are not good to bus that's why we're coming to you, you are responsible for making sure the investments are wise and the ones for the beneficiaries and we have filled contracts about - they can't say wiring asking for too much but all a this money they've agreed to pay living wages we want you to consider a labor dispute we are going to have to keep on going back o going having strikes here and this thank you

for your time. >> anymore in-person one more. thank you. >> good morning. my name is crystal clear you are work as a cook in the restaurant and for black stone i was here on a december to speak before the board. the department didn't contain the space i wish i could move somewhere better but we pay rent i don't make anymore near that much not making enough to afford healthcare. >> haven't seen a doctor. >> i make too light to afford the necessaryist but too much for rich.

>> do you know what that feels like and i'm asking you to imagine my coworkers hold pick the lines outside of sheraton we want to contracted we deserve the federal unfair labor charges and including disciplining workers and part two in engaging in unlawful activities protected um, union activities. i testify in arizona and san francisco and california regarding did problems those are the opinions, vote, i, i. and no, no. at the sheraton they know that presents a risk to their investment and over the past 5 probation officers we're

asking; right have you reached out to black stone? if not because you disagree? about our investments if so what response will have you received? >> thank you very much. thank you for your comments anyone else? >> thank you. >> a reminder any callers press star three to be added to the queue seeing none, moderator, any callers on the line? >> one more caller on the line. >> thank you caller state your name you're too minutes begin when you speak. >> good morning this is pie hudson with local 2 and we have been speaking with you for is last several months about the labor disputes in california and san francisco. the good news that 35 hotels have reached ten

active settles with the locals that provide affordable benefits for the staff and workers unfortunately, black stone has been unwillingly to the same standards as hotel and a ongoing pick the lines black stone is as outlier for potential risks. we urge sfers to demand black stone resolve they're issues for hotel workers. >> and we are invested in a group that owns the hilton resort hilton 3ik9d the hotel amuses of times protesting low

wages notes equally the cost of living and creates potential reputation allies now the las vegas restraining order resort is for sale and the risk for the working for sale price and returns to investors not a policy. and we have asked at appraiser meetings board members and abashes deserve to know if the investors have engaged with the black stone managers and what further steps to be taken. >> thank you for your comments. >> seeing none, moderator, any callers on the line? >> madam secretary another caller on the line.

>> >> please, state your name and the item(s) you wish to speak on. >> two minutes begin when you speak. >> hi, my name is alex sanchez an employee of city and county of san francisco and last year um, the retirement system allows allowed for military um, prior military service credit if you purchase the credits towards the retirement system. um, but the retirement calculate online didn't allow or will not take into account the purchase of prior public service. so therefore um, if i pay the amount that i'm told i would owe i can't get um, a number for what the compensation for

purchasing the service. i plan on vesting service route and i can't get a number a figure of what the compensation will be for purchasing my public service. is there some way that um, if can be addressed i'm purchasing 6 years of military service and costing a considerable amount of the money there is no indication what the compensation will be and i can't seem to get any answers i've gone through any union local 6 they're working on that. >> 30 seconds remaining. >> so i'm looking for answers please. thank you. >> thank you for your call seeing none, moderator, any

callers on the line? >> madam secretary, there are no callers on the line. >> >> public comment is closed. >> . >> 4. action item approval of the minutes of the january 10, 2024, retirement board meeting. >> i move we adopt the minutes. >> second. >> thank you moved and seconded. >> public comment? >> >> do we have any in-person comments? seeing none, callers a reminder to press star three seeing none, moderator, any callers on the line? >> >> madam secretary, there are no callers on the line. >> public comment is closed. >>. okay. moved and seconded. >> all in favor, say "aye." >> aye. >> opposed? say nay if for the the motion

passes. thank you, next item. >> 5. consent calendar. action item. >> any commissioner want to adopt the consent calendar. >> public comment please. >> do we have any in-person comments? fired. >> madam secretary one caller on the line. >> thank you caller state your name two minutes when you begin to speak. >> my name is kevin mcpherson i see on the applicants get their whole industrial so it is potential to hit the three year park to get mine back you should

demand black stone to have their statements expedited so people don't wait three or four years because is this is done in 5 months 5 percent at at minimum minimum retirement on i dr we waited 5 months i waited one month for 52 percent i should have waited 5 months with no tax than to wait one month and 62 percent that is unfair people have to wait and everybody seems to - except the people sitting here and myself. >> sfoirdz. >> madam secretary, there are no callers on the line. >> public comment is closed. and madam secretary, call the next item.

>> 6. investment calendar: discussion item. investment committee report. >> thank you. >> did we have a vote on the consent calendar. >> okay. >> no, we didn't i'm sorry, i'm sorry. >> my fault. >> okay. moved and seconded now. >> all in favor, say "aye." >> aye. >> opposed? motion passes. now we can move to item 6 on the consent calendar. >> on the investment calendar. >> yep. >> thank you, mr. president. this committee was able to meet thanks to the members that attended for the presentation by staff at wilshire an informative

time we learned quite a bit and discussing the assumptions rear yard the risk factors and we know that is challenge for quorum and attendance has been, of course, time allotment for a dense meeting want to gratitude to all the members in attending that and gratitude to staff at wilshire for presentations. >> great. thank you. >> okay. [off mic.] >> public comment. >> >> do we have any in-person comments? seeing none, seeing none, moderator, any callers on the line? >> madam secretary, there are no callers on the line. >> thank you, here we go none public comment is closed. >> next item please madam

secretary. >> 7. discussion item. proxy voting report. >> good morning commissioners um, as is you recall from the update no december there are three pilars for this and round about them visible from right to left in the way it was presented we have coalition and working groups like the p r i and e s g we take into account the matters into the elevation of time managers in terms of strategies how they manage the firms and finding active ownership to influence

the outcomes and improve the long terms financial market portfolio. within active ownership three tools engagement engaged with companies, comment letters focused on regulatory and policy matter and proxy voting the opportunity for shareholders to vote on election directors and executive compensation and mergers and proposals made by shareholders to today as we do each year two proxy items the first is a report and review on proxys in the calendar year and the action item recommendation of certain changes to sfers guidelines and i'm going to turn it over to andrew. >> thank you kurt and good morning, commissioners. um, each year we present a report on

general observations from the shareholders during the prior calendar year prior proxy as it is referred to and telling you how sfers voted during that period as well within you are portfolios on the underlying securities and the reports i'll highlight a few key aspects so in if we voted on the 14 thousand proposals across the portfolio. this is approximately the same number we voted on in 2022 and a a little bit more than half in the u.s. and canada the rest the answer within europe and china and others markets and the did in general 2023 proxy similar to the prior years and shareholders focused

on board accountability and for lack of the board diversity and loves director dependence for the compensation which is something the shareholders have been able to vote on since frank similar to prior years and - but the number of sales on boats with the voting items called down from the prior year 6 percent. the most notable tour the shareholders on environmental from major shareholders and then also the rise in what people call anti u s b proposals filed by groups that stop or file s g activities

typically receive - we continue to apply our same guidelines and very much material we vote against is compensation proposals and with miss alignment between the companies and the awards to executives. and we continue to vote against boards with aggregate the lack of diversity or other concerns and last year, we supported half of shareholders proposals were filed and then continue to believe this is a strong mechanism for shareholders to raise material topics i'll stop there so the board can see market observations and quantitative details on the record i'll be happy to answer any

questions you may have. >> i have - go ahead. >> i'll ask - >> thank you for the report. um, do you have a sense i was trying to had had research on the environmental side it is very interesting considering the kind of the direction of the global direction and surprisingly what is coming up. >> yeah. we - conducted market observations we don't quite know um, i think that observers cite one a lot of proposals i understand up getting withdrawn if companies they see resolutions those topics are still raised before they go to vote i think that anti s g

backlash a view of some shareholders the consent of the proposals filed is overly prescription for companies or chiu's to micro manage the board or. (off the record.) to hard to support those proposals than in prior years and major shareholders explain their rational and others don't. >> (multiple voices). >> i thought that was very interesting. kind of a trend we didn't anticipate. >> exactly. >> can i jump in on that subject 92? actions speak louder than words but their actions are starting to be not addressed and

franchisee foreclose things like that - not all the e s g but some of them i'm wondering a yes or no do you see that - i'm just, you know - knee-deep in it. >> within corporate e s g practices? >> well yes, sir. the impetus by shareholders is recruits involved 78 that can effect the 14r8dz direction so and as well as the internal partitional people seeing what e

s g has done with whatever has been done. i'm really wondering. >> because i'm sort of away from it and - but - involved in looking at it is it as big - not as big - but moving in the direction (unintelligible). >> i think in general we are seeing strong support for corporate social responsibilities and focus on 19 so-called the e s g with the subsequent or using of terminology in the e s g terminology. but um, i would say in gin phil back in terms of shareholders work for those general (unintelligible) but the

mechanism i guess to board member bridges point of shareholders proposals last year no change no support but like i said the anti e s g proposals called into question the value or as suggested by resources put towards climate received very, very low support so um, single digit shareholder support that is the fact that shareholders are recommending companies stop those types of activities or focus of their strategy. >> (unintelligible). >> yeah. you first of all, some of the companies we're voting on because we own the shares with the index funds?

>> yeah. >> okay. >> - >> (multiple voices). >> yeah sometimes, it occurs that way. >> the next question on governance category 2 groups people are not getting the votes the right to do that mayor henderson the management has guess right to do f that have you asked another investors to write a letter or let that? noted and will effect the future support but we've not- >> (multiple voices). >> i'm concerned about that where there is no independent direct i have had you done an engagement on those issues but more importantly the company works well without the - i'm

wondering all the work and status. >> we've not engaged on a single topic like that but in dial with a company a director maybe something we talked to the company about and i think you're alluding to come back a case by case strong indication though our view is in the best practices to have this structure. >> okay. a suggestion will be again not i'm trying to make more work for you but the time we discovered working with kurt's team is gathering company where the leading director we wanted to vote but notice the performance is down you connect the performance maybe that's

where we call our manager i'm trying trying - >> noted. thank you. >> i have a question about some of the shareholders proposals in reading and find more than went to vote but support is there a structural explaintion or a ebb and flow every few years or a change that allows smaller groups to bring less popular proposals to vote? >> in terms of the number were i filed. >> more that went to vote offer this last year but fewer. >> (multiple voices.) >> and yeah. structural a change that loud the less popular issues to get to vote.

>> the sec posture effects that companies are able to presentation to the sec basically ask them to be excluded for the ballot and more favorable to shareholders less likely to accept a no action request from companies. so this probably ruled in an increase in those that went to vote. and then the anti e s g proposals were more of those, too which would be captured within the shareholder proposals. those get report very low average support that will affect the average support for shareholder proposals. as well. >> so i think there is a couple yeah. a couple of things

going on there. >> thank you. >> any other questions or comments? >> >> (multiple voices.) >> and a discussion item. >> yeah. decision item. >> on the report we have a second item after this for the - >> (multiple voices.) >> and by this item the proxy vote in the presentation. >> call for public comment. >> thank you, seeing none, moderator, any callers on the line? seeing none, reminder to press star three to be added to the queue and moderator, any callers on the line? >> madam secretary, there are no callers on the line. >> thank you hearing none, public comment is closed. >> and approval of proxy voting. move that the san francisco employees' retirement system approve the sfers proxy voting guidelines for 2024.

>> um, so on an annual basis we bring to the board or question to reaffirm our governance guidelines that we eye to cast the votes we're discussing and recommend we bring chances recommended changes to the board for your review and approval. um, through this year we are proposing 7 updates to voting guidelines all of which i category its are minor in nature and 6 of them recommended changes for which the director of elections we vote on the directors three of those those are expansion of exciting guidelines for companies in the portfolio and the three new updates for expectation for shareholders and management of enter security and

take over attempts we provide a memo excludes the arranges and a red line version for the changes as well as the type of updates and then a clean version that will be to adopt and implement following the boards vote. i'll be happy to answer any questions you may have. >> open process or any of the changes of you have them and. okay. >> i have i do have a quo that residential hotels directly to

the oversight of cybersecurity and the words in this procedures you presented where do they come from did you guys do it individually or consultants? >> i mean, you found. >> yes. so several of those we've worked with our proxy research procedure. for um, guidance and language in terms of how he implement the voting guidelines so this was something they recommended and we at a later date the voting guidelines appropriate for our for the purpose to implement in the voting guidelines. >> it is and maybe we're doing

i'll plead ignorance which we're doing our due diligence is the cybersecurity subject part of it? >> somewhere in the in whatever due diligence? >> we can skrnl get back to you with the specific question but happy to follow up yes specifically- >> (multiple voices). >> it is beyond but what can happen in the corporate sorry - and two broadly answer your question we talked to the commissioners before when we make investments we make due diligence and work with the outside consultants a big component is the review of the

fund or capability in the cybersecurity area. >> great. thank you. >> any questions? comments? >> if not. thank you. >> this is an - (coughing). >> discussion so let's. >> yeah. this is an action item to adopt. >> yeah. >> adopt yeah. >> so we'll have anybody wish to make a motion? >> yes. >> i move we adopt the recommendations for the approval of the (coughing). >> second. >> public comment? >> >> do we have any in-person comments? sfoirdz.

>> madam secretary, there are no callers on the line. >> thank you, hearing none, public comment is closed. >>. okay. moved and seconded. >> all in favor, say "aye." >> aye. >> opposed? motion passes. next item, please. >> . thank you. >> >> 9. discussion item chief investment officer's report. >> commissioners the plan assets stand at approximately three 4 plus $5 billion to date through january estimate at 6.1 percent and i wasn't going to go through the details we did that a little bit last month i'll cover the investments we have for the record. so you'll see in the materials um, under our delegated authority invested $25 million in two but the san

francisco investors to the fund the investments closed on january 1st, 2024, and classified within the portfolio. next under the delegated authority for the investment of 60 and closed on january 11th an infrastructure investment within the asset portfolio and it is for second investment with the capital partners. next milestones real estate investors delegated authority up to $70 million for the investment classes in 2024 and this is clarified as real estate investment within the portfolio and it is the second investment with milestones group the partners at the board meeting on

january 19, 2023, the retirement board viewed in closed session to the center partners team (rustling of papers.) we committed $50 million on february 3rd for the board meeting in february and january 31st, 2024, we closed an additional $15 million for the commitment up to $5 million. and then finally late breaking news in the packet not there but one more closes transaction under the delegated authority invested you 75 for the credit fund that closed on february 12, 2024, and the investment is clarified as real estate investment with the

partners i'll be happy to answer any questions you may have. >> where is it located? [off mic.] you washington, d.c. >> thank you for your report and next item, please. >> public comment. >> i'm sorry. >> we have. >> do we have any in-person comments? reminder to press star three and seeing none, moderator, any callers on the line? sfoirdz thank you, hearing none, public comment is closed. >> next item, please. >> >> 10. administration calendar: discussion item operations oversight committee report. >> yeah. operations oversight committee met on january 31st and at meeting the m go present

the financial statements and go highlighted their opinion on the financial statements and all the materials are narcotic fiduciary with the principles the audits report by the operation operations oversight committee outlined in committees terms of reference. and the committee reviewed the proposed financial year 2024-2025 and 2025-2026 budget. after engaging in the discussion, and reviewing it carefully the economy brought forward to be forwarded to the full board for approval. >> thank you. >> commissioners questions or comments for the operations oversight committee if not. >> do we need a motion to

accept the report? >> no a decision item only. >> we're on item 10 or 11. >> 10. >> public comment please. you. >> do we have any in-person comments? seeing none, moderator, any callers on the line? callers phrase star three and. >> madam secretary, there are no callers on the line. >> thank you, heather public comment is closed. . thank you, next item please. >> 11. action item. approval of the department budget for fy2024-25 and fy2025-26. >> commissioner time flies i don't know how we're here again by the time of the year approval for the budget. and as commissioner mentioned a very good discussion

with the operations oversight committee but it is important to share some of the same comments with the operations oversight committee with regards to the budget and to start when i want to acknowledge the hard work at sfers and putting together k - and in front of i has been each of the units work hard on the budget special thanks to christian lee in getting who led the project and with respect to it. it is big process. um, but no know it is the input from many of the folks here at sfers what we put before you in alignment with the plans. that

we developed and gained your approval to last year. (coughing). >> so additionally for the executive and legislative committee for the budget this is a second budget i'll be presenting to you and since this time we put the strategic plan in place and brought on braid shawn to assault the program and in doing so he rolled up his sleeves and talked about what we want to go in the future. and liquor store karen and i had another year to evaluate and we made changes on the retirements services and great leadership vomiting the needs that rfbtsd the two year valuation of the business and more importantly where we want to take the business going forward and we successfully managed the 36

millions of dollars in assets and focus on any comments the couple of areas have an ask we tried to be conservative in all our expenses a couple of areas we have business needs the first on the retirement side we talked about this extensively last year about the head count and you approved a two-year plan to address counts to the retirement team i can tell you the additions in the budget year made a tremendous difference that only our ability to get the day to day jobs done but to build the morale of the team and the needs we want to continue on that path and row firm and get our refiscals approval - we want

to position for the long term and evolving the platform is a many, many year process. but there are things we need to do today to set up the improvements and things to do today to mitigate the risks critical so we can lay the foundation. those goals are in the areas of resiliency so and documentation to be able to leverage the technology that is out there we need to document our workload and the data we have so we can use improvements that is important for steps and it is a step if you talk to my company going through the evolution will need to take we need to - it is important we

don't get those so far behind we have a platform note supported and consider the development we live in a day and age a web interface with our member portal and having in house k35b89 to address those and move for more opportunities for self-service this is a area to focus taking all those together that leads to a budget ask i oumentd in detail in the materials we're asking for support to be able to transition um, some of our mromdz to update our application and asking forehead counts for 4 ftes a project more a panelist and others i can tell you for a

fund managing $36 billion and for serving as many members those are standard for our types of business will help us deliver by mitigate risks to something that i think it is important in this day and age like cybersecurity. before i move on to the needs happy to pause for any questions? specific to it. >> no, but not a question but i'd like to make a comment and i'll make this comment and then president of the board is speaking to all the members as well as our staff. we are charged with as (coughing) our ceo comments about the (clearing throat) 36 well 36 and

a half quarter million dollars that is a big number. and in my career i see a lot of companies approaching the issue of cybersecurity. technology, and maximizing the efficiency there the new technologies that are available. (coughing) i could go on for page not just having all the bells and whistles this is protecting our rear end but having our thoughts determinations of how we're purporting our business and protecting the employees and assets this stretches the information technology and i'm going to jump a little bit head on the issue of lease and that

necessary ftes to accomplish the plans that our staff is putting together and diligently. they've been challenged during this budget period. specifically because two a number of major items. i.e., we don't have a lease so - we know within reasonable certainty what it is but don't have that. so you've got to put a factor to make sure you don't go over but the plus factor can be rich got to stick to the plan so i won't say no

more but watched the current leadership struck of sfers for a year and a half but i had a good feeling a year ago i have a great feeling right now that we have the right people on staff assigned in the chair making the decisions in the context of everything in the budget as well as operations. as well as fiduciary responsibilities and i can only say i'm sure i'm speaking for the board. thank you. for your efforts and all the staff and everyone associated with sfers. and the last thing i'll tell you to the members this place will be rock solid in terms of all the things that ceo has been talking about

improvements of our site easier to get to and also the cybersecurity which is the number one the thing to. thank you. >> any other comments? >> yeah. >> go ahead and go ahead, go ahead. >> thank you. >> um, similar to what 23e68dz seeing the budget process and staffing progress over the last couple of years been lightning for me, i appreciate that staff we saw it last year with an emphasis on plugging gaps in areas we need to staff up to meet the requirements of organization and seeing, i.e., in the future where we'll need staff in place to provide it going forward i appreciate the thoughtfulness and a call to

this i'm happy to see we're going by the plan in place. i know last year we were looking to staff up the organization we definitely invested heavily 200 in staff especially public safety staff and regarding the new talent are they all line staff management included what the percent. >> line staff and good to hear we're investing especially in the day to day needs and i know there is a lost research into the resources to make sure we um, improve the technology. for the organization as we talked about easily my understanding we're doing all our due diligence to make sure they're using in house city resources available to handle those it and

really to contracting out when definitely necessary with no resources in house; is that correct? and yes. >> thank you. >> we're talking about au muted jim. >> i guess the first question just proxy voting guidelines one of the cybersecurity i'm wondering is there a plan for upgrading the cybersecurity if we vote on? >> um, i can follow-up in more detail but take cybersecurity very, very seriously and so we need to think about cybersecurity as we invest the managers and think about the cybersecurity of our vendors and think about the cybersecurity of

our infrastructure and platform so there are a lot of things we have a lot in place. as anyone in cybersecurity will tell you to be vigilante and something we're focused on. >> my point we're going to hold one of our investors to that standard we have to meet as well for a jurisdiction for the budget increase. >> okay. if this is what you captured we'll support that and two self ways of evaluating the costs are costs going up or not should if we're growth but the percentage of assets as a cost per head? um, the the other thing is we have more consultants than 23 years ago the reason the costs goes up

what are the measurements we can spend as much but an efficient, active way to measure the customer satisfaction we do somehow saving but the employee turn out keeping the employee turnover will show up in costs and issues of satisfaction and investment performances and not just. >> budget thing i like the numbers i voted for a measurement issue. i assume you're trying to accomplish that. the path for a long term i think that is the words you used. >> it is better positions for this organization both to deliver investment returned and to deliver on the members side

and reduce that is something happens that creates a long term. >> on the cost basis. >> absolutely. >> okay. at the. >> i'll add something to that. and this is - we will not - we are in the situation basking when i was on the health service system and then we had people (unintelligible) in san francisco. 23 versed of people (unintelligible) nobody bothered to look at it and see what they did but even got locked out there gaichd the city was locked out. >> the goal here is to take a system that is antiquated we

know money spent with two the best of need and defining in the process to find everything you said there's a accountability. >> right. >> just the jurisdiction along with the increased request. >> okay. and then justification that is another thing i want to remind everybody that our p n l our budget is our money. and . >> yes. >> okay. >> i can share on the lease how that is impacting everybody own the budget we be in negotiation for now space nothing is assigned yet so it is not official. um, we anticipate

that the price per square feet will be lower than what we are paying now and so than for we expect the rent expense coming from the levels london breed we don't know precise when the movement will happen meeting this for the current year. >> the second item with respect to move i'm sure if you moved around there are movie costs and again, we think that um, that of those costs will be covered how we are negotiating the lease but will be costs like furniture and cabling and having movers in one year a large number but thinking us over the next 10 or 12 years and positioning ourselves to spends

the money now we have facilities will last us for a long period of time. >> we currently have in our budget dollars that maybe available based on professional services and other things we've not used to apply towards the one time expenses and working to make that happen because those are dollars we haven't spent maybe available, however, the process if we are allowed to be allocated at the use of dollars. if not, we'll have to put a line item for the costs so i'm proposing to the board as minimal to approve our budget with the note that should we not be able to use the existing biggest dollars we have had up to $7 million for the one time

expenses i know we've done a lot of work the information today to try to cross out things like first one moving expenses, etc. and presenting a higher number i want you to know we'll be prudent and hope to come in below that but i want to put that out there so we have the flexibility as we get more information if that anybody is closer to one million dollars or 6 or 5. >> totally in the realm of transparency. and is. >> it is based on our analysis of again what we know today and right. >> question. >> yep. >> this new location will be a maybe?

>> you see we might be in that location for 10 years or more great has that building a new construction symptom in the last 10 or for whatever reason years the infrastructure of this with the electrical and ventilation will it be good enough for 10 or 15 years. >> that's what you're talking about we're looking at a design for specifically for our needs. >> great. thank you. >> if we wanted to control that we should is done that earlier but maybe not could have been a bad story too many. >> any other questions on the budget i know a lot of information in the pages and any other line item you want to talk

about i'm happy to address it (clearing throat). >> great. >> again great work. >> great. work. >> and it is transparent document so - (coughing) >> so this is we need a motion. >> we need to make a motion to submit it to the mayor's office? >> um, if you may to accept it as submitted are the option to include up to $7 million for one time expenses. >> this is better language so

moved. >> second. >> great. >> public comment please. we have one in-person public comment. >> sanchez one thing i'll hear all the time is cybersecurity they don't know how it wasn't looking at their own wells fargo how did this get approved all i'm saying from members of there is an additional expenditure with regards to cybersecurity with the one time hit for adding a line staff that is specific towards cybersecurity impact a i and things of that nature we definitely understand that i thank you, you're really

focusing on cybersecurity a nonfear of retired people they'll all getting tired. thank you. >> thank you for your comments and do we have any further in-person comments? >> seeing none, >> seeing none, line? >> madam secretary, there are no callers on the line. >> public comment is closed. >>. thank you. >> moved and >> all in favor, say "aye." >> aye. >> opposed? . thank you. >> next item, please. >> >> 12. action item. review and approval of basic cola effective july 1, 2024. >> should we come back? >> again do you want to do it now. >> we're to break for to run out next door to get the lunch

and is that all right? >> (laughter.) 1014 ( in recess). >> all right. >> thank you um, we'll resume now and apologize to while we're eating while we're doing this and call the next item. >> >> 12. action item. review and approval of basic cola effective july 1, 2024. good afternoon commissioners. >> the bayview consumer price index increased so- >> retirees should receive a 2 percent increase in our monthly pension beginning july one 2024 the 2 point cip round up three percent and the difference between is three and 2 percent

will be added to the monomial cost of living bank in the materials. and we ask that the board approve this charter aa.-2 cost of living of 2 percent payable july one 2024 for all sfers retired prior to july 22, 2024. >> commissioners. >> i have one technical question. um, that .6 number is that go to the bank? >> it got rotunda up to the 2.6 percent was rounded up according to the next full next lower percent was rounded up three percent and then, yes three percent must 2 percent one

percent for the monomial cost of living bank. >> 2 point okay. thank you. >> i'm sorry. thank you. >> okay. >> is there a motion? >> i move to accept the recommendation to pay the basic cost of living. >> public comment please. we have one in-person public comment. >> sanchez. madam director, can you explain what that means [off mic.] when you say the cola bank how does that work? >> thank you for your comments. >> are reminded to caller press star three (coughing)

seeing none, moderator, any callers on the line? >> no calls. >> seeing none, moderator, any callers on the line? >> we can't hear. >> madam secretary? >> yeah. we have no callers. >> seeing none, moderator, any callers on the line? >> madam secretary, there are no callers on the line. >> sorry for the audible problems. >> before i wave the item actually call the vote we don't we're not doing - answer to public comment but; right? >> i'm sure (unintelligible). >> (multiple voices). >> we're not going to give

them one anyway (laughter). >> you have a sense of humor took me 5 years to find that. >> moved and seconded. >> all in favor, say "aye." >> aye. >> opposed? motion passes. please. >> >> 13. action item. determination and approval of credited interest rate for fiscal year 2024-2025. >> commissioners the interest rate is the rate that are the member contributions cd rates will blow 4 percent specified in the city charter accept the interest rate of 4 percent for the upcoming plan in july one for you to june one 2025.

>> i move we continue. >> i vote we continue to keep the credit interest rate at 4 percent. >> second. >> public comment please. >> do we have any in-person comments? seeing none, moderator, any callers on the line? >> madam secretary, there are no callers on the line. >> (rustling of papers.) >> thank you, hearing none, public comment is closed. . >> okay. moved and seconded. >> all in favor, say "aye." >> aye. >> opposed? hearing none, next motion i mean july 1, 2023, actuarial funding valuation report and presentation of employer contribution rate stress test projections. >> commissioners ann harper to

present the results of tier report and answer any questions. about the results. >> good afternoon. thank you for having us can we move ahead to the second slide? >> one more. so each year we see is results of 21 of july one of prior year and assess the liabilities of plan and assets at preliminary results the development of employer contributions for the coming fiscal year. so um, just to hit the highlights here. your plan is well funded it remains well funded 95 percent by looking at of the market-rate and 97 with the smooth investments over 5 years it is the actuary assets

addressed attraction rates been coming down for the last several years and continuing to decrease and prior to cost sharing the employer rates go from 18.2 this year to 16.9. fiscal year end 2025 and show later on coming one more year and - but then kind of expect them to - a little bit of bouncing around will level out at 17 percent after the smooth assets work themselves out but as always there is a wide range of potential outcomes just the projection as expected and continue to move to the. next slide, please. . so the chart on the left of numbers are the liability breakdown into the groups blue

bars the members receiving the benefits. (rustling of papers.) deferred invested members no longer are provide under the plan but is the right to a future benefit and then the active mrefrz employees are the red bars and two items are the market-rate for the actuaries and as you can see that the (background noise.) the market-rate climbed from 98 to 95 declined and slooiblth increased. that means that the m fund liability market basis declined slibt for the smooth basis (rustling of papers.) the the other thing is we kept track of maturity how much of liquidate is attributable to

that are left for your system 60 percent which the system i was presenting this morning over 70 percent so you're less mature in that system. but all of the other systems in the last have been getting more and more mature. next slide, please. already here is is attraction rate and more cost sharing on the other side - the purple bars the member rates and dark pool is the employer normal costs. the normal cost the costs of benefits for the current year of service so if you combine the member and employer costs that is sort of the basic cost of benefits being provided under

the system. and as you can see if you look at the after before cost sharing the tops of those bars are the aim and only change is a shift between how much the members are paying and how much the employers are paying. and then the mr. koretz pay the non-funded actuary liability and that cost is decreasing if 6.9 percent to 5.6 percent and ann will go there the causes of that reductions but that is what is driving the reduction in costs as you can see the normal costs have stayed pretty well and next slide, please. good afternoon, commissioners i'm going to review the sources of changes from the prior valuation that bill highlighted and

looting the changes in the polar contributions before the cost adjustments you may ask the question how the u a l is created there are several reasons for that. when there is any doe vacation the assumption increases from the liability (rustling of papers.) and changes on the (background noise.) u a l and almost never get it correct long term aggregate to be reasonable and another source of change in the u a l contributions and in california month systems having contributions that are high enough to pay the interest occurring but principles. so what we're seeing here from last year to this year as bill mentioned an, an actual because

of decreasing in the chart scale is in millions and offsetting factors that decrease is u a l by one hundred million dollars and the red bar the decrease of 200 and $70 million and contributions are used to pay for the active benefits >> occurring each year and pay for interest on the unfunded and anything left over will pay down the principal and i like to look at it as similar um, dynamic as credit cards payment few is an ongoing credit cards balances and make perfumes every month and interest on your ongoing balance want credit cards and

have the principal you're a contributions are paying off that interest you have a big church of your contributions to pay down the unfunded and the second is the investment earning and a decrease of them in the u a l of $322 million this year. the access return for 2023 that returned a little bit over 5 percent that is below the 7 that is two percent expected return but deferred gains from investments that we used to smooth over time so the return on our actuary back up was closer to 8 percent so got it smaller gain on the value of assets. that was almost all offset by liability lose that happened this year i'll talk about that in the couple of slides i'll not go into detail

new but minor adjustments to the valuation software that is they're in the u a l to tighten up and to mitigate future liability lose going forward. and i want to reiterate too that your liability is about $35 billion so those changes they are in millions of dollars have relatively small. in comparison to our overall assets and liabilities. moving to the change in the employer attraction rates the rates driver's side from 18 to 15.9 percent and the first item piece it shows is decrease is in 2018 supplemental cola of one .33 percent in direct it is in 2018

there were enough assets earning to grant supplemental to those members that eligible those retirees is over and 5 years so 2022 valuation was the last valuation need to pay for the submittal cola it is paid now in the 2023 the payroll reduced your attraction by 20 base points we're for the talked about that how that impacts the attraction rates based on how it impacts our index a l payments they're create they increase expected wage inflation of 3.25 percent and that is also the same assumption we use for a payroll. so over what that means

will be a percentage of pay the payroll deviates goes as a farther or slower you'll get smaller deviations that is it was a what the 20 base points the gain the $322 million gain um, translates to 60 base points decrease in the attraction rates and the liabilities increases (clearing throat) increased that 35 base points. next slide, please. so here we're looking at the source of those liabilities gains and lose. um, and it is made up of 8 components here. um, and a couple of those things we looked are retirement experience mortality and what that means those are the main ones that people tend to focus

on is the retirements experience is when one members retire and the retiring earlier or later than we anticipated based on the assumption mortality experience is based on how long will members live longer than anticipated we're paying out more benefits over the course of last 5 years experience lose and each of those 5 years but are generally have been less than one percent a year a small um, and the biggest impacts on the liabilities over the last 5 years in terms of experience is the salary lose those are the green bars and salaries are about 57 percent of that liability over the last 5 years with the other um, assumptions like termination and

disabilities and over 40 percent the last source of liabilities in the chart are those old safety colas the basic colas tied to the salaries active members increases and over the last two years lose because we've seen higher than lose those old safety retirees have gotten higher colas but prior we are seeing liabilities gains for the old safety could l.a.'s next slide, please. over the last 10 years for the valuations and then the chart on the rights adds those sources together for an aggregate change as you can see we're talking about liability lose the gray bars in

the chart. and as you can see those are told to billion dollars over 10 years but by far the least impactful source of gain or loss for the unfunded. what is to note here specifically looking at those gold bars those gold bars are - asset experience and actuary value of assets just shy of $5 billion over the last 10 years you're asset returns have decreased the litigant by almost $5 billion then also to note the contributions coming in the funds have decreased our index a l by $2 billions the red bars are driver's side actuary based on the attraction policy the

submittal could cola has driver's side and the assumptions the purple bars have increased the unfunded liability by one $.7 billion those include reducing that return from 7.5 at the beginning 2014 and mortality and other assumptions as well. next slide, please. >> so we've been talking about dennis herrera vacations with the actuaries what those impacts on the attraction and u a l new we're going to looking forward to projections and what we're looking at in terms of your funded status and the assets and liabilities going forward and here in the future past 2023

assuming all assumptions are met each year of the projections with the 7.2 percent rate of return each year and include an assumption here for supplemental colas and prior to 2023 the history of funded status easement assets and liabilities the seats are represented by the lines. the actuary assets are the accrued value with the prior to 2023 is much smoother with the green line and the bars are the liability. and prior to 2023 if it is black bar means a supplemental cola granted and - and basic from 2023 to - increased from 84 percent to 95

percent on the market value and 2021 the market value basis the assets are higher than that 100 percent funded and going forward anticipating study very study improvement if not improvement but a very steady of course of the next 10 years we're anticipating close to that level. next slide, please. so this projection is the attraction rate and the bars represents the actual attraction rates, the top bars are the employer rate and the bottom are the employee rates. um, the line the dark blue line is once those projections and contributions look at in from our 2022

valuation so as you can see that the projected contributions are slight different from the mart value and the liability lose as well. to note here is the sharp decline consistent decline in the attraction rates since 2021 we're showing we're showing the contributions after those cost sharing this is actually what the members and employers pay from 23.4 percent for fiscal year 2021 and now it is down to 15.3 percent for guess employer and you're seeing a similar reductions for the employees as well. going from close to 11 percent down to 9.3 percent for the coming year. um, and then going forward to note that just irish-american stable contributions wrats for the employer and the employee. um,

for the employer 15 or 16 percent and no bill the first slide says 17 percent based on the attraction rates prior to the adjustment and for employer 9 to 10 percent assuming all assumptions are met any questions? before bill does for stress testing and i want to make sure we're sharing this chart. with the shared cost for the employee from 8. 7 to 83 hundred the members expect a rate reduction starting in july? >> own average yes you're; correct if you have a high enough compensation level you are -

>> (multiple voices). >> the joy of the cost sharing are the employer- >> (multiple voices). >> thank you and that is half a pregnancy. >> that's correct. >> okay. thank you. next slide, please. all right. so we know ann showed you projections on all of assumptions being met we know they wouldn't all probably be met we want to talk about the sensitiveist - the blue line is

which what when i expect the attraction to be given the return for the current year on the axis to plus thirty percent so as you can see i'm on the far left side or middle left, you would have to have a return below three percent to have a attraction above the current attraction because of the force that are pushing it down. the um, exception is right around 7 percent you start triggering a supplemental cola and a supplemental cola has the most impact on the attraction rate if you earn just enough asset for a supplemental cola it spikes between 7 and 8 percent return

and above 8 picturing returns that is driving the attraction back down again. another bump when you hit 100 percent funding. that changes the way we amortize costs on the system. so that's why you have that strange pattern as you can see but a range that happens to the attraction rates in the next year. >> can we go to the next slide, please. now for with xhufl years providing those stress tests and they are highly irradicable not exposed to be - just intended to give you a sense of volatility of range for the contributions and outcomes. we built those off of wilshire

10 year chapel years and 7 passenger's seat .7 for 14.7 and so on the table in the right taken the percent in the table on the left is a 95th percentile return. and then for the positive version we took the 34.4 and similar things for the 5 years moderate sits for the 5 years distribution but a sense of (unintelligible). next slide, please. (rustling of papers.) the appendix of the presentation has the projections for each individual scenario we can look

at those i'm not going through that (background noise.) this chart summarizes those and the top line (rustling of papers.) what happens to the employer attraction rates (rustling of papers.) the black lines is the projection ann gave you earlier (rustling of papers.) and the one year is the goal (rustling of papers.) the 5 year moderate in blue and others 5 year in light red and gives you a sense of how (rustling of papers.) surveillance the contributions (rustling of papers.) and those scenarios after 5 years go back to the assumed rate of return. >> and (rustling of papers.) what is the (inaudible). >> ross all the attraction employer rates and. okay. >> the gray is area is

projection of the 5 to 95th percentile in that gray area (rustling of papers.) but on the graph the attraction directed for the last years. >> pretty significant when you put this forward spread as you can see when a we couldn't get much higher or lower what the investment returns did. so the last slide that really - oh, no, i have a couple of - next one - that spread is really driven by the maturity of that plan what we mean by maturity is probably different than you think of a venture phenomenal you think of

a mature person they're even keel and stable a mature pension plan is the opposite it is very (rustling of papers.) reactive two things and what we mean by that the same um, causes a greater chance in attraction rates for a mature plan and so one of the measures we use is very effective investments sensitivity is the asset the level of assets divided by the payroll and that gives us a ratio and user is 8 so that means is if you have which go 7.2 question is make up for the 80 percent of payroll there

contributions the medium it go same investment loss will be 56 percent of payroll have less of an impact on the contributions. so the chart here i said the medium plan the chart here is data from public plans.org a database maintained by the center for the research of the college over 200 public pension plans. and so the bars show the range of the assets leverage ratio or all the plans in the database and we have the gold diamond so you are the higher leverage ratio than three-quarters of the public plans you're more sensitive to investment risks or investment volatility will case more

changes from contributions. um, for you than three-quarters of plans out there for california, your close much closer to the medium and part of the reason your high for nationally is because you're much better funded than the plans nationally the more assets you have the more sensitive given the fixed payroll base doesn't make sense.? it's not a bad thing to have a high ratio but it is just a - something comes with the territory. >> sorry. >> go ahead. >> you're saying we have more to lose like the higher percent. >> you also more to gain in both directions zero assets your

ratio is zero; right? >> you definitely don't want to be there but finding that how that translates to now you're sensitivity or how much your contributions will - you know, we take steps to help moderate that so you don't get the volatility. >> you're talking about the smoothing and the amortization he helps the return up and down and up and down so if things move to a level up and down we're going to follow um, evolving and that's when you're more sensitive and have higher hills to climb and the deeper valleys. >> goes both ways. >> so the attraction means we shouldn't sort of projection out long term and in one direct or the other we're more exposed up

and down year over year- >> (multiple voices). >> an awareness to understand you are going to have more the volatility and take that take into consideration when you're developing our policy and when a deciding what level you want. to take. but understanding that and you can model it exactly how that effects our contributions want to make sure you understood how you compare with other systems out there. >> thank you and thank you and jena for the help led up to this meeting to today's meeting and other than risking what staff said is a priority inflating risk kind of described it is a life cycle and west coast is

there a other than that sort of structuring anything about our pension we should be aware of critiquing a eco system or maturing the primary sole factor that is driving this. >> really the sole factor and in seemed to matured the regular smooth rate a suddenly change actually for payroll or revenue supporting the sponsor. you're clearly not in that situation much more the natural cycle of pension plan and building things out. >> so what is the area of concern we should think about we're grateful in this situation but the next factor we should

keeping our eye on that. >> you should monitor this and that appears every year in our evaluation report we don't bring it to every meeting but monitoring any sulgd changes in our situation but ultimately it is just gets another factor to consider in your sort of our cost benefit decisions on how you approach the plan. >> thank you. >> if we were to desire to lower our rate of return to be more conservative higher liquidity would that increase that asset ratio. >> the asset ratio is independent. >> how your invested but say you're less likely to have a 10

percent investment. >> you're changing that number- >> (multiple voices). >> yeah. yeah. >> so it is just goes into that calculation and not a single right answer; right? but judgment of how you balance that and what is appropriate for each system. >> can we skip into the. next slide, please. we do have interactive model that is the sort of thing we can look at if you're actually interested in pursuing this because did model is interactive pets elites go to the conclusion slide. so again if you are in a very good place you're very well funded on the systems and the

projected employers contributions are expected to retain pretty level over the next two years not you're looking to climb a hill or anything but a wide range what can happen based on your investment returns and assets getting recognized in the smoothing and amortization. >> so you're in a good place we keep on monitoring and you've done very well and ann showed how much you reduced the u u l over the last 10 years everything is in a good place but we have to point out a wide range of outcomes going forward. >> i would basic say we've been

wacky in some years i thank everyone - want to institutionalize. >> and this type of guidance is great you come out of getting through a bad period. you know, you are pta yourself on the back and aaron comes on the board and get other problems but appreciate the ins and outs (unintelligible). >> with all due respect, 90 to 95 percent of our alpha was not based on luck but the skill of our staff. >> i agree (laughter.) [off mic.] >> (multiple voices). >> margin of error in there.

>> okay. >> so about the structural things 5 years ago or 6 years ago. >> one other question. >> yep. >> good job to page three of our presentation and i think you kind of explained a little bit more of the impact in the latter slides. you mentioned in in a presentation earlier today the number of liability was above ours few we're projecting use a 101 have you seen the mature plans go down. >> we should be he expecting or concerned if we don't see that. >> so a at the end any tendency for three how the city

grows and the activity population and faster growth will - even with all the campaigns to retirees will drive the number down. having (laughter) the flip side of that is the um, if the city didn't grow and declines and revenue declines we'll see that ratio go up much faster and concerning situation for the retirement system. >> so it is fit to say part of the reason we've been able to have this resource stable the city active group has grown in a rate that keeps that percent in line. >> yeah. stable or growing all the projection is that the

active population remains stable. >> at at percent. >> but the number of active employees- >> (multiple voices). >> as opposed to go on down. >> thank you. >> (multiple voices.) >> retirement citizens are in place. >> thank you. >> question um, if i'm a supervisor how much can i ask you board member engardio. >> do we get this report objective that is in the budget we submit to the board of supervisors? >> is this information tripling down. >> not budget the budget. >> i want to make sure it

touches on what um, not just page three but the asset ratio you're aware we're doing the three year manual review (rustling of papers.) and not because of a new consulted but time we approach the questions this shows the consequences of if we want to do more or less graphically shows how to explain how it make effect the attraction rate to the employer so thanks for doing this but you understand that is how it should be asked her so- >> hoping an easy medics to look at it and get a sense. >> we don't control who hires more but bans what we do we're

metabolized to pay the employee. >> any more questions from commissioners? no? (rustling of papers). >> commissioners we ask the board adopt the actuary evaluation report. >> so moved. >> second. >> okay. public comment. >> >> do we have any in-person comments? seeing none, reminder for callers to press star three moderator, any callers on the line? >> madam secretary, there are no callers on the line. >> >> thank you public comment is closed. >> okay. been seconded. >> all in favor, say "aye."

>> aye. >> opposed? motion passes. please. >> >> 15. action item. adoption of employer contribution rate of 16.91% for fiscal year 2024-25. >> commissioners the customer contributions rate was in the report presented to the board and we ask this commissioners now adopt the 16.91 percent for fiscal year end 2024-2025. >> motion is in order. >> so moved. >> second. >> public comment please. >> do we have any in-person comments? seeing none, none, moderator, any callers on the line? >> madam secretary, there are no callers on the line. >> no calls public comment is closed. >> moved and seconded. >> all in favor, say "aye."

>> aye. >> opposed? mdc next item, please. >>. thank you. >> >> 16. discussion item. chief executive officer's report. >> one question. thank you. >> thank you very much. and commissioners the um, ceo report for this month is relatively straightforward i'd like to remind all of you that again that time of the year with respect to the statement of economic interest you should receive an e-mail about that filing deadline is today april 2nd the materials before you the quarterly spec report and please note the conference report is sfentd to calendar year for 24 a number of good opportunity if you're interested reach out to me or board

secretary before attending one of the training events. >> do the commissioner have any questions. >> motion so approve? >> discussion item (rustling of papers.) public comment. >> >> do we have any in-person comments? seeing none, seeing none, moderator, any callers on the line? >> madam secretary, there are no callers on the line. >> thank you, hearing none, public comment is closed. >>. okay. >> call >> 17. deferred compensation plan calendar. discussion item san francisco deferred compensation plan quarterly report - q4'23. >> good afternoon, commissioners um. >> classes new glasses. >> happy lunar new year part

of custom to wish you a happy and enjoy joyous year ahead and i'll cover the 4 main pilars investment and market and - on the investment side pleased to announce and 11 there for the stable rate so this rate is reset every quarter and row set for q one to three point zero percent guaranteed and reset and continue to hold the budget nearly one billion dollars in assets and considered our capital rise vacation and as of

last year the assets are over $5 billion. as a follow-up action to what we presented to the board in december, we are pleased to share the implementing of the reduced cost for the course fund by april 5th this year. and core funds are available for direct investment in the as opposed to underlying target fund as a result of this analyze we have identified 5 funds eligible for fee reductions of around $400,000 annually those savings are passed directly to the respective investors those those are in the vehicles that the plan is qualified for for example, for the low priced stock funds recently now allowed non-record tech plans access to

their platform and the cip is a collective investment trust which is a pier 94 wetlands vehicle and only available to the largest institutional investors and highly regulated by the office of corin woods of the curtesy and the state banking regulators to reduce administrative and operational costs for unlike mature funds the sec for equity to complete the processes like issuing a perspective or creating a board of directors finance of funds that there's increase the costs that are passed down to the investors with the institutional we have boards and people making sure that the investments are um, appropriate and

performing i'd like to move to the market given the success of the webinar in the security month of october of last year, we created on demand webinar to view on you may also watch live at www.sfgovtv.org i believe at the request of board member bridges and planning for a lifetime of caregivers make up over 21 portion of america population. the disadvantage community is the largest minor group in the u.s. which includes the aging population of the folks who have herbicides and dementia and mobility issues we 10 thousand baby boomers during 65 evidence to 20307 out of 10

will require long term care. i want to provide the caregivers now to help to navigate the resources available to them and their dependents. we included a draft of our 24 sf communicates on page 5. um, i'm sorry this is in the memo before you, you, reference in the memo thank you, darlene there is on the bottom. and it covers the initiatives for each quarter i'll be reporting to those and one item it is new if you look at q two have a bullet called retiree benefits so this is a new retiree benefit webinar and it is designed basking in restored participate to stay in the plan

owe withdrawal strategy that is what a lot of folks in recommend look for. and we have begun to make more contracts with the retiree group we used to have joe collin with the sf and have now asked tony chu with what has been an active contact and working with our colleague for the sf p dp in working on the web far we feel will be helpful. >> any questions on marketing? >> okay. >> and then on the operation front. next slide, please. please. thank you. >> i'm delighted to to you have a new hire 2 to 3 the crew her name is rachel alumni and comes to us from the

controller's office and a cal grad and has been an excellent addition to the team and hit the ground running processes and, you know, the plan is small we have a small team but thrilled to fill three resource gap thank you to the board for approving this two years ago thank you for that. >> and feel free to stop by and say hi to rachel and regarding the variable age 60 presentation will be presented next week as a reminder this optimal provision is in effect january 25th at the end of this year and allows the participate between ages 60 to 63 to contribute an additional amount

of over $10,000 this raise 7, 75 hundred for those age group to give them an extra bump the u.s. felt it was a capture and have 2000 participants that qualifies and want to insure that plan can offer the maximum amount allowed bid i these and the partners in the corin woods and it scheduled this after fiscal year end around july 24th. there is also the one 45 the mandatory wand one plans are allowed to roll it out and many plans are not due to the administrative headache so after discussions the

stakeholders tabled that until the successful roll out i informed the board been in line with many other plans and then finally i'm on the next page. (rustling of papers.) thank you. >> on the record we are pleased to announce is really out of a new dashboard on the screen designed to provide a cycle private cyber space to provide the bird and view how to make decisions a consolidation for the whole network worth by linking others and screen shots have priority on line 7 and included vocal points in a workplace designed to provide

persons like ourselves working remote and for management issues and we also as you can see include the quarterly report on the next page for the performance numbers you're interested. >> can i interrupt a question. >> can you expounded about the artificial intelligence. >> i've seen it used and thank you, really quick but i mean i understand there are applications but for the consumer logging into a website could manage they're money what would be an example they were

generated a i to be a benefit for one of the members logging into their cost account. >> i'll take too o two examples someone is underage 50 contributing - they'll get mitigated negative declaration with regards to looking their contribution rate and for attraction changes to get them on track mayor more applicable we're going to use that age of that individual based on the data we have within our system they're not taking advantage of age 50 catch up will get a push out to remind them of that ability so most of our a i around that type of messaging. there are backroom and is but

more high-level for us in the firm. >> so is it providing advise. >> no a i applications to the investment tool for managing account use in that sense you're allowing us to based on the suit built and communication of the suitability or quo in charge to provide that advise to manage you're account this is a i capability but logging in about the right message at the right time where they're at and the information with regards to that person. >> those are factors your staff is put in the system for a prestudy. >> data- >> (multiple voices). >> correct. >> right.

>> one other area with regards to fraud alerts so if a fraudster was taking control of our account and changed our banking information from a bank based in san francisco area to, you know, florida as a think example that will flag and we'll monitor it to monitor on other things that happen within the account and ultimately leading to the account so no transaction what a take place until we validate it. >> in time. >> most likely is in internal for the tools. >> i'm sorry the first part i didn't quite. >> (unintelligible). >> most of our work like the

security example; right? is that is all internal so - >> the staffing is internal (rustling of papers). >> okay. well that actually concluded my quarterly update i believe i would like to united nations to my colleague and i'll do it at a high-level we're the last item darlene. thank you very much. >> probably won't go through the slides to keep it easier but focus on a couple of categories noted within the report and referenced in her comments and planned assets increased up to over $5 billion at the end of the year that's the high-level mark we reached in the quarter and want to highlight the net there of the netted accounts now

accounts pushed us up on the accounts we held and the change in the participation rate of plan to put it right in the 60 percent level as well and highlight one item i touched on last quarter and under the stabilization and look at the report with regards to the contributions in the plan were stabilized we looked at over the prior quarters are as you recall had q-3 a high-level of really officers those numbers as you can see is $27 million roughly in line which would have occurred in q one and q-3 so continue to accept the communication and outreach of our xhourmdz to keep the assets in the plan and the final note going back to the theme of flairs i wanted to highlight the

work of our counselors the activities and were very good and across the board there is the city and county and had over 23 hundred net one by one employee meeting throughout the quarter the highest number throughout the entire year in a quarterly basis and understand; right? we know we have to keep on our toes and looking at ways to make sure we are increasing the access to clournld and making the jones easier to reach out and have the conversations and unless other questions i'll pause there. >> i have one question. regarding the participants do you so a percent of those who are eligible to participant.

>> yeah. you mean the people not on the board or pension those folks are required to be in the plan. >> if we made that enrollment. >> (multiple voices). >> the payroll division sends them a note you are not eligible so put 8 percent or more into social security i don't have that exact number. >> at your convenience send me the information. >> we don't vw that. >> you said they have to do it. >> oh, i'm sorry that's a good point i know. >> we're discussing auto enrollment. >> this is a mandatory (rustling of papers.) but deferred

(rustling of papers.) >> at your convenience send me the numbers (rustling of papers.) >> good report. >> thank you. >> all right. thank you commissioners. >> thank you very much. as usual (unintelligible). >> public comment. >> >> do we have any in-person comments? seeing none, seeing none, moderator, any callers on the line? >> madam secretary, there are no callers on the line. >> thank you, we're public comment is closed. . (gavel) call the next item. >> 18. discussion item. retirement board member good of the order. >> if i may quickly thank all the commissioners a lot to get through today and important topics i know you came prepared with good questions and

advances and it made for a productive section to. thank you. >> if you bolted on our investments. >> oh, god. >> we'd be having cocktails right now. >> i have one question and one observation it has to do with with engaging the managers if the performance of behavior it is not up to snuff but we vote and list the complaints and has it ever golden gate park token to point we ask to go out and engage the managers and ask them to treat the employees or clients better do we ever gave

me? >> we hope fully i'll finding how the managers manage their penalized and from fremont with the dialogue around that. >> okay. so your staff is doing things like that that's what we heard. >> i hear complaints we're acting on them but not. >> we have a um, e s g procure if any risks come to our attention we have a process for vomiting the risks and the materiality and engaging with the manager to address it. >> okay. >> as i understand i understand the process and totally unrelated comments. only this relates so any board many

years ago, i guess all right. most people in san francisco disappointed but one point of relieve many years ago one of the appointed you members recommended we should buy the 49ers we didn't do that but i know we have if we had done that and won the superbowl how much money we would have won we didn't invest so since they didn't win we didn't lose that much. >> (laughter.) >> so maybe next year. >> what we announced dah all were taken out and shot. >> i look forward to an annual update in board member o'connor with an opportunity cost of we

had bought. >> i like it. >> yeah. >> and my agenda item 49er opportunity costs (laughter.) >> so we had public comment and now we're going to go to the next item. >> public comment is closed. and we have no in-person public comment on this item none, moderator, any callers on the line? >> madam secretary, there are no callers on the line. >> thank you, hearing none, public comment is closed. >> item 19 jrmentd. >> adjournment all right. >> thank you. >> i should have brought this up in the order but giving this to um - [meeting adjourned]

>> (music). >> hi, i'm emmy the owner of emmy's spaghetti i offers working that with some kind of fine dining and apron and feeling stuffy and in the 90s in san francisco it was pretty pretense in a restaurant in the restaurant scene i want to it have a place to have a place for my friends to guess i started the restaurant a no better place the outer mission spaces were available that's when i opt in two 10 he start with all people and work with them and the events they create one of the

events we do every year and backpack give away and give piaget away and a christmas part with a santa and bring 5 hundred meatballs and pa get and we're like in the mission not about them knowing where the food comes from but a part of the community. and my restaurant emmy's spaghetti and fun banquet and san francisco not the thing that everybody knows about we stay under the radar we show the showcase i take it food and we started to eat we wanted to have comfort food and that a claims friend from i take it and helped

me create meatballs and dealing evolved over the years in the beginning one plate of spaghetti and a meatball we tried to make the portions as big as they could be. and now we have quite a few types pasta dishes with a la begin and meat sauce or have a partition to a lot of food we are at a point with all the favorites i don't change the menu often 0 i eat here so much but everything is fresh your cocktail menu is the best it's ever been one thing on the menu our magazine ghetto we change the flavor one of the fun things

it is served in the historically we're known emmy's spaghetti as a friendly place and when i opened i wanted my friend to be welcome and other parents to be welcomed and it is very for this is a place for families especially in san francisco and this is where though hold their celebration important i mean you're coming to a family restaurant and you're coming for o to a fun place i love being the owner and pretty sure my life i enjoy running the psta spaghetti place i hope to be here a while we'll see how it goes we everyone is a friend we're hoping you'll be a

[music] since the opening on third and mission in 2010 the grove is a epicenter. tis is part of the community. we bring tourist, we bring convention ears and have a huge group of locers who live here. we are their living room and love to see them on a regular basis and seek newcomers to the city of san francisco and serve them a good dose of san francisco hospitality. we make everything in house from scratch every dape we vahand carved [indiscernible] the chicken pot pie we serve probably a hundred thousand if not more. roasted chicken, prime rib,

salad[indiscernible] coffee cake and [indiscernible] all the pies are fresh baked. the home made cookies are done, once, twice a day, depending how fast they go. we believe in goold old fashion home cooked food. we want to be a welcoming, warm hospitable place for everyone to come and hang out. respond time with friends and family, meet new people. have important conversation. relax and enjoy, rejuvenate, get restored, enjoy one another and the at mus sphere the growth. the grove is over 730 to 830, 7 days a week, breakfast, lunch and dinner.

>> my name is michael i'm running to retain my seat as the bureaucrat judge an honor and privilege to serve as judge for the past 13 years. my mother is japanese and any father and veteran and i grew up near the military base and attended and earned money by working in construction and working in a hardware store and selling children's shoes my commitment is by my family history named after my