a safety prospective and from a miscellaneous problematic second portion of the glide path analysis is the allocation that's like 17 if you so part of our research it on the target date model inside was an incorporation within our model to look at the impact changing the process over time and so we can understand the impact from an income replacement prospective of taking risks too the assets over 7 8, 9 so part of the analysis we gone through it looking at taking higher of those areas to ask the process that will provide higher he return such small capital markets the results of the modeling is you making a recommendation that we are

increasing some of the risker sections in the glide path and incorporating more things to increasing the difference indication at the end of the glide path so for modeling it's suggested you have a lot of capacity forensic early on in the career wear suggesting to have a time horizon to take the risks for the forecasts and expecting higher rates of return so relative to our former asset allocation and reduce those offer weighs relative to a capital basis down to the point of retirement the intent to accommodate capital early on and improve the defying indication

so that's incorporated as part of the glide path in addition to fixed income we're reducing the weighed to the fixed income recommendation that's relative to our forecast for interest rate that are we're expecting higher interest rates over the next couple of years that's starts to could we consider it's on target which we expect to be in the coming years in addition we have look at inflation to so the benefits in its current form is less necessary so our recommendations includes the shorter during yes within the fixed neckline. >> slide 18 is is a sense for the forecast and returns for the capital preacher we have a dash

blue line to give you a sense of lower expected return and oftentimes somewhat voluntary outlet within the glide path refresh we're take a look risks or taking more risks early and blending in the prozac's especially during the medium tier growth assets so that's the intent to show the differentiation between the slide slide 19 is a sense of the allocation involves from the total portfolio throughout our career and slide 20 is the growth assets are involved so the reatlantic component are coming down we're taking larger weighs of the capital markets and having as part of growth assets the real asset wealthy

increases and add in market debt so you're seeing greater exception at the point of retirement than our career any questions on slide 19 or 20. >> slide 21 gives us the specific percentages for the allocation this is part of our recommendation or this is what we're actually requesting approval for in 2014 to be incorporating as you can see the interest rates from current to relate to proposed and then on slide 23 commissioner bridges already discussed that we are recommending a change to the global entity component we've worked with los angeles us to make a recommendation in terms

of the global component that was recommended as 3 fund solution four both entities that was 75 percent and global was 22 and a half and 7 and a half mayor eric garcetti markets in was the combination of the 3 that was designed to have the endorse of entities and the world equate funds is coloring so our recommendation to switch to 9 new funds that is neutral in addition, we requested the use of d f a dedicated so we have the ability to incorporate that wealthy early on we've worked with the los angeles he is as you can see the impact on fees it is relatively fee

neutral once you incorporate the beard adjustment as you can see the total fees have come down even with last year that concludes my remarks happy to take questions on the analysis or any portion. >> questions? >> thank you well, i support the changes there it makes sense early on to have a larger percentage of small overlay so for if you have tyson plus year alliance it is very good so i certainly favor that i want to comment your lowering the inflation sensitive in terms of the tips your lowering the commodity so could you examine on that. >> certainly our expectation as

i mentioned inflation is relatively new in this environment in addition it has an impact on the benefit enroll of the commodities and tips commodities in particular we'll have discussion on it is a difficult thing to forecast but we believe that the forecast for commodities it has been coming down just given the supply demand changes that we've seen in the marketplace over the last five or six years we're seeing that play identity in the fourth quarter especially and i think our near term expectation for commodities is lower so it's a combination of factors for a lower rate for commodities. >> one last question how often

do you update. >> the aggregate level of risks we're not being be coming back every year there may be a refresh on an annual basis but the aggregate we want to review every 236r years along with the demographics. >> any questions. >> commissioner driscoll. >> on page 18 that makes a reference russel is forecasting volatility numbers and your railing is doing this for a long time go the history of some accuracy could you provide when you make a forecast 20 years ago or 10 years ago how accurate and i don't have any evidence to support anything other than an

anecdotal i would say our capital foovrts process is based on a long term equality and we know it varies over time we incorporate the evaluation adjustment of the entity within the modeling process but it is relatively constrained so we won't see large judgements to the entity strains so over periods where the entity stream our forecast would be inaccurate but over the last 10 years for example, the forecast for many of the especially entity clauses relatively consistent with our exceptions for 10 years ago but it will vary depending on how risk and i versus the market is versus the overall cap.

>> i think so what you're trying to say don't worry the - both return numbers and the risk numbers i want to see how well, you've director heinecke done it going forward you believe the market will give us plus your interpretation of the cost of living that's why the requirement was the number one objective so i want to go back not today but prepare to tell us. >> commissioner we'll endeavor to get that you mentioned over a 20 or 10 year period. >> whatever you have it's still a long enough period to be significant. >> thank you to our executive director. >> this is a again question and had been in the rfp if they're giving assumptions and we're relying on it that's the

selection can we - >> i'd rather get consultants. >> the rfp for consultants would be appropriate and they provided it so - >> i remember very nice. >> generally consult of the rfp. >> thank you. >> another questions or comments for commission seeing none i'll open two to three up for. welcome back claire >> thank you we're trying to actually looking at slide 27 and the comments about new benefits formula for miscellaneous and safeties see below that the new hires to specifically (inaudible) to 55 is that possible to get a better

explanation i'm trying to figure out if this is moving people out of the benefits to assigned contributions or why there's a significant reduction in the pension benefits because i think those supported prop c were novelist aware they would be getting a significant reduction in their pension he or they won't have supported this we're retired and don't have to worry about it but our brothers and sisters that are working in the staff will probably want to know why their pensions are effected. >> is that a question or comment for russel. >> seeing none no other public comment i'll close. the calory k chairing will

entertain a motion of adaptation and participation recommendations >> i'll move it. >> second. >> discussion on the motion seeing none, all in favor, say i. >> i. >> passes unanimously please call item 11. >> (inaudible) world core entity within the teetering a target. >> the chair will accept it as explanatory i'll open it up for another motion. >> recommendations. >> i move we accept this funds. >> i'll second it. >> great discussion on the motion? seeing none, i'll open up for

public comment welcome back >> commissioner melberger. >> just to get a braider mandate is that the purpose. >> ling les low when we made the recommendation to get properly capitulated endorse through the global entity fund we needed to compensate by having international because the global funds stan on it's own it was not capitulated so, now there's a a fund it is capita laid we can streamline from 43 to 2 we'll keep emerging for the reasons that russel outlined but the newer global equities fund will give appropriate capita

laid exposure it is more streamlined but the rates will be automating adjust. >> all the different markets will be capitalization so if you - could you give us an idea 1, 2, 3 which are the biggest countries a round number. >> china would be the biggest and brazil. >> brazil is the second they're about 18 and say 14 or 15 percent respectfully and the other 9 or 9 and a half. >> this is the place. >> thank you very much. >> any other questions or comments all in favor, say i. passes unanimously

thank you could you call item 12 please. an action item review and approval for the san francisco ethics commission 456 policy statement. >> board members the investment statement was last reviewed by you in early 2012 we'll have significant changes changed third partied administrator and india a rose option and in consideration of those changes staff and angle he's reviewed the statement the changes are the significant items and, of course we take advantage to move things around and streamlined and made it easier to read anglely is here to answer any questions you have. >> any questions of staff seeing none i'll open up for

public comment on item 12 seeing none i'll close. >> i move we adapt the past recommendation. >> any discussion to the motion. >> yes, sir. >> you have the changes for the item you've presented do you have the final copy or only the changes. >> i have the changes we this is a lot easier to read we were hopefully that rather than giving two but we're happy to provide you with a clean copy. >> so i know what the after picture is all in favor, say i. >> i. >> passes unanimously thank you item 13 and item 13 a discussion item the deferred compensation manager report. >> good afternoon uh-huh.

>> board members you have the models activity i want to provide you with american people implementation of gold maker the report says 5 hundred and 16 new gold maker participant but i believe as of the end of last year it's been updated to 5 hundred and 87 we're trying to do at this point to determine a way to provide you with the information that i know you're interested in where that's coming from is a member a new member or someone that is taking money in the target day funds we've working with the committee and prudential trying to figure out out we can't provide with you specifics i wish we could i want to say briefly we shall getting in the new year we'll be trying

to roll out gold maker nor robustly than in the past. >> thank you questions or comments none i'll open up for public comment on 13 seeing none i'll close public comment on page 2 your self-directed brokerage are we happy with that number where do we think we're going with self-direct. >> that's an interesting question i'll say we do not actively we don't actively tell members or courage them i should say courage them to use that alternative generally speaking that alternative is raised to a participate if they ask if there are other funds available to

them and okay. i guess this is an observation considering we're not advertising are the numbers rather larger it shows how interested people are and how much they're watching it i that that could have been zero in a short period of time it's a pleasing number. >> if a fund is termed and they want to stay in the fund do don't we put it in the self-brokerage account. >> i won't say that pimco you were able to move that into the self-directed broernl it is one

of the funds available but i don't think i'm going to have to defer to prudential i don't think we've specifically put. >> fund into an option in the self-directed brokerage opposition; is that correct. >> let's say let's follow pimco let's say the participant wants to keep it how and as a followup we're going to be rolling out the registered advice we're waiting for a finalization to the forms which will include waivers so we will not necessarily promote it but we'll

definitely make sure that people are aware through the self-directed brokerage they can authorize prudential to actually collect fees on their behavior from the registered advisors i wanted to give you an update what we expect by the end of the year we'll have the forms online and again at least make people aware it's available. >> it could increase the folks with are using the self-directed options andcommissioner driscoll. >> the imcredential costs it is basically, it but if members wish to take advantage to deal with the situation like pimco could the example one their lout and two a fee to pay and those

hairs in the brokerage windows are using retail shares not institutional shares and several fees off of the members number one they may have to pay more but that's their choose. >> thank you, everyone call item 14 and item 14 is discussion item educational presentation by the itself office of the city attorney and the reporting requirements. >> i'd like to introduce deputy city attorney from our ethnics team amending. >> thank you very much so the rules and information i want to talk about are in your packet i apologize to the outside u audience we were not

able to get it on the monitor but it is in our packet so to any public comment? to do before this afternoon about the rules that apply to city officials if this is a combination of both state and local laws but before i talk about that i want to say at the outset me and other people in the office we're happy to sit down and discuss those issues i'm providing my level basics there are a lot of expectations and expectations to expectation it is best to talk about examples to work out what are the applicable rules that deal with a city official to jump into the topics one of the things i want to say really the first question what is a gift what is a gift is is surprising

hard to find it is difficult for a lawyer but certainly there are rules and opinion what constitute a guest a gift guest is anything of value that is not ruptured of equal value and a an example of a guest it can be a cup of coffee are a pair of baseball ticketed a a guest of travel or a holiday guest it is a broad example there has to be expectations and actually it for example guest for family members certainly, if my wife gave me a christmas guest it is not to be recorded

and expectations for informational material to the extent someone wants to give you a book or a conference where it is relevant and another common guest exception are toikts nonprofit fundraiser often a city official is approached to attend a fundraiser that provided the tickets to people in exception and if so none of the rules apply i'll talk about that more but two categories boo both guest disclosures and guest limits another strategy or another way to approach a guest if you disjointing doughnut want to deal with the reporting any guest the ovlsz office has the option of within thirty days of

running the guest or pay fair market value and city official can donate it to charity within thirty days if the city official don't anything within the thirty days again, they're not subject to reporting or limited requirements >> now guest disclosure i'm going many of you have emancipation proclamation be countered throw in the form 6 hundred and need to file upon taking office and soon after leaving office as well under state law the officials are to report $50 from a single force if someone give us 320 there's guests you'll have to report those and certainly if it's

under 50 bucks you don't have to report that in addition to the guest disclosure requirement there is also an annual guest limit of $440 currently from a single source it is $440 as of january it is to there to $460 null the next couple weeks in addition to the annual guest limit there is a local rule regarding guests it is the local restricted source rule an official can't accept a guest and two types of of restricted source anyone or entities doorknob with our department and

seeking to do business wanting to enter into a contract with the department not one your personally voofld in negotiating but any contracted with our department as a whole and the second type of restricted source anyone that wants to influence you so in a conversation over the phone but initiated be person a with respect to administration active action in essence anyone that wants to lobby i is the second type of restricted source what happened in local law a restricted source is generally prohibit from giving you a guest the first exception from a restricted source the city official may receive non-cash like drinks and under 25 dollars or less up to 4

times a year mothering another exception is under the holiday season gift of food or drink like a food basket given to 0 city official is really not subject to rule that guest basket is blazed in the breakroom where everyone can par take of it it comes up this time of year. >> in addition to those other rules every city department has a statement of incapable activities this was a process started by the ethnics commission they did this competitive process to contact all departments specifics ethnics rules those activities have