to level 2 thank you very much. >> welcome back claire. >> thank you. this time i'm speaking sole for myself again on page 19 item 21 the self-analyst testing and someone pates a great advocate for conservation for animals and domestic animals i had expend conversations with a number of research veterinarians including those atic davis with issue with my own dog i've leader beyond the lab rates there's no necessity for animal testing we're not talking about the lab rats that are breed for that kind of test we're talking about the dogs and beagles and rabbits

and other kinds of animal i'm hoping at some point roach the case by case and oppose all animal testing in regards to this think of our own pets and think if you want them to the ginny pigs and come up with a different view thank you. i'll appreciate that if you change that thanks. >> seeing none, i'll close the speaks on page 167 under the reluctant can you walk me through why we support confidential voting i presume as opposed to an open vote so we

can better cast all our votes on other issues. >> this particular issue is generally dealing with confidential voting that have been submitted by institutions to companies and making sure that that information is confidential it is actually, the proposal we generally see we haven't seen this proposal for a number of years now it's been a few years since this type of proposal has been on the ballot of proxy companies. >> not towards votes in the board room. >> no only institutional investors and a as and present their votes to the company.

>> all in favor, say i. of the motion. >> i. >> passes unanimously thank you you very much. >> item 8 please. >> number 7 please call it. >> thank you thanks for everyone's patience

commission dris cal colonel made a comment we shouldn't be giving money to managers that have too much this is one exception, however the group being one of the biggest global asset firms in the world but they're releasing is their largest business line representing about $80 billion in annual and they have an infest track records going on 25 years but their performance through and after the global financial crisis that ceded their reputation the real estate group is managed by john gray who is likely to be running the firm someday and you know give the track record the

impressive leadership dominating their franchise that led the firm to raise a rough sum of $15 billion and at very gp friendly terms the most notable only a percentage of acquisition transaction fees will be refunded to investors even so i think a meaningful investment to this fund will provide the system r with fantastic global on turnoff global and the opportunity to invest with them 0 peter. >> hi commissioners so what give us the commission to recommend this money to the on

turnoff real estate funds asz over a 25 he year periods one .7 multiple pretty much puts them in the top level of many on tusk real estate managers they focus on and the management to drive the creation across everything they do and last but not least they are the only remaining what's called a scale player in open you tusk playing this is the financial crisis and this is a tremendous advantage sometimes the deals are two big or complex i'll pass it over to cambridge. >> thanks i'll reiterate everything it art and peter said regarding black stone they have

an un34r5er8d real estate team in the entry a way to leverage the black stone that helps to generate the information flow to trj of the trends as peter men's their size coupled with they're built to act quickly is a true competitive advantage and consider large portfolio investments that others can't and they have the ability to execute very rapidly so brought deals on a first look basis that others can't see and finally one of the best track records in the industry it is consistent over a long period of time and their consistent with their performance and on i r and r and disabled capital basis so a lot to like here and if there's

specific questions i'll be happy to answer any questions. >> so the question is who's their biscuit competitor right now peter mentioned the larger global banks have been pushed out of the industry they're in a sweet spot likes a star wood might be considered a xeefrt but given the size of the platform investments they pull into this fund and stay difference if i did they don't have try xheefrts. >> i was going to mention star wood but identifiable the strength strategy is very different there. >> i'd like add one more brookfield their funded for the

project sponsor. >> but globally. >> yes. >> that's it. >> any other questions. >> nope. >> we'll be open to another motion. >> i'll make the motion. >> second. >> we'll open up for public comment on item 7 seeing none, all in favor, say i. >> i. >> passes unanimously thank you very much item number 8 please. thank you norm commissioners just a couple of quick notes one our missing a page from the printed report which you should have received by handouts that was a double sided report the last page didn't print. >> so did we get 50 percent of

it. >> that's sound right. >> a couple of quick things on the first page the investment vurnz is we're floating around zero negative 0.3 percent so far year to date so the return on the market has not been it's kind of flat lynn in terms of moving on to the memoranda is the orbit meant the health care royalty strategy the board approved in november closed up on january 30th so a high point there. >> the car began stream go that was approved in december an energy strategy was closed on january 30th and we're making

good process we may have something to report on building out our team in a matter of a few weeks. >> you have a report out as part of the supplemental v vote. >> that's right 53 voluntary closed after we recorded the materials this was a capital strategy the board approved last masonic february 3rd great i'll on up for question with our chief executive officer seeing none i have a couple of one request when you call out the investments that closed anti low you be able to show the number the up to number. >> yeah. >> on your i do have and

eunice might be here on we've met thirty. >> (inaudible). >> beautiful i believe it will be your page 2 not knowing if that's at real page 2 human resources at the bottom of the page we have your equipment two questions the last line it says the underrated is that a date error or are we year behind on tracking it. >> i'll catch up to the commissioner. >> unfunded commitments. >> it's labeled asset allocation january 21st the capital appreciation is the first step all the way down to

the bottom unopportunity commitments is that an error in dates are are we reporting. >> it's a january 2015. >> the next question blow that it says rb bridge walk me through that, please. >> t is bob here? okay real estate bridge loan i don't recall what that is what i report back >> sure of - >> i will open up for public comment on number 8 seeing none i'll close public comment mr. cokeer we can handle that at a

later time. >> item 9 the discussion on - (inaudible). >> manager you have in front of you the report for this month and i also wanted to advise i we have just learned that london stock exchange that owns russel investments will be putting russel up four sale that will happen quickly but we jew just founded about it this and answering any other questions. >> questions by the commission. >> we've done well in that business. >> any other questions seeing none i'll on up to public

comment public comment is closed. thank you for your report. >> item 10 please. i'll accept the item as submitted any questions by the commission? >> no. >> chair will entertain a motion for adaptation open up for public comment on item number ten seeing none public comment is closed all in favor, say i. >> i. >> passes unanimously thank you item 11. >> item 11 the determination and approval of credited trick or treat for 2015-2016. >> great we'll accept the report as presented it's self-explanatory i'll on it up

for questions. >> seeing none, the commission i'll entertain a motion of adoption. >> so moved. >> great open up for public comment on item number 11. >> seeing none public comment is closed. all in favor, say i. of topics. >> i. >> passes unanimously can you please call item number 12. >> item 12 review and the adaptation of july evaluation results. >> the actual serves corridor we've got the funding agey and this evaluation a determines the upcoming fiscal year from july 2015 to june 2016 and our colleagues to talk about the results. >> good evening we're just

going to hit the highlights of the report and talk about what's been changed and look at it some of the projections quickly we have good news to report contribution rates are going down for the employers and the basis has improved 10 percent and those have been primarily due to the investment returns of 18.8 percent. the fiscal year as well as the new ambition policy we've adopted in august and as well as being offset by the policy just adapted in the - this table give us additional daily on the funding status i want to point out a couple of items first the

actual investment from $167.3 million plus to $2 million less than the market rate that is $1.9 billion it's the actualy value so we recognize things over a 5 year period and those alternate $2 million in gains will be recognized over the next 3, 4 5 four or five years so you'll see when we get to later in the presentation that's a cushion it provides relief to the fund the other things i want to point out the new items on the chart at the very bottom we're identifying from our unfunded liability the interest costs on that and that's something we're starting to compare from fund to fund yours is a very good

situation the railroad on the unfunded liability is 3 and a half percent payroll so 3 and a half is the interest on the united way funded liability so our california survey by comparison as of just about 30th 2013 was median of 13 percent yours was significantly better than we saw on this slide we're showing the changes in the membership the new things the changes in the liability and the funds are maturing over the years currently about 60 percent of liability is attributable to members who are currently receiving benefits an increase from 50 percent a part of the

maturation of the funds and now over one active member for each retiree and that used to be closer to one .7 that medians you've got a smaller active base to support of overall fund we're showing some different breaks down of the contribution rates the first section is the basic contributions rate we've circulated this is before the adjustments to employee contribution rates so we've calibrated this as 82 percent here and the adjustments and we those juchlts are varied by employee and we say estimate the

aggregate the employer contribution rates to be 19.2 percent of pay and the employee contribution rate 11 point one percent that's a decrease of 4 percent of pay for the employer and the employees stated in the same range their rate is about the same bottom we show the praekd of that same contribution rate between the normal costs of additional benefits accruing every year and that payment is breakdown both the interest versus the amount our paying if principle this is a great breakdown many systems the payment on principle is at or no more zero and some cases zero our contributing 8 percent

towards paying down the principle of the unfunded money. >> this slide shows would you we estimate the cost sharing have enough time under prop c and specific to an employer contribution rate of 22 psi points 8 percent that's the contribution rate for 2016 adjustment is made based in members when they were hired their pay waiting rate and whether or not the members are in a safety group or miscellaneous group the percentages you're seeing the base before the adjustments and then the adjusted rates that are adjusted for the cost-share on the right-hand side of the vied

an aggregate about 3.56 percent of a cost adjustment based on the 22 p.s. .8 percent actual determined rate this slide summarizes the new policy kicked out in august of 2014 and basically there were no changed for prior charter amendments their am tied over 14 or 5 years depending on who is effected by the amendment and the 15 year rolling ambition for a change has been replied by the following schedule and for the most part there are longer amortizations you'll be paying off the urban funded over the number of years the rolling period you've never paid that

unfunded this slow down shows the changes from last year's contributions rate to this year's contribution rate and nylon stockings that by sources i'll highlight the birth reason for the change in the contribution rate for the asset gain and as bill said it was doug due to the mandating thought you unlawful percentage and recognizing some gains that decreases the contribution rate eye by two and a half percent and then the doctor in the investment return assumption to 7 and a half percent increased did contribution rate that was offsetting the liability gain this slide is the same story as the previous slide in terms of the changes in 9 unfounded a

you're seeing our biggest change due to the investment gain a slight increase in the unfunded change in the economic summation that again was offset by the liability gain this slide shows did historical experience in the gains and losses of the plan have you at gains and losses when they are different from the actual experience i'll see the draft is driven by the black line the experience of the plan so from 2009 to 2013 you're seeing those say a as a result of 2009 market crash and now in 2014 we're seeking a large investment gain which bill has offered from the

deferred gains we're projecting there are gains in the future as well. >> this graft is new we took two previous grafts of the history of the fund and our preservations into one groofl this is the funded status and so the purple bars or the bars are the liabilities and the purple are the liability for the plan and the gray and black bars are the projected liability with the black bars being years in with which we're projecting they'll be paid the lines are the assets the green resign is your market rate assets and the bylaw blue lines are the smooth assets and historically the assets the market rate assets their more volatile than the smooth wellness at 2014 which is

the last purple bar number two, percent funded and will be projected to be one hundred percent projected in 2019 if all the assumptions are met again, this is a new graph we're showing the ago gait contribution recites the gold bar portions are your employer rates and the purple are our member rates and back in 2007 and 8 they were around five or six rate and in fiscal year in 2016 that is the current contribution rate we determined in the r79 actual rates we're shown a decrease in our contribution rate and over the next 10 years decreases in the rate due to the gains we've

spoken of and chart amendments that be will paid off a decrease in the contribution rate. >> so we have standard economic scenarios we run the projections through this table kind of oils we have a positive and negative one shot 5 year to year moderate and 5 years significant plus or negative their derived from the capital market assumption distribution of returns over one or 5 year period they're not meant to indicate a projection of what the numbers will be only the sensitivity of the various investment returns we we so a series off grafts showing the

positive scenario on top and negative numbers on the bottom and funded status by contributions so positive returns increased the liberal hood of a cola and funding status in negative will wipeout the supplemental cola i think as i flip through those things the things that struck me those reflect the cost sharing by the way as well the negative scenarios used that $2 billion curb so on so the contribution rates don't go up like they do in the past like a one year shock the negative scenario the contribution rates remained level this was after the negative scenario that's the

message that come out of those it that you built up that curb on that provides protection against the medium contribution with that, the last slide in here on page 21 we put in a zero percent return for the current fiscal year because we understand current returns for this year are zero so we held that projection it is enough to eliminate the projected supplemental cola rate in the baseline with that we'll take questions and have the live model in monikers to consider other scenarios. >> i'd like to point out the news for the city is