the capital is called. >> this is called or not. >> 245ir9s not asset value so that's - (multiple voices). >> in addition other 2 housing unit $7 billion in uncalled commitments. >> after we started 2 - that's the problem with committed capital not out there aribnb money o money within

private sxikt. >> bill said all are mid asset called. >> what i'll suggest we recognize the change between the existing policy and the new policy as investments are made not when the policy is made but when the investments are made and off to the right what question show you know for long term policy that way everything is clear. >> and since your schedule calls for reviewing asset allocation early next year i think at that time, not only the board approves we review the benchmarks and to bills point everybody has this issue you put a long term policy for private

equity - bill said you can create an interim policy the ability to invest assets over time and create had is so-called a tactical policy there are pros and cons to all of those things we can address them in the discussion and make sure our confront with the benchmarks as well as the reporting this give us the best favor for how you actually did versus a policy that was operated over the period in which you're doing the investment but has clauses as pointed out. >> is that it. >> the challenge he referred to the 10 year numbers we have a

return based on for measuring the actual liabilities we say we'll loot h look at but perhaps our return is incorrect it triggers all sorts of disagreements and fighting and maybe a loss that's those numbers we have to understand what system at this time. >> this is my last i don't want to hammer it within the scope it is that complicated this is a 2016 which accurately reflects what we're doing today in previous equity when good evening invest wool have a total of one hundred you'll have the money has tobacco allocate on the schart. >> that's correct. >> so if we put zero we owe to ourselves to say we have the

hvsdz program we have invested money nothing wrong but it is more actual and there's a minimum we should show the long term policy. >> again, that's part of the feedback certainly tooesz to do but the policy versus the results that transpired during the period so okay. >> thank you. >> thank you for being open on suggestions i have a few of them first of all, number one this is really hard to read i have my reading glasses if you could make the numbers bigger there's a lot of kwhiert and naomi kelly

we have commentaries. >> this is the accuracy and number 3 i want to talk about some of the specific numbers as i said ravrdz the ability to read them if you can find a way to make the numbers bigger that would be good think page 20 our most important page page 20 this is your schuf summary question used to have those for people that liked the ends of the short story so emphasis that that is extremely key number 2 more accuracy of previous reports two digits to the right for the decimal here one that's a big deal okay a really big deal particularly with rounding errors to be consistent with how they did it previously to show two digits to the right if i could do that and number 3 the

accuracy of the numbers i'll didn't go through all of them but page four of the report you talk about the fed fupts the 10 year treasurers at the 1.6 down from one .9 i looked at the w . www.treasurers dot gov. i'm getting different numbers that is specifically the 10 year treasurer for this second quarter that is june 30th and yields of woven .5 from 7.8 down i got those from www.treasurer dot gov. we consider the primary source. >> i will check that's

specifically what they say if i look at that questionability that specifically states 10 year treasury again, if you have two indicts to the right of decimal that will help figure out the data source but two digits to the right of decimal it is very, very appreciative of that. >> we'll make sure we include that to two detection is very simple. >> you have round inner correctly it is not rounded. >> okay. >> the alpha we underperformed the policy benchmark i wouldn't clarify that has a benchmark positive i wouldn't characterize

that to review the benchmark is emergency room in i invested all the benchmarks so for example, a policy index for 3 months on page 3 thank you for pointing that out we did one .5 percent we're under for 3 months and 90 base points for 3 years and, etc. that's when i look at houses i'll consider verse the policy benchmark so 2 looks better by the 3 months is a negative we've underperformed the benchmark is if you want to clarify that bill. >> sure commissioner maybe i should have used assess return testators the first line item and it appears i mean obviously different weighs in the classes

that might not be the bank of the west matrix to use when i look at the alpha i look at the policy and see performances based on that all righty those are my comments i'll be brief thank you for presentation and look forward a point of clafrngs on page 20 the charts may we have that to the next page that's my recommendation. >> there are many ways. >> still 2kw50 small we'll work on that and presents something different and you'll determine if it is two small we've heard you and expand the decimals and increase of legibility. >> page 28 applies to the other charters i can't see the

universe medium symbol perhaps an explanation. >> the intersection. >> either in the paupgs but similar to the 68 percent number i don't see that as well that's fine but we use the number 95 when we talk about the rain water of return on the liability side so we put it on there i assume that is an important number to look at it and the explanation of the reports for the d b like to know who the pier group that much pier group we should know in the case people want to pick up on that and the same with the universal an explanation will help that's the first kind of reviewing the

context. >> since you brought it up 27 and page 28 are depictions of every dot on that page is a fund grandchildren one million dollars it should be 65 and in risk return space so anything if we say page 27 look at the one year anything above the horizontal line is a return higher than the medium public funds and anything to the left of the vertical is a very well outlet to the public funds if you virtually look at those pages you'll see during 24 period of time whether one or 3 or 5 or 10 year ending san francisco has generally returned a return higher than the medium public fund and the volatility is roughly about the same as the medium public funds threat the

takeaway you're not articulating a heck of volatility risk and average earned a reasonable amount our comments on defining the universe the medium is where the lines intersect i will suggest if so important for you to look at that one year result we plot you and your policy index and to commissioner meibergers point your policy index has a higher return in the one year than you actually earned we'll talk about where that came from but you're actually less volatile the actions produce less volatility and less return if i look at the trade offs your sharp ratio is arbitrate less in the actual than in the policy but that's adams a an interesting effect we

can say the acts of our manages or allocation took uaw from the policy return they returned the reflex are in terms of volatile i wasn't going to go through those in detail we want to talk about attribution look at page thirty those are the fiscal year returns the universe of the putting their lives on the line public plan for 6 fiscal years and see san francisco's numbers are at the top of every one individually but if you draw a line from the left hand at the 7 and a half percent you see not only did you not make your 7 in each in the last of 3 years but

virtually no one else did i'm saying that is good or bad this is a trying environments and all the criticism i came to you years ago is coming back because public plans are not aribnb their assumed rates that will raise a lot of questions in terms of the public so this just lays out for you what that challenge is. >> this is on public pensions. >> if he did this cooperate cooperates have slightly different they have liability matching stwraejz but the actual performance is not a heck of a lot deficit it is the environment we're aribnb low rays think stocks and bones. >> didn't calpers move they're done. >> the actuary is here to

reduce the assumed risk. >> do you know what calpers did. >> i think. >> actually, they have a complicated formula only reduce in times why they make their assumptions a thirty year plan with very little likely hood of movement laura. >> your actuary is here you have the afternoon assumed rate four or five years ago the medium average has comedy guess 7 and three quarters. >> how many reached they're what their experience now we can take whatever numbers you want. >> we'll show you nobody did in the last 5 years for your

informational purposes 5 years ago the expected recreate of return was 9 percent the actual returns have been less than 6. >> that's not - >> the reason he start this line of questions other institution that are achieving higher rates of return and if so can we capture those things. >> is there more you can do yes are there more doing it no the best public funds did about 2.7. >> never mind. >> on that note howard was there any again data set. >> there are endow time in this period they've dysfunction better than public funds that's

2009 always true we went back four or five years and tired to liquidate a portfolio they didn't do has well, we keep track of the endow time and others internal reven. >> i'd like to know how the endow times do. >> over the past year they were tough their average were negative one and a half percent port commission the same average return of pension funds over 10 year period of time whereas, a top performing pension plan has been 6 percent you know the top 10 top 15 ensue times are more in the low 9 to low tens. >> the top performing endow times and the pension system is

3 percent. >> over 10 years but over 10 years all of these numbers are very period specific to and that's true i have no reason to say we can give you that strategic not off the top of my head. >> okay attribution we have regarding the endow times different fiduciary standards i'd like not to mix a big thing as harvard before the financial crisis i don't know if they've gotten back to where they've been to the optimism is over rates harvard has not done well, i have no trouble seeing

the endow times a different set of laws and rules and fiduciary rooblts is different and many, many other factors i want to innovate make the apples to apples comparison and certainly for our transitional curiosity. >> we will should it as data there are modest very understandable differences they have doors we have tax base and contributors you know one thing i don't like about endow times they're very, very competitive with each other if you're the 6 or 7 rated ivy legacy school you'll get bounded out of town even if your returns are good the it up endow times

should consider where to take risk and how much rather than xairz themselves to each other. >> thank you. >> and to be clear the reason rechose public funds subject to the same rules and regulations so i'll never mix-and-match only ask for comparisons. >> i'd like a larger one that commissioner makras has discussed. >> i'll show you the rest and the allocation the number of trade off is a smaller universe. >> could shrink from 55 to a board significance. >> i'm not not asking for - then you're able to look at what they're doing and look at the asset allocation their track record and get a better

understanding where they're coming from if you grew up them, no foundation whatsoever other than the rankings. >> certainly. >> a question certainly pension funds they have subtle differences at the end of the day they're trying to minimum risks and everyone has a different obviously but maybe something to be learned into say endow times that have out paced you guess by 33 percent that's sixth that's billions of dollars and under opportunity and overfunded i was trying to understand. >> there's something to be learned from everybody you can corporations have sensitivity about the volatility that is

defined the benefit plan we're introducing to the balance sheet that's something to consider. >> the you know the top endow times have been return permissible and there's something to be learned from everyone. >> that's my point having the data to be looked at. >> the point whether asset allocation is a public funds drives everything less go back to page 27 it gets f it and why look at page 27 the do not are higher returns not many of them by notice everyone has lower volatility i think we'll talk about this in asset allocation that's been a successful strategy in the most recent one

year period and going forward given the market value that will likely be something that works in the future we may learn out of that but to our point i can get you a list of individual funds. >> how the did and look at those and pick those that are close and different this is a at some point to try to engender this discussion. >> commissioner stansbury the difference between 6 and 9 percent is $600 billion over 10 years it's a worst pursuing and how to - what is achievable institutional differences and what assess do they will have we

don't but given the magnitude of the potential of the status and a permanent institution our are timeframe is correct i've been on the boards it is worth learning from. >> transmissiontion but page 33 i want to use this as an example not using it in a meeting but easy to see in porter how the numbers are clawed and a longer periods we'll weigh terrier to take the dollar performance against policy the rate of one and a half versus the policy of one .9

we are going to break down into how much was manager or outperform of benchmark versus the over recreate of the classes that did well and those if didn't the actual returns is the line the selection effect which is the average effect of managers under or out performing the index negative 40 base point voourp all the managers were under performing very little allocation to see it to the chart to the left what you'll see is that private equity was the culprit now you have within of the bank of the west equity projecting programs but that's 5 hundred plus 5 you under

performed that in effect was significant i don't think that has nothing to do with with our asset class you have to take with that a grain of salt on the other hand, equity has been a consistent underperform for the one, 3 and 5 years we can draw a realistic conclude what the corner will say mostly the manager and u.s. equity and previous equity with the back deputy director i'll under penalty of perjury you to a one year and 5 year period so the period under performance versus policy of 90 base points noriega 20 percent is selection and 60 point is allocation on the selection see you still see u.s. equities under performance you see private equities but much,

much closer and fixed equities if you remember people were worried about the rates and you took a lower benchmark you underperformed and it was a strategic choice not managers doing poorly on the allocation you'll see the tack i didn't line the biggest effect of allocation were up underrated private equity that's not a structure effect with that, look at 5 years because 5 years you start to see something you can begin to take action on for 5 years the performance of the portfolio of 7.6 percent the benchmark is 7.8 smaller under performance and if i look at the

commons you were positive and most of it was the allocation the under allocation to a nice performing asset most of your asset out performed the benchmarks and look at the line private scombikt you own 1 percent a year your benchmark is 17.7190212.2 percent plus 5 percent i think when we talk about asset allocation and the covered california people will say expect the 15e7 is not likely to happen and perhaps subject to adjustment the u.s. equity is a systematic underperform you draw that conclude and other classes with the fixed income have done

better that's the attribution page you'll see that each time i'm not going to go through the remaining pages but they get into the asset class versus the assets and then the last area he'll calling your attention is all of these are performances versus benchmark you go to page 50 let me - yeah page 50 those are our asset classes composite versus pier groups composite 24 shows you in a return and a risk adjusted basis how you've done versus our pier group the amortized you see the ranking and the tracking error and if you're trying to sxar reluctance

on a reflex adjustment cross the managers the information ratio which is the return for units of tracking area or the benchmark for the tracking error the information ratio and the rank of that how you ranked so again, if you look at your u.s. sxikt 74th percentile on the risk adjusted basis that's not good and fixed income i'm sorry international equity and fixed income 23 and core plus been dramatically resteward by over the 5 years didn't do well the bones were well emerging market debt well, when you move to private assess those comparisons are less relevant we are reporting for previous equity in

real estate versus our piers and our volatility and again, private sxekt top in the performance of they are private equity and real access is again good performing program i should have said all the data is time rattled the industry standard the industrial standard becomes dollars price you want to understand the performance you go to the dollars rated those are the consultant rotator. >> thank you and dollars rated we had to put everybody everything on the same score cards. >> i'm available to answer any questions. >> can i ask you for the u.s. xiblt under performance.

>> yes. >> between the effect of performance. >> if you look at u.s. equity we look up the data and let me go to page - >> pages 38 - as the details of i's equities large cap equities it is where the under profrmg and the index did well i would say in the period of time if you talked with your sxikt managers they make their money when lots of of cross section volatility and differences dwp good and bad stock we've been in a period of time the market value are driven by the banks is everything went up and there was not as much cross section volatility and a

period of time from the managers if i look at where the index ranks in the universe the russel one thousand on page 38 right below the large cap the index you'll see ♪ period in the 3 years or 3 months in the top 29 percent so the 5 years in the top 20 percent he hope commisssioner bermejo commissioner meiberger maids the point it is try the index few minutes did better than active management it was challenges to begin with and go down and look at the managers that out performed or underperformed and see where the contributors were a small cap xiblt we've talked about and the manager has had a challenging time with their orientation and so those are where the under

performance and went r remember the 5 years are managers innovate here anymore in the numbers with the come pathologist but in the current manager >> those few minutes that have done well, that the selective equity managers those managers are replicated the index who is. >> on this 20 percent of managers in the space other performed the index not a lot that do who found them? and it is hard to answer high active share manages and the bigger managers tends to be pushed around by the macro interferences >> yeah. >> pluses and minuses.

>> so maybe a contribution for a 5 year run. >> it's hard to say exactly what will happen but (laughter) again, you have a period why you have more natural market forces at play it creates an environment where active managers do better they understand the market where the federal reserve are we're going to see more other performance by managers a yeah. >> we've had a lot of discussion getting into the detail thank you very much for the percentages. >> what's the key level tossing that i want us to take 23w4r the presentations particularly as the conversation

around asset allocation how do we moved in a direction that we're performing we'll to be. >> a that's a good question. >> that's all this reporting does is look back even the last 5 years you've done well, because of a lot of equities and done great in areas and fairly voluntary i will portfolio and we think going forward lowering the volatility of the power point h portfolio will help we think that more difference indication versus private debt and broader difference indication the controversial -

index funds overlarge period of time if you have a staff of two i'll say index but you have a large staff it is an expert staff and good consultants. >> so you say so yourself. >> hershey can't tell you i can visa you are manager you potentially need to earn more from your manager contribution and probably need to lower our volatility and expand some classes in order to survive the coming environment you'll get maybe not 7 and a half but 7 a tough environment not a magic

bullet you can do better and you're done well but will not do well with your private equity funds well continue to side well, you can only put so much money. >> given the hour of time and the amount of schedules airline to move on further for the next item. >> >> is no further questions move on to the next item thank you, alex. >> at some point would like to see more about opportunities in the market for maybe your staff more accurate risk and shares (inaudible). >> question should put that on the calendars autopsy will did,

will do jay and i will discuss that we'll address that question. >> the idea - if i could just comment on that i mean at can point i've been on the boards for 24 years ever since my meeting the u.s. 345shg9s are if you find one manager that will out perform went as. >> showed 84 percent ecstasy a loser's game their efficient and find another ways to play. >> actually you're saying we are in the top 20 percent

80 percent of the managers did worse than the e. >> we've been successful and those did he minutes ago. >> not the last time i think actually, if you look at the data we're in the 45 or 50 percent not an 80th percentile this was a whole other subjects we're - >> maybe more directly along with wendy and maybe have a direct discussion on modeling index. >> where we have problems. >> let's not just years and say we're hidden but let's look at what we've done maybe for thirty years and take the

longest time and do that adequately and look at it. >> okay. thank you next item. >> i can tell there was difficult. >> any of the 80 precentors. >> with respect 2509 manager report one manager that is 03 our high yield and longer serving managers were at for performance versus benchmark peers beyond that any deletions and that would complete me commissioner lim unless questions. >> questions. >> no questions. >> all right. thank you let's take public comment on items 8 and 9.

>> the money managers have very complicated and very, very simple have to listen and read thing and commissioner meiberger right now he has i think 14 months ago and hedge funds 14 months ago he had hedge funds top manager that out performed with the index he guess what 14 months to go and - anyway right now the hedge funds private hedge funds are off dividi21 pe so - to because of endow times

their supported to be and hedge funds salesmen are saying we'll give you protection as anyway it should keep things simple and listen to commissioner meiberger and what is the profit that can urban design the best investment in the entire world and commissioner meiberger agrees with me anyway make the investments simple as indexing i don't care what the xoichlts but you pay less than a quarter per and the hedge funds manager (inaudible) to get a 5 percent (inaudible).

>> i like to say if you have 5 percent (inaudible) with one million dollars in management and platform so basically devesting right now before you loss millions of dollars right now. >> thank you anyone else want to comment on items 8 and 9 public comment is closed. mr. clerk item 10. >> the annual report and recommendation of the investors. >> this is the annual report on tobacco you've got the information flouven devesting from tobacco in the prior 18 years the information with regards to performance over the trailing one and meow years for the two areas of indexes in u.s. large cap in changes to

the recommendation that staff is making over the meow years we recommend to remain devesting from u.s. tobacco with that opening up to comments. >> to divesting tobacco over 18 years this is one. >> within the u.s. s&p 5 hundreds yes. >> (inaudible). >> i'm concerned done calculations because of there's value of the i's dollar assets that will be in the tenth of million dollars potentially higher i can get you a more accurate number. >> this is something that is $10 million. >> that's my estimate correct.

>> i'll argue that tobacco stuccos are risker you're creating a product and doing month public good 1922 a higher risk their bankruptcy the lawsuit lost which i sxhmd the accuse so i'll argue in their risker so obviously if their riskier one should expect a higher rate of return not mislead they're higher if i have tobacco but argue the risk is higher and august that the reflex is not rfbd in the data that is the standard risk measure significant business reflex for the tobacco stock how do we know they'll be around in 10 or 20 years if you look at the action to do away with tobacco as a health hazard i'll argue that indeed the returns

have been higher with tobacco but the risk is higher with tobacco stock. >> how can you argue they're higher without risk. >> the returns as shown on page on the report the risk returns are higher with tobacco in the proposal i'm saying that tobacco is a higher reflex with a higher risk you'll expected higher rates of return this is a substantial business as well as financial reflex with the tobacco stock but not r6b9d that deviation we saw this with the private portfolios that was presented that showed do portfolio was 6 percent 6 percent when this is amongst the hive 6 percent is closure to

bonds and previous equity not close to bonds so if measure the full risk of an investment. >> so just to summarize with tobacco has done better because tobacco stock is risker. >> a concession item. >> i'll move the item. >> on that particular item for divesting do you are a staff recommendation. >> yes. passed and staff didn't make a recommendation can you explain on one our making one recommendation and one not. >> we're supporting the boards action 18 years ago where they directed the staff to bring back

the plan to devest so we are supportive of that board action we'll remain supportive of that board and a actions and bring that back every year to add of subtract we're doing the same thing we're here to support of the board in the decision 18 years ago i wasn't here but building that staff wouldn't have made the recommendation, however, a social recommendation on the board. >> and any discussion on that captain no all right. so there's been a motion move forward by commissioner makras a second and commissioner meiberger second can we take that without objection? the staff recommendation one point >> okay. >> i think those standard

deviations for tobacco versus the tobacco free is the same in the last 20 years so the same amount of risk for a rate of return i'm not advocating we keep tobacco but a good example modesty cause you to pause devesting has consequences any time they work against us financially and socially it is an issue that is something that is important for us to be mindful of. >> great let's take public comment on this item. >> thank you actually in this case representing the seiu with the retirees i just want to understand a couple of points when you say

you're adding different companies i see that in the next item that means those are the companies you want to divest from as opposed to to the companies you're investing in i want to sclafshgs and thinks for both of the items where how much you've the divestment has been custom telegraph hill ether meow years from the $6 million if we can get that information and also where did it go where else was it involved in what other kinds of funds be with tobacco in sudan thank you very much. >> public comment is closed. mr. shaw answers to answering those questions. >> i'll work on both.

>> you'll work on both appreciate that without objection all right. this that item passes unanimously thank you mr. clerk item 11. >> item 11 an action annual report and recommendations on the targeted investment in the sudan. >> thank you. >> all right. there's been a motion any public comment? >> no public comment all right. staff anything you want to highlight in the submitted document no - >> okay. we'll accept that has a motion to accept a second to this motion. >> seconded by commissioner makras and seconded by commissioner meiberger and without objection this thing passes unanimously 12 an action item. >> is there a discussion. >> any proxies come up.

>> thank you okay. thank you madam chair we have a fine month after a slide our portfolios is up 3.8 percent and everything in the green with the public sxiblt marks over 5 percent and to highlight if we turn to the next page there are go things i want to highlight under compliance 4 percent in cash this is the policy is one this is a temporary situation we're funding our treasury index might be coming about soon very soon we will also be making our first hedge funds investment

through black stone on or about october 1st, i think technically accountability first this item is going to it will fall to one percent or less sometime shortly if we - i'd like to turn to the grateful chart showing the net assets and your assets are at a new all-time high $4.9 billion that's very good news and another part of satire and i use the liability slide want you to turn to the far left of the chart and it will say at the end of december the liability for $14 billion roughly and now they are about 24 and a half or $25 billion so while you are portfolio is at an all-time high our status over

that periods of almost 10 years about one and 25 to the low to mid 80s a couple of things to note in the economic conditions i felt that allen's report provide some very, very helpful graphics and charts so some of which i'm concerned referred to here on item number 3 this is the black stone agreement that was approved by the board last month and finalized on september 6th on the next open item number 4 obgyn bridge is a uk bans xiblt firm we asked for 40 million it was approves we received that the next item number 5 the c i m approves by sideboard in

february and approved just a few days ago the custodial search very good news it is progressing well the - questions are on good place it make a recommendation either on october 12th or at the november boards meeting we're optimistic we have a meeting this morning and as long as we continue on the same path with no major hiccups but to make a recommendation on october 12th i'm expecting november at the lastly personnel we have a person to help us jeremy moving from the east coast and keep joins us to help david manage the asset return strategy after

a criteria at the states street and also i'm pleased to announce that dennis can you please stands or wave you are hand okay. dennis - >> can you stand (laughter) so dennis jones our team the investment team if the administrative side of the house where he was proven at the analytical data gavrths and decimation he'll help on the public sxikt portfolios. >> it took awhile for him us to let him go and adverbial available for the house or the

development committee meetings next wednesday 1 o'clock we are schedule to have black stone and david's presents on the salute you return and have several guest speakers one from the puc as well as others and lastly the updates in the preferential shuns of the existing information and that concludes the ceo roster. >> colleagues me questions nothing we can go to public comment. >> public comment on the cio report okay public comment is closed. dennis welcome again. >> (laughter). good to have you keep it in house and this is a discussion item move on to item number 13 >> item 13 the long prom all

right. thank you. >> thank you good afternoon commissioners thank you very much for your times today, i can't say stop smiling i have excellent news to share with you today as you may know we've been working diligently on pulling together a loan program at the question of our city employees and after much anticipation i'm happy to announce the loan program wear proud to offer the first ever loan program to city

employees through the compensation plan so before you say a presentation that covers the details of launch including an overview of the program, some staevengz as of last media and client feedback and a special page to thank all the partners for the thousands of hours for putting together this program we want to ask the president for permission to go over this presentation. >> just in the executive summary explains that the program was soft launch by design on august 18th last month we made a loan planters can visit the website and the first page the loan repayment after

the loan is taken out occurred successfully on september 6th last week market to be a successful completion of a cycle so the purpose of the soft launch to make sure that is working and as partnering with payroll and financial and first and sfpuc staff the successful launch the program is nunlsz page 3 a consecutive loan program from the loan policy the top half explains the eligibility requirements to qualified folks can take out a loan and the bottom covers the maximum amount as much as $50,000 or 50 percent of your account balance a administrative fee for the loan $25 every year

and $50 is charged to set up the loan payroll deductions and prepayment is available in the event that clients want to pay off their loan sooner before you i continue any questions on the launch or the details of the program oh. >> the next page covers loan statistics as of last media he finds this to be helpful so as you may know the interest rate is the prime rate plus one as of look 8 slash 3 one it is 8.30 and general loans have been approves within loan has been approved and the two is the term year differences and the additional loan documents to support a loan application

we're noticing the majority of participants are borrowing the maximum over the long time term so in their taking advantage of the loan program for 2 thousand ether the lofrnt term we're seeing the obviously balance creep up it is significant over the last two weeks we've have north of 5 and a half million dollars in outstanding loan balances and will make sure that people are saving nor retirement and to make sure it didn't impact the plan. >> do we have a cap as to how much we're loaning outs say when we get to one billion dollars negative impact loans we're going to suspend the loan program. >> i don't know if we can do that but we do doing everything we can to make sure that people

thinks the consequence they're taking out a loan in the following page the education their comprehensive by the limousine people understand they're required to read the loan guidelines with before they take out the loan so it could impact their satisfying in the future so we're doing everything we can on the front ended to make sure that people understand so they can make the bank of the west decisions for their retirement the 200 and 17 folks found it while their logging in we've noting married on a fofrl announcements. >> i think there was publication or publishing of it in the poa journal and expressions for certain

situations their looking at for that it we're hoping for a couple of hundreds and we have over 200 and prepared to basically today announce that we've successfully laufrnld so as far as promoting this bathroom, we would be dealing with with committee by today newton's the successful launch. >> thank you. >> the average age of the borrowers is 47 and the mediums accountant balance is 70 thousand this is a significant number not maybe a lot but higher than the national average around $50,000 that's great for our participant and the medium loan balance is 50 having k is 23 enthuses they're taking half of the balances and the retaliate is 200 and 50 my name

is other than the longevities term wanting to pay as little as possible that's it. >> you need to be an active member to qualify for the loan you're working for the city and retire and but you're taking out a loan and still responsible for the where you're working for the city or not. >> there's a broos for those request who terminates to pay off your loan of 90 days. >> ambassador 60 o $50,000 today and in a month your are tefrment or whatever. >> your bothering your own money if i choose not to repay

it is recorded as a taxable distribution so in obviously removed from not in our got you don't pay it back so the penalties are significant from the taxation perspective but no lost to the system because people are borrowing their own money to our point is there a maximum to be borrowed out we can't limit 50 percent of active members account that automatically sets a limit but not a dollar limit amount. >> you said if they retire they have to repay and we've covered every scenario you might go out on an unpaid leave and made an agreement to pay it back and may be called out on military leave that was presented to the board through

the loans document but communication pieces are clear what will extend our period and not spends and what happens the only onyx to pay over-the-counter as as check or payroll deduction they're not pretax and that again is by design. >> all right. >> great, thank you so the feedback on the loan program obviously has been very good the as you may know it the online straightforward the education materials are comprehensive by the limousine participants have expressed deep appreciation for the cause of experience we're experiencing an uptake of loan squalls and slight increase in walk and traffic people come in to talk to the coincidence

coconuts one of the positives are withdrawals are unforeseen draurlz they don't need tobacco paid back unlast week, a loan in order to actually qualify you need to first quality for a loan we try to very people pay themselves back and finally because the loan application is online only we have seen a lobby constituent and those who don't say security assess we help them take a loan any questions. >> thank you. >> this is a wonderful report. >> hold on commissioner driscoll. >> i'm concerned talked with people in their programs and

some are 3 as some 40 one k we started it operational it is going well, this is a piece of good news but a leakage we have to understand what the impact an them if they don't pay back the lane if so it geared for retirement the educational materials where don't as a distribution how that effects they're tax situation that's why the loan program the loan application is quick, however, one group says they have a memory of thirty days they found out a sect group decided he didn't names and addresses it so that was a couple of plans had that little they know in there

something like that how it effects the part of this program. >> those are ideas going down over the next couple of years may want to talk about the improvements making that operate well and try to make people thinks what in their doing with their savings account. >> all right. let's take public comment an this wonderful program green from the piano anyone else want to talk about this program all right. public comment is closed. i'll appreciate this great news. >> i'm concerned heard you apply for a loan (inaudible). >> can't believe how fast it is. >> wonderful by design. >> all right.

>> you want to call. >> item 14 discussion the monthly manual report. >> thank you, commissioners before you is the monthly activity report your familiar request has been update to show the loan program as well the change to the reports at this time i'd like to ask if there was any questions. >> questions no. >> let's go to public comment. >> public comment on this one. >> all right. seeing none, public comment is closed. not a problem mr. stansbury please. briefly that communicating on accepting the items for the broker and (inaudible) within of the future solutions (inaudible) maybe something for future consideration to talk about the u t f for the (inaudible).

>> yes, we'll certainly discuss the cbo a small fraction of the client base but only a small components we'll discuss that has a platform. >> so let's keep an move on thank you very much for your presentation and let's go to item 5. >> an action item amortization and joint to the 2013 and 2014 h cola for the retirees. >> good afternoon commissioners to continue our discussion we began last month we need a minute to bring up the

presentation. >> are we having technical difficulties. >> we did again, that last month and the decision to be made just regarding the post 1996 retiree

and the impacts on the july one evaluations the current funding policy will be a 5 year amortization of the liability, however, a special circumstances and reasons to consider longer amortization period i hope we gave the board enough information to have a positive - the amortization making a faster amortization the city is in a position to funds the plan at this time and make sense rather than dragging but payments and costing more the dollars is $400 million over the presents value of each amortization is the same on today's date but a longer a.m. shin period over the long run and let bill start.

>> thank you so a continuation over last time we recognize a lot of complex charts and a lot of things to look for the city we want to briefly review this situation and move to have a board discussion and decision we had different scenarios but essentially the issue is that we have been operating under the assumption that supplemental colas were only paid for if the if i understand is fund the court decision members 0 who worked avenue november 6, 191996 and before proposition e passed

not having the full funding requirement we're in the squeak of post 96 retirees than the board made a decision on another group we are receiving to as pre97 retirees to keep others terminology straight those determinations were he restored the supplemental cola's we suggesting that the impact of the restoration of those about reflect in the evaluation based on the plans in effect as the evaluation date the post 96 in this evaluation that happened before july 2016 in the pre97 red cross in the preyou have

decisions after july one 2016 and measurement dates are the evaluation is july. >> as a reminder we paid the majority of folks in the this year of february that's where the money was paid out over the 2015-2016 year and not paid the prebut we anticipate those folks will be paid and recognize that in 2017. >> the decision we are asking how to amortize in the evaluation for the posts 96 retirees impact and have to deal with the pre97 within the next 5 years. >> so i'm going to cover what the actual costs impacts of the supplemental cola's starting with the post 96 as a stated

this is a gastrogroup of retirees paid their supplemental cola's as of february this year two pieces are the retrofit payments and another piece of the plan the expected fire chief value of both 2013 and 2014 supplemental cola's the retroactive pamentsdz payments were effective to when the direct were paid and then also a confident of $350 million to the increase in the accrued liability for the presents value of the expected payment for the cola to the total for pre96 is

$43 million. >> the cost of the pre97 group is about 1/3rd find coast and as jay said not paid yet the approved liability increased for the supplemental for this board one and $15 million the back payment will be one and $35 million no interests for those payments the total factors have increased of one and $55 million. >> yes. >> excuse me - >> on page 4 it says page 5 it says pre97 are those pre96. >> pejorative 6, 1996 yes. >> i'll call it pre96 is

prenovember '96. >> we did to and the excited line is the pre1996 just to be clear. >> continue saw to the question how should the plan pay for the supplemental cola's a better way to phrase that over what time period to pay it off. similar to a liability not pay for it all at once a decision to amortize this cost over time and the longer than timeframes you'll have a higher coast in the short time but also have shorter paying the higher cost

if you have a longer amortization it is a longer period of time we laid out 3 possible funding for the board you are first for the amortization policy which is to amortize the supplemental cola's over a 5 year period and the rational this is a retiree benefit change so it should be amortized ether riffling short time and when - those assess returns over a 5 year period and the special cola is recognized over the same 5 year period the additional cost is offset by the gains we'll recognition it is like a

balancing act that's the rational our second opposition that we laid out to follow the funding policy that was in place on the executive date for the cola the policy it's a wasn't have been amortized over a 20 year period and that's seven years going forward with the 2014 supplemental cola the policy has changed as of 2014 to amortize the cola's over 5 years split the psychologist for amortized over 15 years and over 5 years

>> to amortize the fire chief lifetime of those members that are receiving the cola and this post 96 group the average future lifetime is again 20 years and the rational you don't want to pay poor the spill cola's past the time the retirees are no longer around in the 20-year period an amortization sorry. >> (inaudible). >> right. right. >> you get catch up in

immorality so currently in the charter the amortization period is 20 years this option though was select a special exemption for the funding policy that is currently adapt by the boards. >> the next slide it is talking similarly about the pre97 grew up we're not making a dedication but don't oppositions for 3 group when we discuss that the current funding policy of 5 years for the supplemental cola and the third option to use the average future leechlt for fiscal year 4010 not providing the section opposition the amortization periods is don't along longing when you, you look at the average future leechlts of the cohort so for the pre97,

5 years for the cola or 10 years we're not making the decision now bill will talk about projections and look at those openings they they impact the employees and employers side. >> we have a series of projections in your packet from last month and also have models so model any variation we are starting with the baseline and adjusting for the returns and bringing in the option i should say all of the oppositions here because this is their projections they include the pre97 retirees a smaller

amount a smaller impact we put that in for consistency. >> all of the projections have an assumption about future supplemental cola's coming to fruition is when we do the evaluations the values on that evaluation don't assume any supplemental cola's but proeng forwards no 100 percent full funding it meets the material projections with the supplemental cola's are so we put in assumptions that every year we'll have half of the supplemental cola grants equivalent to granting a supplemental cola every other year and one year they are granted

and am amortized over the future. >> i want to make sure i follow you. >> there's a probability will be better than 50 percent of the time. >> so above that. >> the theaters the base for that. >> in the presentation all of the drafts the top draft shows percent of pay and that is prior to the cost adjustments the dollars amazes are after the adjustments for the contribution level the total combined is the same whether you show the costs or not that is the specific amount

- so just with the one .3 percent return this projected contribution rate somewhat from the prior evaluation and the red line represents the prior projection and then. >> can i ask a question one more. >> sure. >> you can see the we went as a percentage of pay when you got ou 2030 that is up to 20. >> thank you.

>> we put in the supplemental cola's for wr6 2014-2015 and amortized them by 2022 we put the triggers line on these gaps so at 21 navy percent we'll raise it above that an adjustment to the employee contribution and next is 27 and navy percent as you can see it gets above the 27 and navy trigger for 4 years

from 2023 and deputy directors blow that 7 and a half percent returns 23 we adjust the the amount amortization we have a slightly higher rate ongoing. >> we have shared this information with the city particular ben rosenfeld the controller we've not had i'm concerned not had a direct conversation with the option 20 years but he's indicated to me and us the city for obvious reasons prefer the high reflex 17 years and 5 years for the

amortization of the cost of post 1996 folks we're aware how we did those but for the decision that is made he does have stated a preference for the second option we've not discussed the thirds option as a possibility with him. >> with the option. >> we've provided the presentation. >> (inaudible). >> right. >> just wanted to answer that. >> so slide 15 shows the 20-year amortization of 2014-2015 supplemental and again, we have a lower peak in

the early years but higher contributions because your spreading it out over 20 years. >> the slight 16 puts all the charts together for the contribution rate and four different scenarios this is - shows the dynamic how it's describing the 5 year amortization is the short term and this is the long term off the same 5 years and the 7, 5 is in the middle of keeps the rates - same pattern in the employer contributions

a dollar amount. >> i'll ask him to go back. >> okay. thank you. >> very much the same pattern looking at dollars except a general trend the rates assume payroll growth to 27, 5 percent a year. >> so with that, those are the options we've laid out. >> we've seen too much. >> (laughter). >> any questions from any of the board members. >> no. >> thanks for consolidating all the graphs think page 16 we want

to said go what it says the page before that page 14 not because the controller is expressing a pretty sure this chart didn't include the one .6 year fiscal year; right? >> all of those charts include the one .3 percent return. >> all of them. >> all of them. >> next question i'll do this this way a future supplement meaning that half the time? does this include or assume other - and according to the schedules >> it currently has. >> okay because the 5 year rule with the

best practices employee. >> yep. >> this on or about maybe jen put it in her memo the 3 options. >> does the issue paying it off faster, however, an impact on the post 2011 grew up they're paying for half any guidelines or rules that all institutions maybe not a actual question but the bank of the west thing to do and yes is the prop c group you are talking about they only get a supplemental cola for the plan if so it fully funded and so you - the shorter the

afghanistantion the quicker, however, the variations that come with the investments over run this size. >> and then the 20 year leave expectancy for the pre96 is that based on the real understanding of the group this is a fairly wide range. >> that's a 20-year the pre96 folks have 10 years. >> okay. thank you. >> that make sense. >> that's why we're saying the outside of the options we'll presents next year will be 10 years. >> any other questions. >> an this. >> ideas? >> not yet.

>> so we have to make a decision. >> we need a decision yes. >> so i personally think that option one for are good options and the middle one is more for stability to returns and contributions i originally thought that option one might be nice to take our medicine now and move forward with that said owe o /* -

>> i have a similar commissioner kim i see why this might be successful i don't think those 5 years numbers simply to keep it below but important for the city and the employees in this which is about 80 percent if nothing else changes. >> that's a big if that's what the one .6 an average number 7.5 is not average we're alerted we'll have difficulties doing that being we'll have another set of actuals that is something like being out of control and has nothing to do with with the

supplemental cola's i support the my mind opening statements the 5, 17. >> because i know we have examination with the quarterly the 28 percent of cash tell mr. rosenfeld there are in prepayments if they want to pay the cash off sooner if they're interested (laughter). >> okay. we'll take public comment on this item. >> yes. public comment. >> rc sf i realize we're the recipient of cola and our active

colleagues are at the other ended i thought i heard one hundred million dollars is the middle onyx and another four-year option. >> between the 5 year and 20-year. >> is the long terms. >> i was hoping that sxhurg would turn his statement into a motion i think you save money in the long run i understand the consequences and the fears and anxiety with regard to that and option c seems less painful but you can get it ether with much more quickly and more super bowl city for everyone those contributing the active employees and the funds so our

perspective has been the 5 years so thank you. >> thank you. any other members that - (inaudible). >> public comment is closed. >> the matter is back in the hands - >> i'll make a motion. >> any other questions a motion out that true i move option 2, seven years for 2014. >> a motion by commissioner murphy's and seconded by by the commissioner driscoll can we take that without objection? few weeks let's do a roll call vote please call if you want to have a discussion on anything >> what's the alternatives. >> so like the alters i'm not

advocating alters. >> you want to say why you don't like it. >> i'll say - >> okay so let's do a roll call vote. >> commissioner cohen commissioner driscoll commissioner makras commissioner meiberger commissioner paskin-jordan sxhurns that motion carries that item passes. >> anything else no, i appreciate our presentation thank you mr. clerk item number 16 is the society director's report. >> briefing we are providing the annual memo from the city attorney regarding the political activities by the employees and urge you to review that has we go into the upcoming elections and provided a letter that of

those sent to me on september 8th from ben rosenfeld controller recommended to a request to the retirement board related to the decision case and go to the final bullet we're in a position we are encouraging board members to accept i pads from us and through the e pads able to download internal revenue board package with the folks who want them by building it is a more secure way of transmitting closed session materials so we would basically is a this is something we've been planning for awhile but ready tee roll out if you don't want your own e pad please let

me know. >> the monitor it. >> no. >> no, what we do we load what you need for business and your possession we will maintain and support the programs that we put on that what we're concerned in that much more secure way of at that particular time materials sometimes. >> you want a appoint act o p >> the data with and can go away after a period of time so it is helpful that we have this as a metabolism right now we do have

a metabolism go to a without a doubt, and commissioner paskin-jordan and others have downloaded from a secure site but not provided closed session materials this way we are condensing a secure way of disseminating that information. >> we will get paper though. >> absolutely and meeting our requirements because we'll have independence merger services that is amazing to us that it will take two or three hours from brass it picked up if you have concerns then in not we'll order you an ipad you'll use for

conducting business for the board packets. >> i wonder fib it mass enough to store. >> it is important to retain. >> (laughter). >> i thought you were going down one line this is a unique group of us that find actuary information we're going to do the middle one and 2 allergiess so. >> so the security on the important items does it sleet

automatically and innovate forwarded or printed and automatically delete a reasonable period of time after the boards taken action other than that, i mean, i'm most concerned about the material recommended to the applications and that oftentimes is simply information we need to protect 2 we need tobacco smart 2, 3, 4 little way we routinely only provides the packet and it is sensitive a material. >> how do you feel about the accessibility leaving the investment side advertised material question can go back to and review. >> we tested the foundation outlet and have egg discussion

at the materials that stay with refresh my recollection to refer a year from now for closed session materials certainly all we are doing it testing the protection of the information and putting it auto desolate a tool for you and provides us the ability to feel better we're providing the information more securely we know that certain folks prefer paper sometimes to write on but the ability to make notes and that type of review. >> all right. >> thank you. >> when are you rolling them out. >> as soon as we find out we'll have them rolled but

certainly bends of the year by christmas by the holidays. >> you might are noticed we are presenting a listing of fence and educational continuous versus what we been prepared before i think that is more concise consolation of opportunities i'll be happy to answer any questions you may have. >> we are actually contracting with your vendor to make some radical corrects to the phone tree to flatten it so we can significantly cut by 2/3rd's the amount of time it takes for someone to get to an area we want to get to age interim

prosecutes i'm not sure we're expecting a bid from the developer the city is going to the same provider and get the contract certainly been long term to present to the board in october or 23406 we have chris who he is recently joined us for that area and we will give him a chance to tells you his perspective so should see long term supplements but 345e8d trying to undertaken the thing so you don't will have to go through some many stages to get to where you want to go. >> do we have an issue where

someone as information - >> calling call back or make the things alternative ways to get in touch with folks. >> we certainly have. >> have we considered implementing those and we have not. >> we've not implemented them by certainly consider them and part of the progress of strategic planning what we anticipate we'll be able to do it comes down to do we have staffs decision to respond to e-mails versus do we have people enough folks to responds to a phone call the same thing. >> at every budget meeting we ask we have had staff to do

everything we've not for the first time to have enough people to pick up e-mails let's do 2 we want to be more responsive let's fourth how many personnel we need and train them and dpird that. >> i'll cleaver not saying we don't have enough staff to meet the obligations we're going in the strategic planning as commissioner makras pointed out to prepare and if there's a new expectation we're to have more folks having they are phone calls answered we'll have staff support someone e-mails and turning that around that's what we consider when we go to committee as something that we recommended or the board has told you told us we need to do i

believe that most folks that contact us are willing to tolerant the amount of time to get through the technology definitely outlined and need to update it and decide it independently or through the city we learned the city can take a lot of time question don't have time to wait that's why we're doing the intermediate time for staff to support. >> i appreciate we need to look at how we want people to be able to get in touch with us don't we have a staffing for that if we don't we should sends to the budget committee or guess finance committee the biggest complaint i hear all the time

that is difficult to get - i'd like to make that easier for peep to get answers to their questions by some sort of human contact it is not just making a phone call i think that we have to do more than that it goes back to the finance committee i think that we should talk about that. >> it has 5 thousand members calling one hundred staff so lined we have to make sure that we have an appropriate breaker level response time turn around time what we are trying to do and stayed in the strategic plan we are trying to off-load most of reasons that folks have to come here including retirees to have access to the website now if i have a fun question i'm questioning the information i see think a website that leaving

an e-mail note get back to me but those emergencies he need to talk with someone immediately we looked at the standard if you 50e78dz a request for a francis scott key back i'm concerned not seen that has typical but a way that many folks we have some employees that have no assess during work hours to e-mail or to a pc so make sure we are serving everything we will not have been over the other but provide and. >> we'll have a full discussion not on that agenda but for future dates. >> maybe get that agendized if we need it. >> in the next couple of months. >> looking forward to visiting

this. >> great. >> we took public comment on this item sir, does this complete our presentation. >> yes. thank you. >> thank you very much since no action needed on this item call the next item. >> >> retiree board member i want to recommend a calendar item the chair set up a chair or subcommittee or ad hoc to address the system we have benchmark what we have and bring back a recommendation on the standard of communication to our members we believe is appropriate and back it up with

a appropriate budget with staffing for the recommendation. >> it is you if we as a body don't know how to communicate with our members we've failed our obligation and the fact we have 65 thousand people makes that that more important to have a obviously how we communicate to go on the website to find a phone call. >> and can't say find a phone number so we can't communicate with your orientation that to me saying we're not inviting. >> that would be helpful to have that agendas decided.

>> public comment on item 17 any public comment public comment is closed. >> call item 18. >> 18 a discussion retirement board member questioning questions or comments commissioner bridges has submitted a report public comment on item 18 seeing none, public comment is closed. please call item 19 >> item 19 the continuation of closed session. >> less take public comment. for closed session anyone public comment is closed. >> thank you for joining usse >> may i have a motion not to disclosure what was shared in closed session. >> so moved. >> >> misdemeanor and seconded

by commissioner driscoll and without objection that that item passes. >> is there any madam clerk, any other business before this committee? e mroibz we're adjourned everything. >> before the meeting will