speaking on the importance of rail and trying to do the other waterfront maritime you may not see everyone but shows the work is sponsor in san francisco has seen the results i've seen you come out thank you commissioner woo ho has to leave she want you, you to know you have the support do you have anything else to say yelp and no, i appreciate hurry time. >> colleagues if no more >> all in favor, say i. >> i. >> opposed? it passed unanimously madam clerk. >> new item item 13. >> colleagues is there anything anybody want to put

anything on the calendar that you want us to look into. >> all right. next item. >> adjournment. >> i'll accept the motion to >> so moved. >> >> all in favor, say i. >> i. >> opposed? we adjourned 525 happy new year >> good afternoon mr. clerk

are we ready to call i'll officially call the meeting to order wednesday, january 11, 2017, it is one 13 in the afternoon please rise and join me for the pledge of allegiance and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. >> thank you and welcome happy new year to you all mr. clerk, please call the roll commissioner cohen commissioner stansbury commissioner bridges that sxementd think outside the box commissioner makras commissioner paskin-jordan will not be here we have quorum. >> let's take public comment before you go into closed

session first of all, i wanted to say that you should say with the session you are going into executive session my name is steve with the united public for action i see a i could thinkcy that will not be beneficial to the city and county workers and residencies you kept secret our investments are this is unconscionable the city and completed have a right to know where their pension money is invested this is unacceptable and outrageous and i think also you have members of this board who are officers and female on much overtime commissioner stansbury commissioner driscoll who are

city employees and basically getting extra overtime on our pay and city taxpayers to do other things for example a rally to the san francisco plea ploy, sir keep tour that comments general you can't direct your comments. >> i'm saying what what is going on this is important for the employees and active retirees i need age explanation of the issue on the executive session they're having. >> before you go into it. >> so this is public comment an opportunity for you not a - >> i think i'm i'm saying what i have a right to know what the executive session is about far dwooch secrecy 25 percent of the pension fund to the hedge fund it is a disaster for the city

and county of san francisco i think this is why new york and got out of the hedge funds the threats of their i've lived and worked here my whole life 25 percent is outrageous the people that will benefit are hedge funds people that's example i urge you to take that seriously when i vote in the election the for the city any other members of the public that want to comment. >> 2 minutes. >> hello my name is kay walker i'm with the iuoe and the seiu i'm here because of the new election that have raised issues as the literature as new members

has to do with the fact that we would end up with 3 safety officers on the board that was the only opportunity that little members have to elect the officers or would be 3 safety officers and other communities not the case they have rules that allow separation and miscellaneous and safety guessing to all be recommended i know you'll say we represent you all but in truth that's not the case we see biases and different agenda and i know that people from our rcc sf when they have a commission the health commission board i was listening to this a lot and helped to promote it we

tried to get a safety over on that board that was all miscellaneous it was the opposite i know this comes from union people the same people that working hard to make sure we didn't get our cola it is threatening and also the fact that hedge funds were fought very hardly by the members thousands of petitions i i mean signatures came in against them do request we have to go through this again, if this gentleman wins i'll be prompting hedge funds as other people on the board that are you know elected do we have to go through this again members don't want hedge funds. >> okay. >> but not really. >> thank you anyone else that

would like to speak seeing none, public comment is closed. all right. that ladies and gentlemen, mr. clerk, call the next item. >> next item is what item 3 closed session. >> thank you so we're going to go into comment. >> let's go back into order good afternoon welcome back i just want to make an announcement we will be going back into closed session at the

end of this meeting and continue on with the agenda to be respectful to the people coming for public comment you're not watts mr. clerk, call the next item. >> general public comment. >> thank you. >> okay ladies and gentlemen, general public comment everyone will have two minutes to come and speak one card ms. silva happy new year. >> are you ready ms. lynch great. >> why is so, so many speakers and hasn't was selected as heads of the manager and the secrecy of the terms of the contract and why are the fee and fee structure for a 200 and $50 million investment of our pension fund a secret from the hedge funds manage invested in companies breaking up unions it

that a possibility why is this person drawing one hundred and 8 thousand in annual pension money to take away revelation from the miscellaneous members of this plan ask him is not clearly stating he's a retired san francisco police officer why public safety represents 46 percent of the sf and takes 32 go percent in pension payouts while the miscellaneous members make up 84 plus and draw 58 payouts any union that advocates that the miscellaneous should vote for e line casino a retired sfpd person is working against the members interest for a recommendation phenomenon the board please vote for the mother

conflicted candidate and remember. >> this is not allowed in this meeting. >> oh, sorry thank you very much. >> next speaker >> hello. >> welcome. >> i'm patrick as i address you today i'm not campaigning. >> i am going to allude to your responsibility as the board the election but not at this hearing he can say what i want. >> as long as you're not promoting one commitment over another. >> thank you, sir. >> why the total secrecy in the lack of transparency with the hedge funds investments reportedly managers those structures craft and customize

the management guidelines will not be made public to the planned members why not what happened to transparency by this board in 2015 when you approve the hedge fund allocation straightaway 2015 those minutes show several commissioners including matthew and commissioner paskin-jordan and commissioner meiberger and supervisor cowen and others expressing concern about transparency mr. r mr. coaker noted transparency quote would dependent upon on the managers hires and kraublg negotiated terms. >> 30 seconds commissioner meiberger with the

hedge fund managers will have investment guidelines included in the contract the trusted insider who are recently kabtd me and requested an anytime shared with met when al was a board member he went to a retreat they had meeting information packets were two on instructions. >> thank you. >> and scald to be shortened. >> are you guys supposed to do your fiduciaryy meeting by reading our packet. >> thank you another commenter public comment is closed. thank you mr. clerk, please call the next item. >> around action item approval of the minutes of the retirement

board. >> all right. you have something we've provided a copy of an e-mail from commissioner meiberger requesting edits to the minutes. >> commissioner meiberger thank you. i'll rptd request the minutes are reflective of the minutes on the board meeting this is what minutes are about there was discussions of the value of the assets misinformation about a law and i think that the public needs to know the facts of the swoigs i'll respectfully ask the minutes be amended to include number one the gentle consulted al repeated the funds for 2015-2016 and 2014 were one .9

percent plus and 18 percent respectfully and then martin said the funds did amazingly well and the 16 and third for the last 3 fiscal years compared to did pension funds with assets grandchildren one billion dollars and secondly, the advocates spoke 9 protocol was 4 point plus blinded and more - since the fund had a positive return is the benefit of the payments and thirdly, for the period ending 2016 the fund was 7 point plus per year placing s c r s the best performing fund in the history of the pension fund no pension funds in the universe earned returns

grandchildren the long-term assumes and fourthly quote for the year ending 2016 the fund experience net investments gain of 1.89 employed of assets of $65 million during the third quarter further assets increased from thirty plus $9 billion in the year ending 2016 with $640 million in net distribution if we can add that those are the facts and none of the discussion was reflected in the meeting of the minutes that's important. >> we will accept that reading a motion we'll take public comment at this time and then take a vote. >> hi, i'm back again commissioner cohen.

(laughter). >> i most in the meeting manipulates that when john spoke his comments were completely overly summarized that he noted that warren buffett hedge funds are up over 25 and van is 65 that's the attitude in the minutes too i want to commend commissioner makras for inquiring whether the retirement portfolio last year mr. corso what is martin confirmed to retirement system had a $1.8 billion commissioner makras question and all staff responses to him have completely missing

from those minutes which it seems to me to be substitution at its worst i recommend that you pass this motion to delay approving the minutes to the next meeting and instruct the gentleman to rise the meeting by including the minutes by mentions by commissioner makras and the discussion afterward of why that appears this board is directly and come accomplicely with holding information to support falsifying by the police captain in the campaign wildly calculated by the y m a and example p t local 25 to their

minutes who are lying for alto deceive or mislead our fund lost one $.5 billion and thank you. >> thank you. >> if this board fails to amend the minutes you'll be come. >> next speaker >> good afternoon and new year clara representing rc sf my notes are not as complete as commissioner meiberger i came also to talk about the fact there is a significant section missing out felt one part of minutes i remember the discussion we had here this is something that came up rc as

well we've been telling our members to check the minutes and the video to verify the fact there was no one $.5 million loss out of our funds and shocking to discover the minutes are not accurately regretting those items specifically to actually to clarify and the other items that commissioner meiberger brought up we're here to support the amending of the minutes to accurately reflect the distribution with the impact of the discussions. >> any other members of the public that wish to speak for item 5 for the approval of the minutes public comment is closed. colleagues just as a refresherer commissioner meiberger has read into the record and i will accept it as a form of a motion for suggesting changes to the

minutes is there any discussion. >> i wasn't present i have to this everybody that commissioner meiberger had to say sorry excuse me. question about the point of order i wasn't present i presume that everything commissioner meiberger read happened and said it sounds factually correct it is correct to vote for the change i didn't - is there a point of order. >> i believe i looked it is it reflects the record that mr. martin gave and we have no reason to basically say this is not part of what is included in the minutes. >> okay. you don't have to be a witness to what was said. >> i don't believe so a city attorney. >> each year i don't have any

additional questions. >> city attorney can go the commissioner abstain from the vote. >> it is up to him if he like. >> okay. >> any discussion on this end any discussion on this end and there was a lot of things said partial amendment of the minutes. >> ; is that correct that's correct. >> partial amend to the minutes let's go take a roll call vote this is a reinforcement on the motion to - >> seconded by commissioner makras. >> well on the motion as amended; right? >> 2016 retirement board as amended commissioner bridges sxhoeblg commissioner driscoll

commissioner makras commissioner meiberger commissioner stansbury that motion carries. >> that motion carries thank you very much mr. clerk. >> item 6 action item the consent calendar. >> excuse me - consent calendar. >> colleagues, any discussion on the consent calendar? all right. public comment on the cds ladies and gentlemen, public comment is closed. okay public comment is back open >> you want to - >> two minutes. >> so i'm going to ask to the kindness of the chair to allow me to compliment you during another agenda item. >> sure. >> one thing offered here i'd like to compliment you on your

new hairdo (laughter) when i watched the board malia cohen on monday i noticed your new hairdo it looks great. >> thank you. >> (laughter) i suspect has to do with with our having gotten maturated recently your husband is having a great influence on you (laughter) excuse me - but the harassment training policy all the employees went through would have recognized those mr. shaw to avoid making such comments. >> in my first amendment right. >> come on guys i don't know what about today you don't have to fifth over me (laughter) thank you. i appreciate it thank you. >> (laughter). okay consent calendar

huh? i need a motion give me a motion to accept the consent calendar >> all right. moved by the commissioner makras and seconded by commissioner meiberger and can we take this without objection. >> item 7. >> item 8 action item mr. coaker thank you, norman and commissioners again happy new year a couple of things quickly i'll turn to the narrative we had a good month of december of 1.5 percentage for the first 6 months up 4.75 and for the calendar year 7.4 for the calendar years they were bond and international equity for private equity we're earned 8 percent and real assets and for u.s. equity up approximately 11

percent moving on to item number 2 himalaya the board approved this for an amount up to $2 million we closed that before calendar year ended we funded it at one and $50 million and requested the manager to let us know when they want to make additional investments and we'll fund the remaining 50 we withheld because of the uncertainty about trade practices and china and, etc. so they have capital to call when they feel this is investment to make and m b k was approved by the board in november by $50 million we closed .42 and a half million dollars this goes back the board approved this for

the foundation back last march up to one and $25 million two months later we received $50 million we recently received the allocated remaining plus $5 million and now the allocation of one and $25 million we have a personnel update two one included is jeremy what was with us for only two months a big startup venture capital world all around us he is has a colleague from college or colleague we received quote the opportunity of. >> lifetime so he snapped that up such is the nature sometimes with the younger professionals eunice went on matters leaf at the end of the september and delighted to reporter are her be

husbands first baby girl was born and looks great on leave until july 1st and now we have another person so vicky owens will be leading the streaming for the next 6 months vic 19cy with us more than one year and a half and she's supported by josh the team as well as by n ap c and bob and ellen and myself we have a deep team which to handle when we have temporary people that for whatever reason are unable to serve we have the depth to put together a group of resources that continue on investment committee is scheduled for february 16th next month we have that up and ready

to go and flagship part that have is that and then martin will be leading us in the process for allocation which is item no. 7 will mirror exactly what has been done including 2014 and 2011 last month on item 8 as you recall our obviously commitments have jumped the lot from 9 percent of plan nearly 25 percent of plan assets this is a big number we're monitoring the liquidity position carefully and item 9 that is out i expressed to the board we have a net cash out flow of one point one $4 billion we are expecting in 2018-2019 we have more than $6 billion of liquid assets between equity and debt to draw

down our positions is good at the last photograph of item 9 the o po market was the a dearth of the market in 2016 expected to be a number had high profile r e o and have a value of $25 billion and in addition to that uber and airbnb they're less condominium to be in a r e o snap but their evaluations are expected to be higher quite a good i po market in 2017 the j curve we've been expanding and increasing our private equity and capital that will not be called for a while the

adjudication jackson the leaped up more than 25 percent for private equity and real assets we expect to earn. >> can you repeat. >> yes. commissioner our j curve is between all of our xhments commitments we have is right now about say $70 million or 35 base points quite a bit higher than years ago when the real assets were in the high single-digits we jumped quite a bit but expect i'm informing the board we are experiencing a temporary increase in expenses in challenge more the exception for hire long term returns from private equity and real assets

so informational point that our expenses are jumping up but we expect to earn several multiples in exchange for the long term and item 11 the development that i conveyed to the board more than a year ago and continues to be more pronunciations the price of public equity market is a lot smaller than thirty or 40 years ago even 20 years ago the number of public equity companies dwindled from more than 9 thousand to this 58 hundred a shrinking of the universe by 25 i 35 percent forcing organization like ourselves to look to decrease the allocations to public equity and there them in liquid assets item number 12 asking forerunners we have this program a started in october you'll see in the table provided it is off to a strong, strong

start we were up in the first two months by one .3 percent the hedge funds index is 04 and our hedge funds program is up both bond portfolio and stock portfolio in the first two medias the global equities money was down in the first two months and the bonds market got hit hard in november and down more than 3 percent in october and november we are planning to well, we did fund the remaining 200 and $50 million to black stone at the end of december and expect to make the investment in share class b the direct program beginning later this quarter we have an update on the custodial change we continue to have negotiations with bank of new

york staff and i held 3 3450ek today, we're holding several more over the next couple of days so we're accelerating our investments to push this over the finish line have a positive development with regards to our reiskin initiate we completed that you'll see several quotes from several of their clients it is a very highly regarded program wear very emphasized to begin to get this underway i expect ellen will be making a comprehensive risk delivery report to the board on at the may it meeting or the may board meeting and next month i'd like provide on overview on the events that took place in 2016 from a portfolio perspective with that, to i'm going to turn it over to the board. >> thank you for your presentation

colleagues, any questions or discussion anything you want to touch on. >> yes. captain. >> number two terms of the ma la what will that be. >> yeah. the other two - when is all fund a total of $600,200,000,000 each. >> okay stop i'll stop thank you. >> commissioner makras. >> i want to go through our number 8 outstanding commitments we take your total $20 billion assets roughly what is our allocation about is it six or

$8 billion into stock and how much into bonds maybe 10 of the $20 billion. >> into public equity and public fund yeah, so our allocation to stocks is $10 billion and our allocation to the income is a little bit over $5 billion. >> according to the asset allocation not that much; correct? >> no public equity will be $8 billion and bond $4.2 billion. >> okay. tell me where i'm wrong that's $12 billion i put that aside and i am looking at your number 8 that talks about capital commitment to the real estate that is an $8 billion bucket fair i got 12 on the other side. >> close.

>> okay close. >> a little bit over $7 billion but that would be in that asset value what i'm talking about here is capital candidates that are occupying we've made not been called. >> so this is a different number that actual vchlths made and i accept that but our asset allocation provides roughly $8 billion off market say $2 billion in bond. >> $8 billion and $4 billi$8,0 respectfully. >> the $8 billion. >> private equity 3 and a half billion dollars and 3.6 in real assets are 3.4 and hedge funds one billion dollars. >> we take that group. >> not saying hedge funds are

liquid. >> probably angle advantage if $8 billion in that second category your telling us today that is $5 billion that unfuventd. >> no, no. >> where will it come from if not either side because i have $12 billion committed that is 8 and 4. >> okay. you only 8 left. >> in addition to the $8 billion of actual investments that have been made to private equity and real estate and real 15e9s and hedge funds and crisis data total $8 billion is in addition to that we have another $5 billion of commitments that we have been made to the manages they've not called that capital. >> so the $5 billion in

addition to the 8 so - >> but i'm j any 8 and for the second 8 based asset allocations you're saying what then we're way out of line with our assets. >> no, no we're pretty much if we went to the first page of the cia report. >> and let's go down and look at private equity and real assets we actually have a total of $5.6 billion in assets there. >> okay that's money that has been called by the managers and currently in various assets now in addition to that $5.6 billion plus some other thing is in addition to that

that we have another $5 billion of capital commitments we've made that are housed here okay. >> okay. >> that brings us up to 5 and 5 is 10. >> ; correct? but how asset allocation allows that category to be 8. >> it does but that is based on the asset allocation is not based on it's based on actual vchltsd that are held by investment managers it didn't include capital commitments that we have made not been called by the managers those assets are housed here. >> i understand that okay. >> it is if i could be kind enough to go through this -

years ago let's take a date some date certain maybe you'll driving off calendar or in with memo any way you want when maybe take the last quarter what was fund. >> unfunded. >> go to this date your giving us to tell us what our asset allocation and where we are funded and not funded i see this j curve being much more serious to me than 35 base points or base thousand i'd like to deeper dive and get some comfort.

>> we can include a table that includes the t-3. >> if you're kind enough to show the chart we with talk about the volatility and benchmark those to see how we do. >> i'm not i'm sorry i'm not sure i understand that. >> i'll send you the chart the volatility and asset chart. >> that's included in the seat allocation that's coming through 2017 and then certainly include that the schedule for the allocation next month at the it meeting to discuss the process. >> my last question on our report walk me through your

definition this is a temporary increase in expense how is it temporary if we've funded it and start and finish what makes it temporary. >> so sure maybe a better way of what i can say the temporary increase in expenses without a commemorate increase in returns because in private equity you made commitments at the t zero the capital is called over three or four years and occurring expenses throughout the three or four years and then you begin to get distributions say in years 6, 7, 8 and 5 and get the distributions your expenses are declining you're getting cash back and you're getting an increase in return. >> so i understand are you saying we're concurring the

expenses and expense i see that as a draw down on the commitment is that the same thing a draw do you think i'm saying it first, as an expense. >> we occur expenses for management fees regardless of whether or not the capital was called or not. >> we pay the fee in addition to the draw down. >> that will be correct yeah, the manages. >> this is an expense. >> the members of the commission conducting did research on potential investments we are paying the management fee for them to conduct that research and then they call capital to make investments. >> one of the advantages of private equity i see that

managers call capital when they see a toxic investment opportunities we're not providing the capital whereas in public market and fixed income provide the capital and whether or not they think they're a great investment to make they receive the capital and nonetheless they close their funds. >> thank you very much. >> commissioner meiberger. >> i wanted to expand the liquidity of the fund if you have liquid assets you need to fund the asset the capital is drawn down sell a pubically traded bond. >> yes. commissioners there's a couple of reasons why i'm brought to your attention of the

board. >> let me ask the question. >> i'm concerned about the liquidity i believe that commissioner makras is as well i think if we saw the change in the liquidity of the fund that will be is tub active issue it concerns me the liquidity obviously a private k3ik9 portfolio and high performing asset class they've done very well the portfolio was one of the reasons we're so well funded in that very important but the increase towards the liquid nature of the portfolio like the benefits are increasing as well i beg to divvy building you said hedge funds are not liquid. >> they're not liquid in the same sense of private equity typically you're not getting our money for 10 or 12 years hedge funds you get our money back in

21st century quarters. >> telling me why combers is having a hard time. >> there are certainly hedge funds that are liquid two or three years to get out of them that's concerning to me the nature of the liquidity. >> maybe we can find out you're coming to the conclusion that we can pass that or get a separate report on that maybe ask if we were to close out our program tells you how that will close out and what is liquid and then not liquid and i appreciate the fact your monitoring the liquidity of the fund because obviously an important issue in terms of funding our commitment so it is an important issue

also other than that that look everything else look fine. >> commissioners can i add. >> please. >> our benefit payments right now are in the $900 million a year range $50,550,000,000 of employee and employer contributions that's about 2 and a half percentage of the planned assets that's a really good what i'll call you know net out flow rate you know if you think of that in terms of the individual retirements you typically then of drawing 4 or four and a half percent of money out of your retirement account and have a pretty good probability your

assets will not outlive you i'm confident the liquidity position is quite strong but need to monitor this in the past it was a such an amount just a ball park estimate eye ball test now percentage it on a more quantify. >> i support commissioner makras to the liquidity thank you very much. >> all right. anyone else all right. we're going to go to public comment at this time they have a few thoughts to share oh. >> commissioner cohen seeing you in the center of the table. >> two minutes it's yours. >> i'll be brief i'm very curious how mr. coaker can

comment and employment on her new child complimented captain spencer who should be congratulated on being a new parent i'm curioommissioner coh has was mr. coaker able to say things personally about staff without commissioner driscoll going a tad off kilter. >> what is good for the goose; right? >> good afternoon again commissioners and i actually was going to compliment commissioner stansbury on his new addition to the family and also to congratulate commissioner cohen on being reappointed to continue ton the board we're very happy

at occ sf. >> for the record not official. >> we're happy to still see you. >> i want to be at least we're hearing this report from seiu and from rc sf about xerz and their problems are divesting from their hedge fund program so that is a concern as question go into hedge fund that brings. >> at our end to request the side the list of hedge funds we're investing in this is unavailable to us we have concerns we know there are a number of hedge funds out there that are being invested in i don't know if it is us that work actively against the defined benefits plan we want to make sure that none of those fund

we're investing in are working against our fund to basically, what we all stand for and defined benefits planned system that is important and we're 90s that combersz - is there allocation rates were 7 and a half percent and their reducing theirs significant the last thing that reality i see we're talking about real estate investment but not hearing about real estate for buildings and the poeshlt of our own buildings for the retirement system will expand to include the other systems in student city offices we not to hear more about that in the future thank you very much >> thank you. >> any other public speeches. >> thank you public comment is closed.

>> all right. a motion on. >> discussion item. >> i'm sure i'm sorry. >> discussion item only. >> okay. >> thank you. >> can you call item 9 a discussion item the compensation management report. >> thank you good afternoon, commissioners happy new year before you is the monthly activity report as of year-end i'm happy to say that the assets have grown 5 and a half percent and at this point i'm going to turn it over to for any questions you may have and what rates of return do our members see. >> for the first quarter of

2017 the credit rate will be one .59. >> is remains flat from fourth quarter 2016. >> correct. >> for 2 one. >> i was - >> okay. >> captain do you want to nope okay. >> thank you let's go ahead and take public comment. >> thank you commissioner cohen surely commissioners on this board are well aware i published publish in the newspaper and have done so for 16 years and concerned over the past several months reading a series of articles in the observer reporting on performance of the

retirement system deferred plan commissioner cohen (laughter). >> i'm sorry you're right i wasn't listening one more time i saw you write for the observer. >> let me back up. >> give him another minute i wasn't license. >> why thank you. >> (laughter). for 15 years i wanted you to catch that >> i've been concerned over the past several months reading a recent series of articles in the observer reporting on the performance of our retirement system deferred you should read those articles yourself commissioner cohen that is high time the retirement board hire an auditor to audit the plans

performance during the past 5 years. >> the sooner you do that the better for people who are trying to set aside hard-earned deferred xomg money they'll need to dispute their city pensions thank you commissioner cohen. >> thank you thank you anyone else that wants to speak on this item okay public comment is closed at this time thank you. >> this is a discussion item thank you. >> thank you, madam chair. >> the next thing i'd like to discuss with the board the rvp as i mentioned last month we were in the middle of contracting with russel investments as our manager i'm happy to report we've successfully contracted them by year-end and now a new 5 year

contract with russel as a reminder to everyone reduced their fees to only that basis points that's very, very competitive pricing what they're doing for us on the fund. >> thank you, colleagues any discussions. >> okay commissioner makras. >> when you say that do you guys come before the commission or do that on your own. >> in may we brought this to the committee sorry board and brought this to the board as a finalist for our rfp the board accepted our motion bans the committee approval before the two boards since may we had noticed that russel had a bit of an organization change when this happened we informed the board that russel was under review we didn't feel comfortable

contracting and then over the last 5 months they've have not of all the evidence we have felt confident in their organization and again they're very competitive pricing for that reason no reason to halt contracting with them and were able to complete that by year-end effective january 1st, we'll be having other 5 year contract with them. >> yes. that the commission - and yes. >> if no other discussion we'll go to public comment. okay public comment is closed. >> thank you thank you for your presentation. >> mr. clerk next item and item 10 review the cola analysis as of july 2016 and good

afternoon, commissioners are there any questions on the supplemental cola item. >> i have none anyone else. >> questions on this end. >> i see a zero. >> that's self-explanatory. >> public comment on the approval for the supplemental cola analysis is there any public comment all right. public comment is closed. >> this is an action item that may i have a motion thank you. >> the so the motion has been made by excuse me. commissioner makras to adopt the supplemental cola analysis and direct the staff to notify the retirees no supplemental cola is payable june 2016. >> excuse me.

>> a motion i was reading the motion. >> you mean july 1st or june. >> i meant july motion was made by commissioner makras and seconded by commissioner meiberger. >> i'll second that. >> go ahead. >> thank you. >> all right. are we all in agreement or want a roll call vote. >> just to clarify the members get a 2 percent cost of living adjustment a - >> that's compounded. >> the two. >> the basic cola is compounded. >> and increased from the fund two conditions the fund earns more and now 7 and a half and the plan is fully funded. >> correct for some certain retirees. >> so those two conditions have not been met. >> the one condition the over

riding for all retirees and we didn't achieve the 7 and a half percent at the end of 2016. >> i wanted to say that. >> thank you for clarifying that and making that simple for the folks watching. >> this is an action item can we take that without objection, without objection that item passes. >> item 12. >> executive director's report. >> presentation for the 2017 board evaluation by the services. >> thank you. >> good afternoon happy new year. >> some of you may remember that last year the governance committee brought to the board an agreement in the self-evaluation calls for hiring on external vicinity evaluation group to come in and help the

board do their annual self-assessment of in may we brought those before the board a recommendation for the advisory services for the group that will conduct the board self-performance evaluation this year i'm pleased to introduce you to rick and randy miller i couldn't remember randy miller the two project leads and here to introduce themselves and explain the process and the commitment that they're asking of the board members and participating in this experience that that part of boards governs and as chair of the governance committee i don't know if commissioner stansbury has anything to add to this over a year i guess since we talked about this to the board we want

to get this going. >> thank you turn on any mike the one thing i want to share with the commission this is really a two-part process with an self-assessment and one part providing feedback to the board to one thing i encourage all board members to take the time to make themselves available they're looking for your feedback of practices we should have and then in the end bring that back to us as a board and share the other practices i'll let you to speak for to that i'll currently you to communicate with them. >> welcome. >> thank you very much and govern madam chair and thank you for the opportunity to work

with you we're looking forward to it we have first of all, i'd like to thank you for the work i do as volunteers on behalf of the beneficiaries sometimes a thankless job working in a different environment in terms of the 21st century pension world and i think again, the challenges that you face as an organization you're already high performing in terms of our investment performance and the railroad if in that's a good question this reflects an interest in how to improve our performance as a braid i'd like to in terms of the a few points i'd like to cover before we get into the performance of the organization the north side i'm sorry the purpose after extensive marketing research and expected marketing research in 2010 we decided to call funds

from the advisory from the advisory and left at a time and our primary focus on serving the retirement systems in the years of governs and fiduciary duty a list i'll not go through but an example of the kinds of projects we've been working on we have one other member not here she'll be joining us in the future the project i mentioned in terms of of the recent experience cover a wide range of issues and like the inspector generals and others by the systemsism as a result given us a broad exposure to the kind of issues the pension systems are facing and that brings us to a statement overdid next our philosophy we wanted to get through 9 it

assessment where you think you're doing well and where you can approve a model one size fits one every system we've countered have many things in common is unique and it, it's stage the development part of our commitment to you no spice up a regular communication established with the executive director and the governor committee and alleviates meets with the board. >> philosophy we want to fix problems not delay so no matter how high performing the crime son tied look for ways to improve that's once again to be creative and conducive an opportunity for improvement rather deathly a common term

what is the best practices. >> our approach is that we can tell you what we think that leading practice and give you represents but you decide what is best for yours. >> i think one of the things we're known for it practical implementation or implements we work forward to help you improve the way you function having said that, i'm going to turn it over to randy now to talk about the specific scope and purpose of scope. >> okay. just to review what we've been asked to do is produce an independent evaluation for the limits of the decision making practices of the board and compare those programs and policies to what we consider leading practice and bans that to identify and prioritize what would be the best opportunities

to you to be able to improve our performance and the third step to develop represents as appropriate potential multiple recommendations for you to decide which is the best for you to make improvements and implement them going forward. >> the seep scope of what we'll be looking at includes the roll and function of the board and its officers as well as the roll and functioning out of of your committees and the terms of reference what is defined as the scope and the charter committees as well as how well, they're working and effective we'll look at the authenticities this board your given authenticities in structure you operate in and evaluate that will as well as our relationships with staff with other parties that the board deals with we'll also look

at our self-assessment and the continuing education practices obviously what we're evolved in the part of the progress itself and finally look at the independent processes by that we mean you get information from various internal sources directly from the staff and so forth and what other source of surveillance you receive from other independent parties where our investment consultants user auditors and so forth and how effective are they in giving that kind of assurance the process that we will utilities really 3 parts to it first and we've already begun to develop a profile that compares our current govern structures and programs and policies to our benchmarking database from other

peer funds from around the country, and, secondly, we will ask you to participate in a self-assessment progress i believe you've been given a hardcopy of the actual questions we would like to ask you you'll be given a link to the self-assessment site and ask you to go through that and provide our responses to that and that will be an important input to us when after we have - we also ask you to put our comments in there not click on the buttons but to the extent you have comments you think will be helpful to us in our context we'll appreciate that that would be helpful and after we've had a chance to analyze your responses and summarize the results we'll prepare questions you'd like to interview each of you probably about an hour over the phone

over the next month or so we would expect to accomplish those 3 things and basically complete our data collections using those 3 vehicles. >> what we'll be then able to provide to you is a summary of benchmark profile how you compare to other systems give us feedback what you've told us how that will guide our identification of issues kind of a combination of what we see from comparing you to other systems and we will working through the govern committee we will come back to you for on initial discussion of what we believe that the priority issues the strengthens and where their potential opportunities for improvement we'll open that kind of discussion then to go back

and take our input and refine that into a final report and come back and discuss that with you with the recommendations for improvements and discussion about different alternatives you might consider the pros and cons and whether or not you might - what type of resources internal or external that you will need to accomplish in terms of the timeframe we began over the last few weeks work together the executive director and we would expect to conclude this no matter may this year, the time commitment from each the commissioners we would expect the survey to take maybe more than no more than a half an hour and like an hour of your time for interview and substantially be coming to you as a group and

vice chair discussions we'll call a workshop we believe what the issues are and looking for our feedback and a final presentation sometime during the second quarter. >> question is the survey an online survey. >> yes. >> okay. >> is that survey it is open now. >> it is. >> once you get the link you can go through it. >> you've been given a hardcopy pdf. >> you can look at the questions before you go online. >> and a reminder - >> we've not done (inaudible) by may of this year. >> okay. >> so what we're you have to

complete the survey after you get the link and work through jay and his office to schedule interviews with each of you at a time obviously that is convention for you over the next three or four weeks. >> okay. >> thank you. >> that concludes our presentation thank you very much colleagues, any questions. >> what will we be doing face to face. >> no telephone interviews to make that more convenient. >> are your offices nearby i find it for constructive if we go face to face do you mind face to face. >> certainly we'll range that. >> anyone else yes commissioner driscoll. >> so how long will a workshop

be and will that be public. >> when we say workshop we're having a discussion with you a workshop is a broader term with the public unless indicated. >> it would monthly be scheduled a board item in a public session they'll present their initial finds and have a discussion or in the alternative that will be only if we continue to meet the timeline it could be a one of retreat type of separate discussion if takes along a couple of hours. >> just to let you you know, i understand those words and understand and ask about audits i understand workshop is about training to learn and changing behavior. >> i think there will be pan

element in terms of the the way we write our report we describe first of all, what we'll expect to find an organization of this nature which we consider to be leading practices and identify what we found and then make recommendations to identify any improvements. >> so generally what we are trying to do it be constructive if for example, missing a policy x we'll expect to find such a policy and didn't find that therefore, we recommend you have a policy and maybe a - one of the issues to that topic is we find given your part time volunteers no less assume immediate fiduciary reporter as soon as you sit in that seat regardless of the background the finding of fiduciary duties and

co-fiduciary duties is an important element was we frame our recommendation to help you perform the responsibility that's part of written report we'll explain it. >> i'd like to know reading a report and understanding training is two different things question have you been read any of the assessment surveys we've done. >> no, not yet. >> not yet? >> we had that discussion that morning, i said i'll ebt to show them the most recent i think for 2015. >> i would suggest more than that. >> i'll show them the history of the self-assessment. >> we really i guess to put 2 into context we're provided information still and in terms

of the exact format and timing of the meeting that is flexible and open to working through the govern committee to figure out waits the best way to get it done we are flexible on that. >> so you're open if you're doing auditing there are several ways and under the understanding of the accounting part of terms so will i be able to see an example of an auditing report so i know whatnot what you're going to say but mostly words not numbers that's what i'm trying to understand behavior is different every single possible term of reference item. >> possible to understand how you're using the word audit market all those are reports associated with other websites. >> so i see where we are going that's why i ask the question. >> sure. >> anyone else yes

commissioner meiberger. >> thank you, madam chair i want to ask a couple of questions who are the other public pension funds what other public pension fundss have you consulted with. >> oregon and ohio and employee schools and new york city bureau of asset management and airline retirement system investment commission and so on. >> san jose. >> utah very good. >> the reason why i'm bringing that up the 37 county you mentioned xerz both are 1937 county we have a different govern structure than they do. >> maybe they got it right maybe for example, alternates for nowhere delegation if you

can put it in there and incorporate the 37 county of governance structure that is all about govern if you can address those how to improve the 37 county that will be very, very appreciate. >> the benchmarking profile we'll put in those types of comparisons to you know give you you an idea and bans the assessment what is working well, maybe opportunity. >> we're different than the 37 county we have two chaefrts. >> one size fits one we know your unique and we will again that's why not the portion will take what is specifically suited to our circumstances as opposed to one-size-fits-all. >> thank you very much and welcome, welcome to our state of

consultants. >> thanks. >> okay. all right. thanks for your presentation take public comment. >> public comment is open. >> oh. >> commissioner cohen he wasn't going to address this but since commissioner meiberger was astute enough to note county 1937 act is an issue of governance. >> i would hope this consultant will look into its structure of the boards of those 20, 1937 county acts organizations because the state association of county sack is the association

of the 20 county retirement systems that lay requires the management of the 20 community systems at least minor horin has 12 - req two miscellaneous seats and only one public safety seat another aside for retirees for 9 or appointed by the county of supervisors and the last one the county treasurer they stipulate only public safety member can

vote for the public safety seat and only miscellaneous member can vote for the miscellaneous seat and that for the retiree seat current employees are not allowed to vote in that election while your poking into governance as a planned member 16 and a half year former city employee now retired i would like you to come back with recommendation how this board can be structured governance wise to provide commissioner cohen's favorite word. >> i thought you were going to say that transparency it's next to diversity isn't it. >> thank you. >> i'll look forward to seeing our event full report and definitely be here to witness those hearings. >> (laughter). >> herbert wiener.

>> retired from the department of human services one thing that cross my mind does this have any relationship to the return on investments can the board investigate that that's a question that kroolsz my mind how does the structure relate to the return on investment and the performance of the funds as a whole is this your purview of your investigation thank you. >> mr. huh-uh can answer that is there anyone else that wants to speak in public comment nope public comment is closed. thanks gentlemen. >> okay all right. next item please. item 12 a discussion the executive director's report mr. jewish. >> the only thing i'll stress in the next day or two 4

committees we really need to schedule meeting for over the next couple of months including the personnel and the deferred cop and the finance committee i'll ask you be generous we went light on committee meetings over the holidays so ask you to try to make sure you can be more than normally accommodating and trying to get this weeping we're not set for wednesday but need to get the meetings hopefully by the end of february for those four committees thank you. >> thank you for the reminder this is. >> i did have a question regarding the forward calendar i noticed that commissioner stansbury be brought the issue of communications policy this was last week 4 to 6 months ago up firmly agree we have had should have a discussion of

policy and i remember the context members were having trouble getting through to to the phone lines nothing on the forward calendar for the communication can we have a date. >> included in the february meeting on the strategic plan improvement in the technology and setting the service standards. >> for february 8. >> could be - >> cola evaluation. >> not carried forward but the presentation of the strategic plan that will be tied to the budget presentation. >> i prefer a separate item. >> it will be separate i'm saying the board policy require we fund the initiative initiative through the budget

process and this will include things that potentially can need more staff or equipment along with the budget that schedule i'm sorry has been dropped off but scheduled for the february 8th board meeting. >> my issue is broader. >> we understand that. >> in terms of the responsiveness. >> you're aware we're working with commissioner stansbury. >> february 8th that's correct thank you. >> all right. commissioner makras. >> on our conferences and training program. >> uh-huh. >> this is very light options from what we receive for what the industry offices is there a particular reason that's streamlined and we switched governance consultants in cortex

they used to maintain a universal very broader list we can still assess that if you prefer that what they've prepared are things they believe are more pertinent to our plan but includes obviously fewer options we certainly have remainder with volunteering text to maintain we're waiting for a reaction to the draft has been cut back. >> one any conclude we have less interest in advancing ourselves with maybe 12 or 13 options there are 13 hundred options that used to be provided to us. >> be happy to provide the cortex list and the consolidated list starting with the february report no problem.

>> earlier, one last item somewhere in public comment i think i heard one person talk about public u publications that are associated with the retirement board it's my recognition that the board has given direction foreign us to receive those publications that you combine and distribute them to us because all of us go solar prescribe to all the publications and for a while we were seeing mrushgsdz that referred the retirement board. >> correct. >> is that still our policy or has that changed. >> absolutely if there is anything newsworthy that comes across norman tracks them and as soon as that we give them to the board. >> if anything this news worth is no the direction that allows for - the direction was

basically, had the retirement board or its members so marked with something that would be best for us to have it. >> equip the policy we can't participate in the distribution of campaign materials that's why we're not forwarding everything this is published i don't know that we changed the methodologies for searching for those types of articles. >> well. >> i think we're less than the news. >> maybe we should look at it it more like in the last 6 months. >> we don't those are campaign materials we'll norman not be san bruno. >> well. okay. and okay. >> a recent article.

>> okay. >> i think you've - >> all right. colleagues all right. thank you for your report mr. jewish take public comment on item 12 can't be up and down like a i don't i don't >> before i retired he worked for the city i was a damn good 1446 secretary too designed in microsoft database to force medi-cal into reimbursing laguna honda for missing payment i helped to design that database and designed the department of emergency management collateral material for the 9-1-1

dispatchers it reach out to police and fire and hereby volunteer any retired serves as a professional secretary to help identify from the gentleman who received much more in pay than i ever did. >> that's up to them but do a name search. >> it - the vast majority of articles in the west side observer are not about that election not about elections about the tension system performance and those fine people to do their fiduciary jobs should know what is said about them and their actions in these meetings i'm going to go home tomorrow and look at articles i think that maybe i should go backward

commissioner cohen and help you to identify since he permanently needs the 1446 secretary two system to help track this information down. >> i'll be right on that first one in the morning. >> (laughter). >> thank you anyone else in public comment next year. >> okay public comment is closed. >> thank you mr. jewish mr. clerk. >> okay. this is the order i want to just turn back to commissioner makras to see if there is anything you'd like to discuss perhaps - and i'd like my calendar item to >> vote on whether we will release our managers in the hedge funds the names of our managers and what else we want

to release with respect to the hedge fund my understanding that the managers by name are not being released and i believe that i voted to invest in hedge fund we had a late debate with respect to that asset class and i believe by staff representations that we would be open we would make it a transparent process not knowing the manages name is the opposite of transparency and all other areas we provide the name of the investment once we do make that and this is no different than all the other closed store investments and in addition including comberz allows us to

get managers names if he choose not to i 79 it to be a commission action they don't want to release it in a government code section we believe that is their purview i acknowledge they can make that but broadened it to the names of the investment managers. >> anyone else. >> just i would echo that position as well. >> i think earlier it was brought up of the hedge funds managers are lobbying in favor of the dismantling of the plans this is a strong labor town if we hire a manager that dozen away with the pension fund we need to know from staff have we hired any manages on the american federation of the list

lobbying against hedge funds lobbying against defined benefit plans that's changing the d d plans inform through the d.c. that are constitution plans and takes the reflex from the oz sponsors agencies to the members which is something we don't want to do the member didn't know how to invest their assets the nice thing about the defined benefit plan they they can't out life their plans we don't want them to worry about if they start a career in their 80s so that should be done and also item in terms of good of the order i think we should be respect of our members this is public comment. my understanding i've been to

the board of supervisors commissioner cohen and heard people sing songs but never a comment by a member of the governing body about disrespect towards the members like against patrick today, i think that is totally inappropriate member this is public comment we're supposed to listen to it is inappropriate for maintain of us to be judgeal those are our guests we should be respectful of them. >> yes. >> with all due respect you're saying ore members don't know how to address everyone is - some know what we want to do it provide them an opportunity to do this in a structured fashion

with experts helping us i rather view it as an option rather than a suggestion all of us are not qualified. >> thank you the nature was for d.c. plans they have to do that and not all of p them thank you not all the members know how to do that thank you. >> thank you. >> is there anything else. >> i'm looking forward to hearing from staff on the strategic plan and how we think about our members getting in touch with us and us making sure we are available to them whether to additional staff or technology whatever i'm looking forward to hearing more about that. >> second every month a consent calendar and in many instances

that are people who require approval by the retirement board to have their disability retirement and i'm quite frankly not educated on that process when it goes through the workers' compensation and it gets over here but some people have raised issues for me i don't know if so it accurate or taken out of context but in essence this from the time say the disability hearing there's a decision made and gets over here the allegation there seems like a long lapse of time that somehow it sets around several months bring it comes to us for approval maybe we can briefly touch on in a future meeting for our own education in many

instances people are sdrablths they may go a year without pay trying to get a decision so may be helpful for us to briefly about that process and certainly. >> all right. thank you. >> let's take public comment on item 13 go to the order. >> from for my final long-winded saying commissioner cohen there's a big elephant in this room as supervisor president cohen i'm talking president cohen sitting on the rules committee you talk a good game about increasing diversities about appointments on the advisory body but what we

need it garage diversity on this board. >> mention the election in past not election an issue what i'll talking about i've asked please captain twice to withdraw from this election and he has refused despite public health out to him i'm asking mr. nixon to pass out on this pie chart he can easily walk up and hand them to you but the members are 85 perspective employees we are 87 percent we're 85

percent of retirees police and fire take home 32 percent of pension pay out the miscellaneous members only take home 68 point one percent doesn't make sense the outcome of this election the vast majority of planned members i see are miscellaneous people will lose our diversity you know that word commissioner cohen we'll lose our diversities on this board the board will be controlled mop listed by public safety held all 3 elected seats. >> thank you your time is up. >> i'm going to be advocating for a charter to get this phase so we keep parity and diversity

on - >> any other public comment? public comment is closed. >> all right. item 14 >> board item 14 discussion of board member comments. >> we'll take our report as submitted any public comment on the report seeing none, public comment is closed. thank you >> excuse me - we're still meeting here we believe we need to go back into closed session. >> returning to everyone. >> i'll second that. >> without objection ppgz

thank you. >> madam clerk any other work before this body the meeting is adjourned thank