>> we shall start with the pledge of allegiance. i pledge allegiance to the flag of the united states of america and to the republic for which it stand, one nation under god, with liberty and justice for a all. >> item two, role call. (role call). >> the standard rules will be applied to include public comment restricted to three minutes. i'll recognize commissioner cas

irirkcasiado to make a statemen. >> thank you to darlene for a member's issues, one of our elderly members called in and said that he was having trouble finding his sister, checking on her well-being. staff routed that phone call to me and we were able to fe get te police department and fire department to respond. his elderly sister was found on the floor next to her bed with a broken hip. to make a long story short, had she laid there another 24 hours, she would not be with us but she in the hospital recovering. so i want to thank staff for their attention to duty and quick response and the family is

very, very, very pleased. but the take away that i want here is that when someone calls in and they're worried, let's act on it all of the time like we did here because time is of the essence and her brother, the one who call in here, he was actually concerned because he didn't want to break down her door because he was afraid she would be angry if he broke down the door and went in. i assured him we wouldn't do that and the fire department put a ladder to the second floor and got in through an open window. so the door wasn't broken. so i want to express those sentiments and on behalf of tom milburn and his family, thank you to everyone participated and darlene, thank you for your quick response. >> that takes us to item 3, closed session and do we need

public comment to go in? any public comment regarding us going into closed session? we will not start the open public session again before 2:30. (closed session. >> all those in favour, say aye. item 4, public comment. >> i'm john stenson. i'm a 44-year member of our engine phones. today i would like to comment on public comment. i would like to comment because i think you need some reforms that need to be made. the first reform that i would

like you to make is that i would like you to change your starting time from 10:0 1:30 to 2:00 p.m. i don't think you have started one meeting on time and the second one is to put an end to closed-door meetings. a few months ago a public commenter said he did not like you having secret meetings and i agree with him. the third reform that you need to make is if any of our members ask you any questions about how you are investing our money, you should answer those questions. and in the past meetings, i've asked you what were the retainers ended june of 2019 and how much money you paid in management fees and performance fees to get those? and i also ask mr. kocher to

give a written report on large pension forms like coffers, the state of new jersey? did he ever give you a report like that? i don't think so. another question i would like answered is, what is your managers definition of protection? my definition is not losing any money. please ask your hedge fund manager what his definition is. thank you. >> any further public comment? that takes us to item 5, approval of the minutes of the october 9th meeting. any corrections, deletions or additions? the motion to adopt the minutes is in order. all those in favour say aye. and item six, consent calendar. any members of the board that would like removed for separate

consideration? please remove item 6d, shall not be considered until there's a change in that operation, 6d, d as in delta. any questions? motion to adopt is in order. to be removed. >> to remove it from the consent calendar, that's the own way under policy they can travel. >> i understand. the travel request will be

canceled to begin with and therefore, no need to vote on it. >> oh, your travel request? >> yes. >> ok, got it. it's just one item. >> thank you for the clarification and does not take a motion to remov item to remova consent calendar. >> got it. >> any further questions, motion to adopt is in order. and seconded? you got it. all those in favour, say aye. >> and before we move to item 7, i will make a note to call item- >> public comment? >> excuse me, public comment, thank you. no public comment. if things keep going along swimmingly, i will not need to pull 10 and 11 off but that sequence will be taken out of

order. item 7. >> item 7, action item. recommendation to hire any pc as general investment's consultant. >> very good. board members any pc's five-year tenure is coming up in june of this year is staff requested and the board approved a recommendation that we issue an rfp for general consulting services. we received two bids and we are remming to again, reup, with any pc, and they are a deeply resourced firm with more than 600 billion in aum with public pension plans, including many our size and larger. and allen continues to express a desire to serve for the term of our recommendation. i'm going to ask kurt and anna

to further walk through a recommendation and we'll answer any question. >> i'll talk a little bit about the process and then our conclusions. as bill noted, you'll recall at the june 12th board meet, be they issued an rf. for investment service servicest was received from nep c. we formed an evaluation team comprised of bill, anna and myself and it included a thorough review of the submitted proposals, on site meetings and reference calls with both current and former clients. this work occurred over the past few months but was augmented by similar work confirmed by bill and me on the retiree healthcare trust which issued an rfp earlier in the year to which nakita and an nepc responded and

they had an opportunity to present on october 16th. it's a meeting, ibelieve, most of you were able to attend. it was divided into three primary duties, total funded policy and allocations. public market's oversight and performance measurement. and in addition, there were matters to esg and governance and why we only received two responses to our rfp, both makita and nepc were suitable. both are well resourced with experienced staff is both developed sophisticated methods for allocation and both aligned on a variety of matters but ended the day, we give a slight edge to any pc and our recommendation is that the board retain nepc as our general

investment consultant. >> board members? >> i make a motion to adopt the recommendation. >> second. >> and any board questions? >> i have one question. why are those two firms responding? >> a couple of things. well, one is there has been a lot of consolidation in the industry. the number of large consulting firms is probably no more than half or less than it was eight or ten years ago. there's a variety of reasons for that. and the big one is that most of them with cambridge being the exception, their business is primarily around corporate plans and public pension plans who don't pay very much. buas a result, that puts a premm on cost control.

and therefore, as a result of that, synergy is a scale and so there's been a lot of consolidation. there are probably some other reasons. we do know of a couple that we did talk with a couple of firms about why they chose not to reply. >> without naming the firms, can you maybe give you feedback that you heard? >> the two i recall that i spoke to that i thought would respond and considered responding asked questions during that phase where they can ask questions and they looked at our meeting schedule and didn't feel they could adequately commit to senior resources meet a monthly meeting schedule, two of them. >> is that because of the day of the month? because they already have other commitments? >> in one case, that was it. the senior consultants they wanted to assign, had

relationships. >> they meet at those times. >> the other is monthly versus quarterly. >> that's unusual. that's a big commitment. >> and what other feedback did you receive? >> another one was we own learneonlylearned about this afe fact. our returns have been pretty good and that we were probably, quote, unquote, satisfied with our existing services. and that was the second. there were some other things related to just some dynamics related to spurs that were also some reasons for pause and we could talk off-line. >> you don't have to mention the firms. we know this is not you and we won't kill the messenger, but

tell us what people perceive, yes. >> it's difficult. >> difficult board. >> difficult board. >> in what way? >> what you find online. >> this right here. [ laughter ] >> another one is being in the line of fire of esg. that's another one. so these are some things that people think about. >> there's one consulting firm i know of as a business to no longer work with public plans and they feel a lot of their research, both for asset allocation and management research is for priority work. >> quite number of years ago, not related to spurs, they made a decision to no longer do business with public pension

plans because they were sued for a large amount of money. and more recently, there's a public pension plan in the southeast and they sued everybody under the cover. and and i looked at that and thought nobody will do business folk. folks. i won't go too long but it's gad to knogood to know some of these things. going back to esg and board dynamics, other than the fact we're looking at esg and whatever those board dynamics might be, i don't know if it's the way we talk to people or individual personalities or politics, can you maybe just give us more color around those two items? >> it's perceived political interference. >> where politics trump investment decisions. >> yes. >> ok.

>> and that goes for both esg and the board dynamic? >> i would say yes. >> ok. that's helpful and good to know. thank you for sharing. >> board questions. i have a couple the first question is from experience working with nebc, anything positive if terms of the collaboration working with nepc because as the allocation recommendations, they do things in the manager selection area. >> there's always room for improvement and we speak with them, allen and dan, and allen and dan are very responsive and helpful when we bring those things up. overall, an nepc and allen have

been very good business partners. >> any reluctance on their part to collaborate? >> no. >> any reluc reluctance on stafo collaborate with nepc? >> as the way this nice report was written, it's a glowing report, very similar to the one written five years ago which, perhaps, you were the author. but let me ask this question about makia, since the name on the first page, nothing is discuss. did you find any strengths in makita that did not appear? >> i'll answer that and i'll ask kurt and anna to opine, as well. makita made a strong presentation and they were excellent. they established themselves they would be a very, very good

business partner. i did two on-sites with them, one in san diego and one in boston and in back-to-back weeks, they did a terrific job. the differences, in my opinion, are marginal, but there is a slight edge in terms of resources, plans about our side, and allen is a distinguished and experienced consultant. there are not going to be too many allen martins in the industry. so the differences were marginal and we couldn't find an important reason to make a change. nepc has proven to be a very, very good business partner. kurt? >> the candid answer was no,

there wasn't anything that makita demonstrated that was sitly better than nepc did or that we want to adopt. noted, this is very close and both quite capable. but no, there wasn't anything that makita did exceptionally well or for that matter, deficient in. >> they were very similar. one is a little bit larger in many dimensions. >> i would add to that, that even within nepc, we don't leverage everything. for us, it was a good exercise to learn more about capabilities that we are not leveraging fully. >> i'll make two observations. one, there's an issue of cost of change. if you don't think there's enough value going through the cost of change and there tore t, don't change. but in terms of the product that

makita discussed called cassie which utilizes a system or board of trustees, in terms of a better fix on an organization really wanted as opposed to the start way it's done, does it have value or is it just a bunch of hooey in. >> i think it has an excellent value and an excellent product that they put together and we did -- we scored them highly. and that's one way where nepc, i think we can leverage more. we worked with the jeanette and worked a number of times with them. so i think we can put it together but it doesn't have the presentation that makita put together. as an asset liability study

toolkit that differentiates makita. we think nepc has all of the components in it and maybe not the front side but has all of the components and we are also looking and leveraging other ways to look at liability studies. not just within our consultants. so we feel it's different but not enough to make this switch. >> well, i didn't ask it for the issue of switching. the question is, when the consultant has a product or service that someone else doesn't have, do we want it? president, driscoll, i would say that in this recommendation, we reserve the right to come back to the board at any time if we have identified a tool or an asset that our current consultant is not providing go

through another rp or rfi process to identify it. we have done that on the reporting side, on the private market side, hiring two separate consultants. even though we had two responses here, we believe that if there comes a need for a tool or something we know is out there that is beneficial, we would come back and basically either do an rfi or rfp to identify folks to produce this and i think we look at consultants differently than five years ago when we hired nepc and certainly, you know, the staff's recommendation speaks for itself. however, if, in fact, there's a tool that is identified that we believe nepc does not have, we would come back and also recommend that we would engage them on a project basis to deliver that tool. >> thank you. yes, there is the issue of

project work which is different from the issue of -- is there a difference to justify a cost as part two? and since kyron does work for us but you've supervised their other work and they are doing good work, similar to what nepc is doing but i will continue to talk to kyron because the whole subject of risk management which comes up again is again is again we have not so much mastered but it looks like questions we should be answering to give clearer direction to consultant and staff. as for this general recommendation, the way we are set up in our structure, it is awkward we're asking staff to do the due diligence on a consultant that the board will use in deciding whom staff will work with. it appears to be b a conflict we can't get around. we've discussed it and are they

a good firm or not? just putting that on the table now and more concerned about assessing how much risk this board is willing to accept when we set up the acid allocation mix which is scheduled for the next six, seven months. >> february. >> a bit of coin coincidence of events going on. >> i would add that we work with other firms to look at acid liability studies and other toolkits. it's not just consultants but we have access to one of the best acid liability studies through the couple of managers we engage in, especially on the global macro side that have this type of acid liabilities and we do intend to review that in addition to the acid liability

studies we will start with. >> i forget, was a motion to accept staff agency recommendation made? you had a question? >> excuse me. >> i, too, work with nepc and makita currently and here and with another group and i would agree with staff that the differences between the two are very -- i mean it's so small that it's not even worth it because they're so similar in what they offer in terms of the services. my question, and i coup hav dona problem with your recommendation retaining nepc is the concession planning. allen is marquis in the industry and leads the industry by far on any executive managers on the consulting side. i know at some point, he'll probably think about this didn't i'm not sure if they talked about possession planning with you at nepc. >> allen has indicated that he's going to continue to serve and

doesn't plan on retiring any time soon. it is a deep team. we know dan very, very well. and we don't know sam, as well. met sam several times and you're likely to see sam over time become more involved in the spurs. and the same kind of succession planning has occurred elsewhere throughout the industry. recently, makita acquired or merged together with pca. >> that's correct. >> pca was really had one key guy who owns the vast majority of the firm. and he's beyond retirement age. and there was really no obvious

off parent there. of option apparent there. it was the merger. it makes it more difficult to recruit and retain, especially through a whole career. now we're fortunate that allen -- allen is very experienced. he was experience experienced po becoming a consultant is dan has now served both at allen builder and through nepc and quite experienced and sam is experienced, as well. so it's a problem not just at nepc but throughout the industry. >> i agree. >> wilshire had the same thing. >> it's something we need to monitor, for sure. >> and so we do that in a couple

of ways. cambridge is a deeply resourced team. so we're not just totally dependent on one consultant. tory cove is relatively deeply resource team and you have a strong staff and you have a relatively deep staff. so we're able to execute on our strategy because we have multiple sets of eyes. >> a motion is made and any public comment? >> the future, you shouldn't hire any investment consultantseconconsultantsconsur without taking investments like

hedge funds. they are 11 proceeding 11% for 0 years. you don't have to go back. you have to consider three investments, nothing else, stock, funds and real estate. there's 12.88% and year-to-date

25.54%. you could give mr. kocher, $500,000 pay raise and i could give him the best investment advice there. it would get you more than 7.4% retained and you board members have billions of dollars of high risk to help get 7.4% retainer and that's completely ridiculous. you get that retained with a passive investment in stocks, bonds and real estate. item 7. all those in favour say aye and opposed? ok, before we move to item 8, let mr. nuclea mr. martin know e to come back in. >> adoption of amendments to the environment, social and governance procedures, esg and for the san francisco city and county employee's retirement

system. >> very good, board members. we were doing a sweeping eval of all of our policies and procedures throughout the plan and the first of these to come to you is, we do have some recommended amendments to our esg policy and you'll see the recommendation followed by -- no, it's not a red line but a black line and so that you can see the changes. there's a handful or so of these and i'll ask her to introduce the item and andrew can walk it through in detail. >> andrew describes it has social investment policies referring to esg procedures and there were certain policies written into the trust's overall statement. given we're now 18 months into the development of our esg efforts, we believe it's time for spurs to mend our procedures to reflect the three-pillar

platform and have a board adopt that. >> thank you, kurt. good afternoon, commissioners. and this is kurt and we're presenting a few updates to the esg policy. we tried to include, one, the black-line version showing the edits as well as a clean version what the new policy what look like and the existing policy, i poly, was last reviewed by the former esg committee in september of 2016 and it was last updated in march of this year in the appendix to update the investment restrictions and they were opted in 2018. the suggested updates that we're recommending today are meant to reflect as kurt said, the organization of our three pillar esg framework. so it includes a bit of a

reorganization of the levels one, two and three terminology that we previously used in our esg pol i. policy. it doesn't cut out any aspect of the activities or actions but reorganizes them within our current three-pillar approach to esg. and the future updates to the investment policy statement will remove the relatively lengthy section that discusses and repeats a lot of the esg policy information that's in this policy and will instead likely point to this policy as the basis for spur's comprehensive esg's policies and practises. i'll stop there and happy to answer questions on specific changes and i will note that nepc did reviewer the propose rs

before they were submitted. >> we've been discussing all of the parts of the portfolio? >> yes. >> everybody understands what you're trying to lead us to? >> yes. >> great. >> board questions? >> this is an action item and is there a second. >> seconded and no further questions, i'll call for public comment. i'll call the question, all those in favour of adopting? aye and opposed?

>> chief investment officer reports. >> to begin our returns we were up 1.2% and public equity was down in the fiscal year, down about 1.5% but it was up 2.5% for the month of october. nothing else particularly remarkable about the month, but public equity is now up 20% for the year and in terms of closings, emr 3, which is natural investment, the board approved 50 until april and we did close at 50 million. pag, which is an asia-based direct lending and senior debt

strategy, the board approved 100 million in september and if we closed at 100 million. the personal update, williamson who served over a year has relocated to atlanta. his wife was born in georgia and his wife also has, i think it's a brother and sister in atlanta. and an opportunity became open in atlanta and so, he has relocated. and we have begun to recruit or we will soon recruit for his replacement. we currently have an opening for a security analyst in venture capital and we think we are close to sealing a deal there. and we will soon begin, very soon, a search for security analyst for public equity.

after, as you know, recall the unfortunate passing of mark coleman and we will begin searching for our inaugural manager of investment operations. regarding beau's departure, a current member of our team and ed has been with the spurs for four years and ed will step in, into the private equity role. ed has terrific experience in education and he's now served spurs for four years and he has 12 years' total experience, including six years at haul capital. haul capital is one of the prevalent ocos in the country, managing $33 billion, a deep shop. they serve many of the prominent endowments and foundations around the country. they have, probably, a couple hundred clients or so.

and a very deep investment team and the team serves as generalists. so ed gained a terrific experience. the founder of haul capital, katie haul, was the long-time chair of the princeton investment board and printton is rivals with yale, as one of the very top investment offices in the country. so he's had terrific training and from somebody who herself is a real distinguished entrepreneur and investor. and ed is also a graduate in santa clara and nba from northwestern. in lieu of the changes, and to kind of give the board snapshot, there's a work picture of our current work chart, you do see that included in here and we really have -- it says 21 but we

have 20 positions right now and we have four that are open and three that i eluded to and a fourth. we do have an spm that we will recruit for sometime after the deal with the three existing or soon to be announced recruitments are completed. you'll see it's well-resourced team and we do a lot of activities. this is a more complicated investment structure than many public pension plans. and we do more across risk management, esg, and we include absolute return, natural resources, private credit and so, it looks like a well-resourced team and but, in fact, it's about two people deep in everything we do. senior person and a mid or lower-level person. and you did see earlier today -- well, i can't speak to that because it was done if private,

closed session. so anyway, that's the current status and you see the current vacancies that we also have. in addition to that, we do have a budget for several interns and we currently have one intern right now and she is exceptional. and we've had one or two others in the past and they've all worked out really, really well. and so, we periodically do fill those, as well. and those are priorities, i should say, as well, to be fully staffed. >> and of those, we regularly advertise on the tweegle foundation website. we have not had any interest in our ours and we're not sure if it is what we can pay them or whether it's just the nature of -- i mean, we're getting folks who are doing it during the summertime or working and so, we continue to advertise at

the tweegle foundation. >> maybe there's a conflict or maybe we're not attractive. i don't know what the problems are. >> our hr director, grace tem talked to the folks, saying they're jobs are seasonal and it was posted after everyone was place. >> after graduation and everything. >> so we're trying to make sure that we can synchronize with where people will be available and need the time, which i believe we've done. i mean, as bill indicated, i don't think we've ever had three working at the same time, but we have three vacant positions. we've been sourcing most of them through david francel's connection with a program at uc

berkley and we have come close to -- we actually offered one of our fellows an analyst's job and found out that we cannot compete with other job offers that an intern or fellow receives upon graduating. and again, we want to make sure that the board understands we're serious about this and we have budget money. we're spending it, but we probably, in the scope of things, need to recope some positions. and so that we can be able to snag some of the talent that we're actually helping to train. >> thank you. i really appreciate it. so thank you to you and mr. coverg and the rest of the staff for the position. i really appreciate it. >> as we conveyed earlier in year with our liabilities going

from 28 to 40 billion over the next eight years, and our aum, which was 17 billion, and even 11 billion in 2008, it was $11 billion in joh june of 2009d now we're at 27. with the rising liabilities, rising aum, the speed at which private market managers are coming back to market, they used to come back every four years and now it's two, two and a half, private credit or less than that. with the rising number of things that we do, which ha, which hasd or diversification, the numbers allen showed in the september board package is not only return at the top, but our volatility of the returns is in the lowest 15%. so our risk adjusted returns are

outstanding and we have really reduced the amount of volatility, but what you see is there will be need to be changes. the size of the team will have to grow or we'll have to change our approach. we'll have to be more simplistic about what we do. do or continue to do to require more resources. and then in addition to that is to have an investment operation's group and do more separate accounts. so this is a snapshot in time, but we do see our future of where we need to go and that for us to continue to do what we have done, for that to be sustainable, is we need to change as we yo. grow. the last item i'll point out is item number six and you see the calendar of acid class updates and we are formalizing this and

the first that you saw esg last month and you will see each of the classes coming throughout 2020. with that, i'll turn it over to the board for questions or comments. >> regarding your summary rather, the 429.$1 billion, how much is equitized? commissioner, can you tell me what page you're on. >> you don't have the page numbed but it's the table with all of the numbers, the weights, numbers, dollars. >> oh, the 429 in cash, how much is equitized? anna? >> 250. >> working off of your division chart of placements, not counting the fellowship

vacancies, the box underneath seniosenior portfolio, it says management assistant, is that an investment officer or what? >> that title is correct. so that's the classification jay may want to speak to. but that is karen's former title and karen is doing work that is akin in most every respect to a security analyst and she does have other duties. she's not been full-time in private credit. but the plan is that in the long-term, is that she will be fully dedicated to private credit, but that has not been her sole responsibility thus far. >> it's a personal matter we shouldn't be talking about, but i can say she is, bill has indicated, transitioned from the administration team and now pretty much predominantly has

been through time working with eunice on the investment team. and so this is an interim classification under the city's civil service commission. >> i didn't know anything about that person. it had to do with the functions that position is supposed to perform. >> certainly that person -- i mean, the security analyst position has very specific minimum requirements and specific duties. they were be operating at a different level of experience coming in. >> the amount of work, the quality work in the due diligence. >> the quality of the work has not withi been an issue. we're monitoring carefully.

this person served a probation period and absent a resource. , this is a resource we transitioned. i don't think anyone has concerns over the quality. >> it's not quality but the amount of workload in the acid allocation model is the one -- >> i can't get much further into this discussion in a public meeting, because it is a personnel issue. >> you mean personnel about the individual or just the issue of staffing and how we budget for position or build up for this $40 billion management plan? those are budget issues. >> i will tell you we do not intend to use this classification in going forward as part of the investment division, but under the current circumstances in order to get

resources, we determined this was an appropriate classification, as well as the mayor's office and department of human resources, determined it was a proper use of this classification to provide assistance to, in this case, eunice's team. >> i won't bring up the issue of resources. i often ask about our resources necessary and we have a duty to provide resources when we expect an investment officer to do something. that's why i'm trying to figure out what that label indicates. that's part one. >> part two is, some of the vacant positions are the fellowships, not that i'm trying to ignore any fellows but the next question in terms of koa co-investment, do we have a staff to make sure we look at the co-investments or are we passing them on because we do not have the people available to do the work? >> we mostly do not have the resources to do much in volume in co-investments. we just lack that right now.

and that is our plan, is to bring resource toss be abls to o that. but we do co-investments periodically. when opportunities arise, we can do the work in the time it requires and our existing calendar of underwriting manager opportunities allows us to do so. we do it opportunistically. >> if we do not have the people available, we have to pass. it's not a quality of the due diligence. thank you for the offer, we can't look at it. >> there's an opportunity cost and many we cannot do the complete work, even though on the first services it looks

interesting, perhaps even compelling, but we either lack the time or we lack the resources to be able to execute in the time required. >> there's the issue. resources not available to do the work. >> and that was part of the discussion the the investment committee, we need to go forward and request the resources in order for us to be able to except all the opportunities that we believe are prudent. >> the box for the alternative's equity senior portfolio manager, the phrase or label alternative's equity, that's a new one on me and can you explain to me why it's labeled that way. >> yeah. i believe that a misnomer and i believe it should be categorized differently.

when vickie did start, that was her initial role but she has worked in fixed income for the last two or three years and that title should be replace. >> your match it up? yes. >> thank you. that concludes my questions on your report. any further questions? >> one last questions, the investment staff -- . >> we have a budgeted staff of 24. >> that's what i thought. >> 20 on staff right now. >> the budget is 24, that's what i missed. thank you. >> public comment? >> when it comes to public equity, there's only one investment you need and that's the s&p 500. for the past 100 years, the sup ha.s&p 500s& s&p 500 has produced 10%.

let me give you just the last ten years. it did better than that. ten-year average and performance with the s&p 500 was 13.08%. and this is a a year-to-date return which is 23.4%. eaceven the best investor in the world, he wil said we'll have a difficult time outstanding performing the s&p 500. when he dies, the money he leaves his wife, he wants her to put 90% in the s&p 500 and the other 10% into cash equivalent. you can have all of the experts you want and over the next ten years, you won't outperform the s&p 500. thank you.

>> you said there's additional work that needs to happen and if we fill the four positions, is that enough staffing or is there enough to hire additional staff on top of the four? >> it's the latter. >> do you have an proximate of how many additional staff?

>> we will not go forward with a supplemental and what we're preparing for is to present in the coming year the resources that we will request through the mayor's office and through the board of supervisors in order for us to match our roadmap. >> you're putting that together now. >> exactly, building the butch now. >> building the budget now and you'll know how hasn't additional positions? >> exactly, and by classification. >> just because i haven't been through that process with you all for additional staffing positions, do you come back to this body and then take it to the board? >> it dose through the operation oversight committee and the budget is approved by the full board. >> this board. >> in full board before it is even loaded into the mayor's budget system. >> before you start making the rounds. >> it could be february at the latest.

>> ok. great, thank you. >> thank you. >> the budget process is an immediate term, part of what mr. kocher is talking about is the 10, 20, 30-year plan, much like the projections and he touched on what i would call the governance items which the board must decide, not the chief investment officer. the budget reflects what the board is going to try to do. this was a discussion item only and we shall move on to the next item. >> number 10, discussion item, sfbc, committee report. >> mr. chair, the committee meeting was september 17th, is

outlined, they were stated by the committee and i will have the director go through this and see what her report is. this is discussion-item only. >> do you want to call item 11 then. >> item 11, discussion item, sfdcp -- >> public comment, please. >> no comment, move on to number 11. i asked for public comment and i didn't see anyone stand up so i said we'll move on to number 11. >> discussion item, sfdc, quarterly management report. >> thank you. good afternoon, commissioners. before you is the sfdc quarterly manager memo designed to provide you with the consolidated high level overview of the plan and

the purpose of this home is to underscore the importance of the sfdcp as in $4 billion with a billion, of voluntary dollars contributed by the employees of qcsf to feel confident of retiring with dignity. there are four main pillars, investments, marketing, operations and the recordkeeper. they're each attributable to the overall planned success. so we'll start with investments and the stable value of the crediting rate is 2.60% and this is guaranteed until the end of this year and that's december 31st. and stable value makes up 25% of the plan's assets and that's just south of one billion and focusing on capital preservation meaning investors should expect to maintain 100% of their initial investment. to provide the guaranteed credit rate, it's wrapped with multiple investment contracts issued by large insurance providers.

the value is a complex product and only available through large dc plans like the sfdcp. gallagher certainly as the investment manager and the contract is set to expire in june of next year. as such callen is leading the manager's search expecting to bring a recommendation to the february dc meeting. cowen is leading the global and domestic research is we just concluded the manager interviews yesterday. they expect to bring a decision in december. >> can i ask a question about stable value. you said it's only available through dc plans? >> that's correct. >> and if we were to look out in the market in franklin templeton or whatever, we won't see a stable value fund out there for the average consumer? >> no, not for retail, no. >> what about institutional?