gallia >> -- have lifted the restrictions on teleconference. this meeting is held virtually with all members and staff participating today via teleconference. this will ensure the safety of the service board, staff, and members of the public. in our published notice of this meeting and on the webpage, we ask the public to participate remotely by writing to the board or by leaving a voice mail message. for all comments we have received before the meeting, we have received and appreciate these comments. there will be gaps and some dead air time as staff is transitioning technology between speakers, and that includes members of the public. please note that we are doing the best we can possibly can,

and we ask for your understanding and patience as we all work through this new way of working together. if we haven't done so already, i'm going to ask all members of the board to mute themselves to minimize background noise. board members will have to remember to unmute themselves to comment and when the roll call votes are held. there's staff in the background who will be managing the technological functions throughout the meeting so we can move to whoever is speaking throughout the meeting. again, we ask everyone for their patience as we make these adjustments. lastly, we want to thank everyone who has made these meetings possible, including darlene, jay huish, and staff members, as well. the board appreciates -- [no audio]

>> and we will begin the meeting. we will start with the roll call. [roll call]

>> we have a quorum. item number 3, communications. >> item number 3, communications. due to the covid-19 and to protect the public, the meeting room is closed. however members will be participating in the meeting remotely to the same extent as if they were remotely present. this meeting is being televised by sfgovtv. please note that there is a

20-to-30-second time lag between what you are hearing and the meeting. for those who want to make public comment or listen on the listen line, the number is 888-363-4734, and the access code is 2241350. please make sure you are in a quiet location, turnoff any t.v. or radios, and if you are listening to sfgovtv, you mute the sound.

at the appropriate -- [inaudible] >> you will be queued up in the order in which you press one-zero. there will be an automated voice that will tell you when it's time to speak. i will start your two minutes when you begin talking. i will say "30 seconds" when you have 30 seconds remaining. when your time is up, i will say, "thank you for calling." at that time, the operator will put you back on mute. i will repeat the instructions later in the proceedings as i am aware that some members of the public may join the meeting late and are not aware of these instructions. alternatively, you may send

public comment to sfers@sfgov.org. if you submit comments, they will be included in the next board meeting. president driscoll? >> next item, item 4, public comment. >> item number 4, general public comment. at this time, the public may address the entire board for up to two minutes on items within the subject. dial the toll free number listed across the screen. enter the access code, then press pound. press pound again to join the meeting as a participant. when you hear that you are connected to the meeting as a participant, stop and listen, wait for the public comment to be announced by item number for general public comment.

when the clerk calls "public comment," dial one, then zero, to the added to the speaker line. the system says your name when you are ready for the speaker line, then to withdraw, press one and zero. when the system says your line is unmuted, please make your comment after the tone. this is your opportunity to provide your public comment after the beep. this is not a question-and-answer period, this is your time to provide a statement. you will have the standard two minutes to provide your comments. once your two minutes have ended, you will be moved out of the speaker line and back listening as a participant in the meeting unless you disconnect. participants who wish to speak on other items on the agenda or for other comment periods may stay on the meeting line and listen for the clerk's next

prompt. >> president driscoll, we received one e-mail public comment that was requested to be added to the record. via e-mail, we provided a telephone line also. this public comment is from john stinson, a sfers retiree, and i will read what he wrote. hi, jay, my public comment for april 22, 2020, public comment retirement board meeting is, when is our retirement going to follow the lead of calpers and divest from hedge funds. [inaudible] >> under the rules of the general public comment, public

comment is limited to two minutes per speaker per item unless the chair specifies otherwise. since we are unaware to tell how many speakers may be on a specific item, if we are too many speakers, i may cut it to one minute or limit it to 30 minutes to a total item. that's the only rule. we've been very fortunate; so far, we have not had to limit time. if there's time transferring between speakers, that time will not count again the two minutes. okay. that takes us to item five. >> we have to call for public comment. >> okay. >> moderator, do we have any public commenters on the line? >> operator: madam clerk, there are no callers on the line. >> clerk: president driscoll? >> thank you. next item. >> clerk: item number 5 is a

discussion item. staff and consultant report on liquidity, analysis, and c.i.o. report. >> very good. thank you, president driscoll, and board members, to begin, it's wonderful to see you, and i can't wait to see you in person, and i hope that all of your loved ones are well. i just have a few documents to submit real quickly. one is we had a documeprivate

secondary transaction sale that the board approved last march did close. the board approved for up to $1 billion, and it did close for $966.3 million, and there's a few other closures that we could inform, as well, but we're super excited we got that. the health life science strategy, the board approved $100 million in december, and we got $50 million in that closing. the board approved two closings for mayfield, for their flagship and their select fund. we received an allocation of $18 million to their flagship fund and $11 million to their select fund. and lastly, an absolute return

strategy, which the board approved $75 million in march. we did receive $75 million, and we think the timing on that is going to be absolutely perfect. with that, i'm going to turn to the document titled c.i.o. special report on the covid human health crisis and the impact on sfers. to begin, we've had an economic apocalypse, and we're doing okay. to give some metrics as to what just transpired is we are expecting or forecast a 30 to 40% contraction in g.d.p. the previous worst all-time single quarter was - 10%. unemployment in a period of four weeks climbed from 3.5% to

more than 15%. it exceeded that only once, more than the great depression, and it took two years to get back to that level. we've held up well in the month of march. we lost 6.9%, while global public equity lost more than 30. if we turn to page 3, fiscal year to date, this big punch in the stomach that we've experienced is we're only down 3.43% at the end of march. that compares to global public equities, down more than 15, and 70-30s down more than 9%, 9.2. there's been a lot of market activity since march 31. our best estimate as of today is we are very close to break even. we've maybe lost about .5%, so

we're pleased with the overall results. we have had a couple of disappointments. if we turn to page 6, on absolute return. absolute return held up very well in the month of february, when stocks were down 7%. absolute return only lost 31 basis points. that was not the case in the month of march -- >> i'm sorry. can i interrupt? i'm looking at a four-page c.i.o. report. there is page 6? >> this is a 12-page document entitled c.i.o. special report. >> can you tell us which e-mail this was sent out in so we know which folder to open? >> clerk: commissioner stansbury, it was sent to you again today by e-mail.

>> i've downloaded a couple of e-mails that were sent today. can you tell me which -- what time it was sent? sorry to interrupt, as well. >> that's all right. >> clerk: yeah, it was sent out 12:29 today. >> okay. thank you. >> clerk: that's the link to obtain all the documents. >> okay. thank you. >> commissioners, should i go on or should i give you a moment to open up? >> you can keep going. i'll find it. i'm going back now. i'm sorry. >> okay. so again, in the month of february, absolute return was down 31% when global equity was down more than 7%. in the month of march, absolute return lost 10.5. we're disappointed with the

results, but there's a part of a return that's important for us to be aware of. half the loss, almost half the decline, is related to a decline in the value of mortgage securities, mortgage security bonds. it appears to us that investors are replicating their fear of what took place in the g.s.c. when mortgage securities lost a ton of value. in this instance, the fundamentals of the mortgage market are infinitely better than they were back in 2008. loan to values are very low, and credit quality is very high. it was the exact opposite in '08. some of these bonds are being priced in the 50s. it's as if the investor community for mortgage bonds is expecting a decembpression.

we don't think that is going to happen. it would make more than a 30% decline in housing values and more than a 15% sustained unemployment for us to lose money in these investments. we think, over time, these are money good. this is a marked decline, and it's not related to a decline in the fundamentals. the fundamentals in these investments are very strong. if we turn to page 8, regarding real assets, is that the natural resources part of our portfolio, we believe, lost about 30 to 35%. there has been a historic collapse in demand for oil. it's down more than 20%. the -- and that's related to the shutdown of global economic activity, including airlines, most -- and many businesses. the -- and in addition to that,

the contraction -- the severe contraction and demand was exacerbated by saudi arabia and russia increasing production, probably to gain market share. this is an utterly nonsustainable development. the cost of production for russia is $40 a barrel. prices have fallen from $70 a barrel to less than $20 a barrel in 1.5 months. the cost of production for saudi arabia is admittedly very low, however, saudi arabia needs the price of oil to sell at $60 a barrel to fund their national budgets, and the oil market is incredibly important to both the economies of both saudi arabia and russia. i do think that there's some structur structural fundamental head wins in the oil and -- winds in

the oil and gas industry, but we do think we're going to recover some of this over time. i did want to return real quickly to page 10, item 5, and we've just experienced an economic apoliccalypse, and we essentially almost at break-even year-to-date. investors have defined what happens in two ways: a v-shaped and a u-shaped discovery. a v-shaped recovery is going to signal a rapid recovery. i think a rapid recovery is going to require a vaccine or mass testing of 7 million people.

we will have mass testing and tracing available in a matter of months, but it could take nine months. an l-shape is no recovery. that's a depression event. there are some smart people. ray dalio, the founder at brid bridgewater, believes that a depression is likely. i'm of the opinion, my team is of the opinion that that is not likely. we believe in a u-shaped recovery, and that depends on a couple of outcomes. the sooner we develop a vaccine, the sooner we develop mass testing and tracing, the sooner the economy is going to open up. we are likely to have a second wave, and a key is going to be how quickly we are on top of that.

the health care system will be much better prepared the second time around to manage the caseload and how quickly we identify carriers and isolate them and minimize the economic disruption of a second wave. admittedly, whether the u is a short or a long trough, we think that people are adaptable, they're resilient. we will find new ways of doing business together, we will find new ways of enjoying our lives, and over the long-term, we will reach new highs, and we will find new ways to create prosperity. with that, i'll pause and turn it over to the board for questions. >> if there's no board questions, we'll move onto the next part of this liquidity

analysis. >> yeah, i have a question here. dennis stansbury here. >> yeah, go ahead. >> i'm sorry. i don't have the document here, and i didn't catch some of the numbers. you talked about absolute return. what is going on with that? >> yeah, it lost about 10.5 in march after being down 0.3 in february. so in two months, when the equity market was down 21, it lost just about 11. the key fundamental is about half of the loss is related to market-to-market pricing in the mortgage security market. there's been a huge decline. like, one manager whose mortgage security bonds were trading at 104 at the end of february, and i believe that

brian, you may have met with that manager recently, but at the end of march, they are trading around 5. in 2008, we had big ramp up, all with buyers with minimal or no down payments, negative amortization, poor credit quality, everything is the exact opposite of that. the fundamentals of the underwriting have been very strong. for us to lose a dollar, ultimately, all we care about in private -- well, of course, we care about mark-to-market pricing, but, credit investments, it's money good if, when the loan comes due,

you've got ten your income and you get your principle back. for us to lose money on these investments, unemployment would have to be north of 15% for a sustained period of time. i know it's over 15, and it's going into the 20s, but i believe it's going to be more in the 10 to 12, 13% range in about a year. and -- not or, and, housing values would have to fall by 30% or more. that is not going to happen. the housing market is far too important to household healwea. it's also too important to states and government. congress is not going to allow a fall of those values. >> okay. so half of those 10-plus percent loss is from one manager in particular?

>> well, no, it's related to mortgage securities, and we have an ample exposure. i believe we have, you know, north of 20%. david, if he's on the line, he can chime in, but we have sizeable exposure to the mortgage market. >> and that was as of march 31? >> yes. >> do we have good data across all of our funds as of march 31? >> david, can you hear me? >> we do -- yeah, bill. and brian, we do. and we have, in the aggregate, we have about 4 managers in particular where most of the exposure is coming from, and the aggregate there is close to 15% of the absolute return portfolio. and as bill mentioned, this was the primary driver of the performance in the month of march. we had about 50 -- almost 50%

of the loss in march was attributable to the value of the absolute return portfolio and was driven by allocations to four managers that comprised about 15%. >> okay. that's helpful. in terms of the rest of the portfolio, on private, when did we last get updates based on asset values? do we have good valuation numbers based on the end of march? >> i think we have good numbers. the last n.a.v. that is recorded on our books for private values is recorded at the end of september, and that was booked on our books at the end of march. if you recall correctly, if you'll recall back, for the

quarter ending december, that was a really strong quarter, and those returns will be reflected on our books in june. that's going to be a very positive experience. private equity for the quarter ending -- for the managers' values in december that will be recorded in june, that's about a 6.5% return. for real estate, it's about 3%. for private credits, it's the + 2%. natural resources was flat, maybe slightly negative. so in the aggregate, those values as of december 31 that will be posted on our books in june are going to boost our returns by north of 1.5%. now, that answered the

question. for march, we have good estimates, but they're not super firm. private equity, we believe, is down 10 to 15%, real estate is down about 5, private credit is down about 5 to 8, and it's the normal -- it's the natural real assets part of our portfolio that i was alluding to. that's down about 30 to 35%. that's been a complete wipeout just because of the -- you know, the evaporation of demand in addition to increased production. i believe that some of that will self-correct, but that -- those losses will be booked for the quarter ending september, and then, the recovery that's taking place now, that will

be -- that will end next month, and that will be posted in december. does that help? >> yeah. let me ask about the core for public equity -- sorry. slipping back and forth between the different reports here. if i go back to the post equity returns that shows that we're down 20.16% -- >> correct. >> -- if i look at the equity markets over a similar time frame, maybe there's some mismatched with timing of returns, i actually show that the equity markets are neutral over that time frame. >> no. for the quarter ending -- so are you on quarter end - 20.16?

>> i am. >> no. the global stock market was down 21, almost 22%. >> i am looking at s&p 500, just for example, and it started off january at about 2400 and change, and it finished off at about 2600 and change. >> commissioner, i'm going to go to a website right now and get the return. and honor, kurt -- actually, commissioner, i know where i can get that. if you'll hang on a minute. >> bill, the s&p was down 19.6.

>> and how about the equity? >> it was down 21.4. >> yeah, yeah. brian, those numbers are right. . >> okay. i'll take it on face value. i must be looking at something that's incorrect here. >> show -- later on, please show me what you're looking at, and i'll try to resolve it, but those numbers allen just cited are correct. >> okay. thank you. that's -- the only thing that i would ask is i -- this wasn't a part of the original board packet, and it got included because i asked for it. i know that everyone is trying to be mindful of time and other considerations, but at a bare minimum, i do think this is one of the more important items in front of us each month, and i

just ask that it continue to remain in the monthly board packet as a priority. >> of course. >> thank you. that's all. >> if there's no other board members asking for comments, we'll need to carry on with the liquidity analysis. >> very good, mr. president. everyone, i'm going to go to a document titled "board liquidity analysis." . l let's go to the liquidity analysis, and it's a word document. cash flow and liquidity is not one of the more attractive

would be an adjective we do, but it's one of the more important things that we do because it relates to the ability to have cash flow plan benefits. if we look at table a, we see that that's going to increase by 2025 to 914, so that's an annualized growth rate of more than 11%, and by 2030, we'll be paying out $1.3 billion, and we'll have almost 800 million more than currently. [inaudible] >> you look on the row or the last row for year 2030, our ten-year accumulative pension payout, it's going to be almost

$10 billion payout. if we go to table 1 on page 6, this one relates to cash flow and having money to pay plan benefits and how much is locked up, who's timing when we receive cash and when we receive cash is out of our control. and the attractive markets, the attractive part of private markets is we earn a good return, but we don't control when capital is recalled, and we don't control when capital is returned to us. we see here in the base case, we see that we're going to be around 50% here for several years. in the stress case, which is a repeat of the g.f.c., we see it reaches a high of 55%, and the

one thing that ana and i have learned is that we need -- the stress case may not be stressful enough. we thought that the g.f.c., it was the worst event in 100 years. it's possible that we could have something worse than the g.f.c. i'm going to return to that in a moment. if we could turn to table d. this is the net cash inflows and outflows in different scenarios by year. you see that in 2020, we expect that in best case, cash outflows, and you see that persists every year for several years. as far as three years out, it's either plus $521

million -- + $521 million or - $677 million. that's because these stress cases stress test the earlier years. they don't stress test the later years, when our stress test is even higher. that is something we plan to stress test for, as well. table e, then, is a accumulative of several years. for example, 2022 would read the accumulative net cash outflows or inflows for provide markets from 2020 to 2022, and you see that that ranges from - $61 million, which is essentially flat, to a a - $2.8 billion, and that's a big number, and that's currently a little over 11% of plan assets. and it's that kind of planning

and even worse that we need to plan for, that we have liquidity available to pay plan benefits. the table f, then, combines the cash flow for pension payments and private markets next capital calls and distributions. and you'll see that in 2020, in base case, it's - $676 million or about 2% of plan assets, but in stresses, it's $9.5 billion or 6% of plan assets. you see there's significant variability. and then, table g, which is the most important, which is the accumulative multiyear -- so beginning 2020 through whatever year is headlined on table g,

is the accumulative cash flows for pension payments plus capital calls. and so you'll see here -- let's take, for example, in column 22, or for year 2022, it ranges from a - $1.6 billion to a - $4.4 billion, so we have to have $4.4 billion, which is currently 18% of plan assets in case the best case scenario unfolds to be able to pay benefits. there's significant lockup of long-term capital and significant availability between when capital will be recalled and when capital will be returned to us. so that leads to page 8, and these are the considerations that we want to begin to have a conversation with the board. regarding provide markets, we

don't control when capital is called, we don't control when it's returned to us. we give away that control because we think that we're going to earn higher returns by investing in private markets than we would investing in public securities only, and also to reduce total plan risk. but the upshot of that is item number 2, is that does lead to a significant variability of cash flows and also long-term lo lockups. so i want to assure our board and our members that we do have plenty of liquidity to pay for plan benefits under every scenario that we've imagined. we do have some work to do, which leads to items 4 and 5.

we are a little bit percent overweight, and without the sale, we would have been about 8% overweight. so i believe that we're going to begin to tap the brakes a little bit and plan for the day when our pension benefits are going to be a little bit higher today and into perpetuity. we need to plan for all scenarios, regardless of how bad they may be and how many years they take, is we always have benefits to pay plan benefits. so we're going to reduce our pacing this year from $2.4 billion. i planned for $1.6. might ease that and allow it to go to 1.8, 1.9, but we're going to reduce or strategic allocation to private, from 45 to 40%, that we're going to

begin to enter a glide path. we don't need to do all of that in one or two or three years, but we need to enter a glide path to reduce the amount that when we make commitments, it's ten years until we have a return of capital at least in equity investments, provide credit is materially shorter than that. the other thing we're going to do is we're going to increase our modelling. what we've modelling for is a worst case g.f.c. ana and i have modelled others, and we're going to bring those to the board. there's two components to that. one is we're going to model something worse than the g.f.c., and the other is we are going to model a stress case in the outer years in the scenarios that you've seen, say 2025, '26, '27, and that will be important for us to review

because our pension benefits then are going to be larger, and as a result, is market dislocations at that time and not being able to control our cash flows and distributions being pushed out even further can have a material effect on our plan. and with that, i'm going to pause and just ask the board for any questions. i do envision that ana and i are going to come back with a revision in a couple of months and come back with an asset allocation in september. before i turn it over to the board, i want to ask ana to pour over more of the salient points in her document called liquidity scenarios. ana? >> thank you, bill. good afternoon, and i'd like to thank our partners from cambridge who worked tirelessly

with us on multiple scenarios. as bill mentioned, we present three scenarios. [inaudible] >> i'm going to share the presentation -- let me see. i think in the board material, it starts -- can you see it? >> yes. >> okay. on the board material, it starts on page 55 with a skyline of san francisco. so i will start with a review of the liquidity management framework that bill and i presented a year ago, and bill just mentioned that it starts

with the first pillar, where we need to go through rigorous forecasts of cash flow expectations for private investments. we allocate 45% of plan assets to private investments, and it's important that we understand the implications of the cash flow in base case and the number of stress scenarios. that's the first pillar. the pillar on the right forecasts a pension obligation. that was table number -- table a that bill mentioned. this is something that we work with actuaries in february 2020, and just this february, chyron presented the latest bases in stress cases. this presents input in how are we going to balance out our portfolio, what is the asset allocation, and i'll also touch

on the two new parts in the middle pillar of our stress testing and liquidity management, where we realize that we would like to have a credit facility, which we do not have so far, but we started working with our custodian, and we'll be presenting, bringing options to the board. and we also would like to plan for longer term. bill mentioned ten years, but here, we will present a three-year liquidity coverage ratio, l.c.r and mlcr. so i'll start here, and this is just the pension allocation. this is one portion of our net outflows, and you see right now, the net cash outflows are about 2% of the plan. they're expected, in five years, to increase

considerably, by 8% or 9%, so higher than the expected return, and even more in ten years. so the plan is maturing, and the liquidity requirements from pension obligations are rising faster, rising faster than the expected rate of return. that's the takeaway from this page. next, we're looking in the history in the past six years of what happened to the cash flows as well as asset allocation. so for the last six years, we increased allocations to private asset classes considerably. we also had considerable commitment, so you will see that the middle column that says five-year average

commitments, this is from 2014 to 2018, and just next year is our experience in 2019. these are actual numbers, and you can see that we were committing over $2.5 billion for six years to private investments. so over committing versus the planned pacing of 2.4. we also -- if you go to the actual cash flows, which is the last three rows, you will see that over this three -- six years, it was more than 500, closer to 600 million net cash outflows going into public investment.

in addition to the pension obligation that we just reviewed, so to the total of $3 billion in net cash outflows over the last three years. moving onto 2020, as bill mentioned, we are operating under very varied economic outcomes right now, and as a result, we'd like to measure the commitment page. and we worked with our partners at cambridge to look at multiple different scenarios and multiple pacings, but we do need to see what is it that we're looking at?

looks like -- one minute -- we'll share this. is my connection okay? here is the updated version. so you will see that the forecast is broad. in the base case scenario, we will expect about 367 million net outflows, but in stress case, it's four times the -- the value, or $1.45 billion. this is broad, and we -- this is a wide range. and bill just mentioned that the opportunistic modelling

leads us to assumptions. if i may, we have a lot of assumptions -- if you look through cambridge's report, even what is the base case, what is the gross assumption for those asset classes, and then, we need to make assumptions of the contribution rates and distribution rates. and we have to model many different scenarios. we don't know what assumption we are operating on, but we do have to plan for a wide range to make sure that we do understand how we will have to restructure in the portfolio under different stress scenarios. and how do we do this?

if you'll remember, we put every asset in our portfolio into one of the four tiers. you wanted something that we can liquidate in less than a month, and then, you wanted something that will really take a long while to liquidate. so this is the picture that we have for 8. -- we have in tier one, immediately available, $6.4 billion, and within a year, it's almost $13 billion. then, we go and stress test, and say, well, this is under current conditions, wh. what if there is a negative impact on all of the fund that's we hold, and we take stress tests, expected annual volatility and apply this

downward scenario for each asset class, correlation one? fully correlated, and that's the market stress one standard deviation on the next page, page 9. and you can see that in this scenario, we still have plenty of liquidity. we will have to touch on the potential equity and absolute returns, depending on our liquidity profile. but on tier 1, we have $5.6 billion, and within a year, we can have $11 billion. then, we control the scenario where we take the deviation, annual standardized deviation and take two deviations. fully correlated, shocked to assets that we hold and look at

liquidity scenarios. where are our assets? now our assets are fully down to two standard correlation. we still have $4.8 billion that we can raise in one month, and $9.5 billion that we can raise within a year. so we reviewed the needs of cash flow, and bill walked you through the accumulative case scenarios. this is reviewing the assets that we have. next, i'd like to introduce a longer term three-year funding ratio, how we think about the funding risk -- >> hello? can you hear me real quick? the screen is not moving with pages as you speak to a page. could you either scroll to the

page or tell darlene which page you're on? very good. now it's moving. thank you. >> okay. i'm on page 10, i believe -- page 11. page 11 of the liquidity operation, where we introduce a three-year funding rate -- scenario. so we introduce what we call liquidity coverage ratio, where we take the liquid financial assets, which we just covered on the previous pages. then, we take the distributions, again, with different assumptions that we worked with our partners from cambridge, and then, we look at the employer and employee contributions that we expect. these come from chyron. that's the denominator.

the numerator, that's the number that we have to pay. if the ratio is more than one, we have liquidity. if it's less than one, we don't have liquidity. so the results are on the next pag page,. page 12 talks about -- gives an example, and it's in the appendix, but i'd like to draw your attention to the bottom right table on page 12.

there is a lot going on, if you'll remember, we are stressing the assets that we have available. in the base case, what we have now, one standard deviation down, and two standard deviation down. then, we have -- so that's those on the rows -- these are the columns of the draw-down scenario for liquidity coverage consideration. and then, the rows are the stress test that we worked with cambridge in terms of expected contributions and distributions, and these are the base case and no growth scenarios g.f.c. stress test. and you see that under all stress case scenarios and under all assumptions for the asset,

we still have -- our coverage ratio for the next three years is less than one. we still have funding to cover the next three years of needs under all scenarios. the next calculation that we consider is what we call mortified consideration ratios, meaning, well, we might not want to reach some of the risky assets, such as public equities or absolute returns. do we have significant liquidity just in core incomes and significant liquid assets. i'm on page 13, and looking at the table on the bottom right. you can see in this case scenario, we have significant

liquidity just in core bonds. but in stress scenarios, especially under no growth and stress scenarios where the call ins or increasing and the capital calls are decreasing, we do not have significant treasuries and corresponds to cover all our liquidity means. what does it mean? it means that we do need to reach to risky assets and sell some public equities and absolute returns. so i will stop there. this is the new material and kind of longer term liquidity plannings that we were working with our partners in came page and also making sure that we, as we've experiences high

calls, capital calls over the past couple of months, we have a lot of liquidity. i know there is a lot to cover. please feel free to reach up to me and bill directly. happy to set up a separate review, and happy to take questions now. >> ana, the screen is still on page 12. could you turn it to page 13? >> my screen is on page 13. >> okay. okay. >> page 13 -- and apologies, but it said the board package is called liquidity management update presentation, page 13. >> yeah. board members, to sum up, what you see on page 13, you see a

number of scenarios. you see the liquidity ratio is well under one. what that means is depending on the scenario, we are going to have to sell public equity and absolute return rather than treasuries and core bonds to fund capital calls and paid plan benefits. and it's this kind of ratio here that's well under one. we want to raise that number closer to one or at or above one. a few of the other couple of key takeaways to this presentation is as you saw, we're becoming a more mature plan. as we become a more mature plan, it's important to know that -- and as pension plans rise significantly -- there's going to be 2.510 x than what

they are now, is pay attention to when those cash flows are due. the other key takeaways is we'll do some additional stress testing, in addition, testing for an environment more stressful than the g.f.c. and also stressing for years in the out years when our pension payments are going to be much larger. we're committed to being in the private markets. we've earned really good returns. the team has done great underwriting. the returns have been great, we have highly valuable g.p.-l.p. relationships. it's just a matter of scale, just a matter of size, and how much liquidity we want to give up, how much we want to not control our own fate as to when capital is called, given,

returned to us, as to how much cash call we're going to need to pay liquidity of benefits. i'm especially thankful to the board to take time at an especially disruptive time in our lives to hear this item. this is something that we've been living the last couple of months and something that we definitely need to have a long-term plan for, as well as a short-term plan of when we draw. if we have a major market dislocation, distributions get pushed out several years, and capital gets called because there's been a market dislocation. thank you very much for hearing this item. we'll be bringing back another volume of this item in a few months, and we're available to answer any questions. >> okay.

we'll start with board members asking questions of bill and ana. if there's no members of the board asking questions, i have a couple, and i'll try to make it brief. you said a few months for an update. can you be more specific? >> june or july. >> secondly, in terms of adding the stress, some of the data that is used on either the page 12 and 13 we have or the page that ana was referring to, the assumptions into model is what i'm questioning about. if --

[inaudible] >> i'm just wondering how reliable that is. >> the distributions would be the same for those -- for both l.c.r. and mlcr. what would differ is the distributions do differ for the scenarios between base, no growth, and stress. it's not -- ana, can you speak to that? >> yes. certainly, i'm happy to take that. commissioner driscoll will see that the distribution and contributions are different under three different scenarios, so we analyze three different scenarios: base case, no growth, and g.n.c. for all three private investment asset classes. that's on -- that's presented

in cambridge's reports for details and summarized in bill's liquidity updates on the table in the last tables. for l.c.r. and mlcr, we are taking accumulative three-year contributions and distributions that we worked with came page under these three scenarios, so they are different under three different scenarios. >> and ana, i believe we also stressed the distributions further. i mean, cambridge had their distribution schedule under the three scenarios based on history, but we further stressed those, did we not? >> yes, we did, especially private credits because private

credits credits g.f.c. scenario, we felt, was the least associative at that time. we worked closely with the different scenarios, but if you see on page 6, where we look at our assumptions, worst case scenario, we added another 200 million in net cash outflows to private credits just, again, because we didn't have a good base case for g.f.c. all other scenarios, we replayed g.f.c. scenarios. >> okay. i'll try to go back and pull the cambridge numbers to line it up with page 13. i forgot that's how it's assembled. >> right. and if you'd like to get to the details, we also provided the calculations in the appendix,

but happy to walk you through, president driscoll because cambridge has one year, and l.c.r., the liquidity coverage ratios are three-year calculations, so longer term planning. >> yeah. the drawdown scenarios on pages 12 and 13 are reflected. thank you. anymore board member questions? okay. we're going to call for public comment. >> commissioner driscoll, this is allen. >> go ahead. >> let me just comment, this is not a shocking surprise. we had a major drop in the market that did impact everyone with respect to liquidity, and looking backwards, we've been aggressive in our commitments to provide markets, so that counts for some of the overage

bill talked about. the other overage is over the last few years, as good as it's been, public equities have gone up. real assets have gone up 12%, and private equities have gone up 14%. we're at a point that we had more private assets that we liked, and i think bill and your team are wise to recognize that that pace needs to slow down a little bit in phase of liquidity needs and where we are in the cycle. we shouldn't take this as shock, shock, it's drawing down some of these asset classes where we don't control the cash flows, then we should address

it now when it's not a problem. >> yeah. this is not bad news. this is where we have changing character fix of our plan. we've been doing very well, so we've become overweight. liquidity wouldn't matter if we had no pension payments for a long period of time. what matters is the intersection between having growing pension payments and liquid investments where we don't control when capital is called and when it's distributed, so there's just an art here. >> have we been selling assets for sometime in order to pay pension benefits? >> well, we always do that. we have to. >> we have to. >> yeah, we have been doing it for a long time. in terms of this maturity issue

that you raised, then whether or not we've underestimated how much the effect on our liquidity because we wanted to put more money into private equity and real in order to get a greater rate of return, we were willing to trade off for that liquidity premium. that's an issue of maturity. >> yes. >> commissioner driscoll, i would like to say that last year, we presented a g.f.c. stress scenario, as well, and that is more stressful than what we presented today, as well. we will presenting those cases, but we did present g.f.c. and base case scenario exactly a year ago, and we did provide the ranges. now, we didn't think that would be the base case. we didn't plan for that, but now, we are operating under different conditions, and that also requires a change in

liquidity management. >> yes, it does. any other of our presenters need to comment before we turn it into public comment? >> can i ask a question? >> go ahead. >> for our team, in terms of our returns, we would expect that that would impact employer, potentially income costs in year two, not this coming year. it sounds like we would be rolling it? >> not directly. >> but it would be spread out essentially, so the impact would be felt in year two, i'm guessing, not in this coming year? >> not in this coming year, further out. >> further out? okay. >> no. we will recognize partially and start amortizing in one year.

the other covered contribution is payroll thrust. that will not be recognized until one year from now. again, that will affect the contribution rate. >> and in terms of our numbers that you've calculated here, you have sort of what our anticipated numbers are here and what we project over time. it's not as immediate here, but then, eventually, we're going to be marrying up all of the impending changes in terms of any changes to employment numbers as well as wage changes and so on, right? >> we will have to upeveryth g upeverything -- update everything in terms of market rate, head counts, etc. >> so i appreciate all of the work that you're doing in terms of liquidity numbers. i do worry when we put the g.f.c. numbers in our worst

case scenario, it's not the worst case scenario. we have much to be monitoring, which you will be doing. i'm wondering if we're moving to a worst case scenario that won't be a g.f.c. scenario. and i'm wondering what you're monitoring if we're getting out of that modelling to where it would not be a realistic place? >> well, this is going to be a discovery process. the g.f.c. is the worst event since the great depression. the current environment is especially unique because it's the first time where economic activity has had to shutdown, and there's been a choice made between lives and livelihoods. that's a severe choice, and

the -- my -- sorry. i'm getting an echo back here. this shows me the vulnerability of health, life. it showed me the vulnerability of economic prosperity for an individual, for an entire sector, for an entire city, for an entire society in a new way that i want to plan for, that if something, say, happened, where we combined the infectiousness of covid-19, it was a very infectious disease, it's not an especially fatal disease. i think it's going to come down well less than 1%, but what if there's an event in the future -- ebola's fatality rate

was 30 to 50%, but it only lived a few seconds in the air. what if there's an event -- i have to think about worst case scenarios. what if you have a scenario of the magnitude of covid-19 and the fatality of ebola, and we have a multiyear where there's a shutdown of economic activity? there's going to be an art of discovery here. we're going to come back to the board here with what we've modelled, and we're going to have some choices to make between how much capital are we willing to lock up for long periods of time in change for higher returns, which we've

been successful of achieving, but we don't have access to that cash in a long period of time. >> right, and i think this is the question because all of the modelling that we've seen shows adequate modelling when we're modelling against a g.f.c. scenario. that's very comforting, but i'm just wondering at what point do we have to be changing our scenarios for liquidity if we think we're going to be heading down a continued path. i appreciate that there's continued work that you'll be doing, but i think it would be helpful to hear from you at some point about some of the things that you're monitoring in the marketplace to show us that we may be heading in that direction, because i think that that is a timely conversation that we need to be having. so that is a comment. and then, the last question i do have is in terms of this current environment that we're in, it certainly is unprecedented, and i just wonder, we've talked about a lot of the private capital that

we had committed -- or the capital that we've committed to our private market, and the fact that we don't have a whole lot of control over when it's called. on the bright side, some of that or much of that has been underwritten already. i'm just wondering, does this kind of a scenario present an opportunity for us for renegotiation of fees or do we just think that the investments that we've already made will be able to maintain assets at a lower or achievable price. what does that mean in terms of what we've already committed to? >> yep. so on the first point, we're not going to be able to renegotiate fees. however, the good news is the underwriting for this tik -- this particular process has

been done. we can call the cash. so our debt capital is in place. the research has been done, and managers are able to call capital. the answer to your second is a resounding yes, this is a great time for managers to call capital if we have a recovery, which i think we're going to, it's just going to take some time. regarding your first comment about the -- the stress scenarios, we represented to you today the three in a we've presented earlier. ana and i fully recognize that the stress case may not be stressful enough. we're very much on top of that. we've done a lot of modelling so far. we want to fine-tune some things and come back to you, as i indicated to president driscoll, here in june or july. we do need to have a

contingency plan. i think the g.f.c. is a once-in-40-or-50-year flood. we need to prepare for a 100-year flood. >> thank you. i just want us to -- i want to understand, does -- does the money from sfreers right now present itself as an attractive opportunity for investors because sfers has a stable revenue source, perhaps, or somehow does sfers investing knack itself look more

attractive to the market entities? >> well, we're considered to a very good l.p. -- >> but even more so, i'm wondering? >> yeah, very much so. managers, early in this crisis, they a they were saying, we've got some deals. i think we had 3 x, almost 4 x the amount of calls for capital in march than base. so managers realized the dislocation and were beginning to call capital. so we're a reliable partner for them to turn to, you know, when they have investments to make. i did want to mention your liquidity concerns at the top

of your question. i would just amend that to say liquidity planning. >> yeah. i think under the current scenarios we looked at, we do not have a liquidity issue. we understand that, and a lot of things are changing. >> yes. yeah, yes. >> thank you. >> brian stansbury here. just one quick question for you guys. i'm trying to connect asset values to when we're getting reports on the actual returns. so if we just -- this is a little bit of a repeat earlier, but if we just go right down the list, obviously, public equity is real-time. is there any delays of public asset values in terms of reporting? >> no, not for monthly or quarterly reporting. it's maybe a week or two, but for your purposes here, those are always light numbers. >> an absolute return sounds

like it's pretty fast, since we have all of those from march 31. >> those are all 100% current. >> and then private equity we said lag by two quarters. >> yes. >> and then public equity? >> two quarter. >> private credit? >> two quarters. >> i'm just thinking about this as it applies to liquidity. how do you factor in these delays? >> into liquidity? >> i can take that, bill. >> sure, ana. go ahead. >> brian, this is an excellent question. if you go into the presentation on the assets liquidities, we classify all the liquid assets. that is private equity, private credit, and real assets, as tier 4, and we do not rely on

any of them in our liquidity calculations. >> is there a particular slide i should be looking at? >> yes. this would be starting at page number 7, where we classify the framework, and then, on pages 8 to 10 present how much assets and how much in each tier. and you'll see private, which is private equity, real assets, and private credit, all in tier 4. and if you look at tier 3, that's what we use for all of our liquidity calculations.

>> so take me a step deeper. in terms of tieing all this together, should i be looking at the slide 11 that talks about the definitions of l.c.r. and mlcr? >> correct. so there are a number of things, so correct. slides 8 through 10 presents what do we have in asset conditions under normal conditions, one standard deviation shocks and two standard deviation shocks. and then, if you go into liquidity coverage ratios, say, slide number 12, right, you will see the columns based one standard deviation and two standard deviation. the assets that are -- that we count in those calculations are only tier 1 to tier 3. we do not count any private investments as financial assets

available for us to cover pension obligations or capital calls. >> except for when -- okay. when -- >> except for distributions and contributions under different stress scenarios. >> i'm sorry to rehash some of this. >> no problem. >> i understand you're not looking at it in terms of distributions to us. are we looking at this in terms of -- there are capital calls in this, correct? >> correct. so if you look on page 12 and how we calculate liquidity coverage, it's the liquid financial assets, and what do we have vablg available in dif distributions and employee

contributions. and what do we need? this is the benefits and payment plan expenses and the capital calls under different scenarios. >> okay. all right. thank you very much. got it. and bill, just earlier, since we're talking about asset values, i'm sorry, i had the website punched up from january 1, 2019 to march 31, 2020. no matter how many times i did it, it looks like it didn't update it. sorry for the confusion on that. >> well, brian, that brings up a good point. that 15-month period, nothing happened. the return was about zero. >> yeah. okay. i'm done. thank you so much. >> any other board members before we go for public

comment? okay. producer, public comment? darlene? >> clerk: yes. members of the public who are currently in queue wishing to provide public comment, please dial one-zero. when it is your turn to speak, the system will prompt you automatically. those who are not in the queue, please follow the instructions you see on the screen. moderator, do we have any callers on the line? >> operator: madam clerk, there are no callers on the line. >> clerk: thank you. president driscoll? >> okay. before we conclude this item, obviously, a ton of work was done by cambridge and nabc, but also our own staff, bill, and

ana, and the whole investment team. thanks very much. we've been warned there will be more updates as the scenario presents and the data is updated regarding important decisions that we have to make. again, thank you for all your hard work -- [inaudible] >> thank you. thank you, commissioner. >> thank you. with that, next item. >> clerk: item number 6, action item, approval of sfdcp stable value investment manager. a reminder to board members to mute themselves to minimize background noise. you may begin your presentation. >> just as an update, i'm presenting today because diane chiuy justin -- the birth of her child is imminent, so she

had asked me to step in. for this item, we have greg underman and kyle keith who conducted the search for the stable value investment manager. as many of you are aware, the stable value fund and the deferred comp usually comprises roughly between 25 and 30% of assets. at the end of the calendar year last year, it was nearly $1 billion. galliard has been managing this fund for the last five years. their contract is due to expire in june of this year, at the end of june, and to the deferred comp committee tasked staff and colin for the

committee to interview. in february, they had narrowed down the result to three managers. galliard, investco, and mellon. they were invited to the deferred comp committee, and they presented three presentations, and after that, the committee voted to retain galliard as the stable value investment manager, coming to the full board for approve. like i said, i have greg and kyle if you have any questions or if you would like them to do a high-level presentation of the search that they conducted, they'll be happy to do that.

what's your pleasure, president driscoll? [inaudible] >> i'm happy to echo jay's comments. galliard really has been a strong partner to the board since they were hired in 2014: they've diversefied the fund. as jay mentioned, it was about $1 billion, but i would remind the board that there are four underlying external managers as well as internal galliard management, so it's very well diversefied and continues to do a very nice job in this scenario. we have seen very snies casnic,

particularly for the month of march. so i'll pause there and really see if there's any questions. happy to walk-through any of the materials as needed. . >> commissioner driscoll? >> i was going to recognize committee chair bridges. she might want to make a comment. >> i did. can you hear me okay? >> yes. >> yes, to commissioner driscoll and to the board, the deferred comp committee did listen to all participants that were brought in. we reviewed them in detail in terms of the due diligence that was done with our consultants, and i would say that given the information that we received, and based on the thorough research with my consultants, i, at this time, would like to recommend to the board that we retain galliard for the stable

value fund. >> okay. is there a second for that motion? >> supervisor safai. i'd like to second that. >> thank you. before we call the question, we'll ask for any public comment. >> clerk: members of the public who are currently in the queue who wishes to provide public comment on this item, please dial one-zero. when it is your turn to speak, the system will prompt you automatically. those who are not in the queue, please follow the instructions on the screen. moderator, do we have any callers on the line? >> operator: madam clerk, there are no callers on the line. >> clerk: thank you. president driscoll? >> thank you.

[inaudible] [roll call] >> clerk: 7-0, motion passes. >> next item. >> clerk: item number 7, discussion and possible action on coronavirus aid, relief, and

economic security act, c.a.r.e.s. act, impact on the sfdcp. >> commissioners, as you're aware, march 27, president signed a coronavirus aid, relief, and economic security act, commonly called c.a.r.e.s. act, a lot of it targeted to individuals and businesses. and part of this c.a.r.e.s. act were entitlements or some options that would be provided to participants in, for example, a deferred comp program. so what we have presented to you are the three options that are now available under c.a.r.e.s. one is not optional, and we have invited brian merrick to just give the board a brief

overview of the changes in required minimum distribution. this is not optional, this is law now. and then, after that presentation, we'll go into the two options that are available to the retirement board to direct staff to pursue an implement that would provide immediate aid, or at least access to deferred comp accounts for our participants. and with that, i believe that brian is still on the phone. >> yes, i am. can you hear me, sir? >> yes. >> okay. very good. thank you. for the record, brian merrick, and i'm going to share my screen, if you can see this. what you should see on your screen is washington watch. can the commissioners see this? >> not yet. >> okay. let me just try this again.

desktop. >> we see it now. >> okay. very good. i will not go through this. this is more for reference, but with the c.a.r.e.s. act that was enacted at the end of march, as mr. huish mentioned, part of the act pertained to retirement plans. and this provides some of the background related to that act. this is a presentation that we walked through our retirement plan clients, including the director of this plan, to give some updates on some of the relief plans of the government in response to the covid-19 crisis. what i'm going to focus on specifically is the waiver of requirement distributions for 2020, which i'm displaying here. as most of you know, you know, once a plan participant reaches

the age of 70.5 prior to 2020, they're required to start taking distributions from the 457 plan. earlier this year, that number was changed to the minimum age of 72. however, with this act, the i.r.s. is waving any minimum ages in 2020. so what this means is that we will not be forcing out distributions from participant acts in 2020. that said, for anybody who was has, on their own, requested ongoing, periodic distributions from their plan, we will continue to honor those. so for example, someone might be taking monthly withdrawals or annual withdrawals that may be to satisfy r&bs, maybe to

satisfy their retirement compensation. we will be honoring those, but we won't force distributions out on anyone. in addition to that, if someone has already taken an r.m.d., required minimum distribution in 2020, they will have the opportunity to roll that money back into the plan if they choose to do so. so we will identify all individuals who are -- you know, would normally be subject to a required minimum distribution in 2020, and we'll be sending them a letter, letting them know of this cares act provision, you know, the fact that they will not be required to take a distribution, and what their options are. so with that, i will stop and see if you have any questions, otherwise, turn it back over to mr. huish. >> more to add, jay?

>> yes -- well, not on the required minimum distribution. if we're clear on that, that's something that voya is prepared to do -- >> i have a question. >> okay. >> this is al. i appreciate the information and the update. the question i'm getting from a lot of -- some of the retirees is they're helping their children. there's issues with children have been laid off, there's dangers of houses -- the credit unions are using emergency loans similar to what they used in the fires from santa rosa, etc. so just so i know there's retirees watching today. so if a retiree has money in the account and has a deferred

camp, and that retiree, what you're saying, could take money out to -- to help their children, and he or she would then have to declare it over a three-year period. is that correct? >> commissioner casciato, we haven't gotten to that point yet. these are the required minimum distributions. we will be talking about the coronavirus withdrawals, which are not, you know, the u.e.s, but they're self-certified related to circumstances that you just described, having to help out children or grandchildren related to the coronavirus. but we just wanted to sort of covered the required change first, and now, we'll enter into a discussion on something that would help the retirees get access to their accounts in order to mitigate any -- any --

any hardships related to covid-19. >> but i -- just to clear, because i know some people are watching, this is -- issue is for 2020 only, correct? >> the required minimum distribution is for 2020. now what you're talking about is the coronavirus related distribution, and that, again, is a temporary type of distribution. it is only available between -- it's for calendar year 2020, there through december 31, 2020, and it would be to a qualified individual, which is a participant as well as anyone who, because of the virus, experienced any kind of adverse financial consequences. and so that is optional for the

retirement board to consider and approve, and certainly, we've talked to voya and the folks at voya would be prepared to have that available to plan participants in a couple of weeks. >> and also, does that have a redeposit clause, same as the minimum distribution? >> yes, that they are treated as rollover contributions back into the plan. in the retiree's case, because they are not in payroll, they would have to make over-the-counter distributions back into payroll, but yes, they can redeposit that money back into the plan. and certainly, staff is prepared, if the board wants to direct us to pursue either one. the other option is, again, for a temporary fix f, for 180

days -- >> where is the record keeper? >> they're on the line. >> this is supervisor safai. i have a question? >> yes? >> they wei'm looking at the n here. was it as simple as doubling the existing numbers here or was there consideration why we would be asking for or limiting it up to $100,000? >> we've not taken any action on this. >> no, i understand. i'm looking at the recommendation. i see that. i know we haven't taken any action. i'm just looking at what's recommended? >> yes. as we pointed out in the

presentation, it can be up to $100,000. if you wanted to go from $50,000 to $75,000, that would be acceptable. staff has not taken any action except on the measure of this emergency temporary increase for loans, up to 100% or $100,000, and that's in combination with any other loans that they might be taken, the 1 $100,000 limit, if they have a $50,000 loan outstanding, they would be able to access an additional $50,000. >> okay. thank you. >> it leaves us with the c.a.r.e.s. act for other plans. >> certainly. and i would just say

anecdotally, we've had some requested whether the board would be considering this and whether the board would consider offering these options as a temporary fix for financial distress related to covid-19. >> besides the r.m.d. and the c.r.d., is there anything else that we need to cover or is there going to be a one-action motion? >> well, i think there's two motions. one is extending the loans to $100,000 or 100%, that does not help retirees because they are required to take loans against the plans. so for retirees, fixing or

extending the loans up to $100,000 or 100%, and then, the second item, approving implementation of the coronavirus distribution, which, again, is not a u.e., it's not a typical u.e. it's a very specific pandemic relief, and it will go away, so i would ask if the board really wants to open up and be, as president driscoll said, be as -- [inaudible] >> -- it would be to make a motion what was presented in the coronavirus distribution.

>> the board several options. we can do one motion, or several. one and three, two and three. >> well, i would make an extended motion. jay, would you provide us with an extended motion that takes it up to the $100,000? >> that you would direct staff to implement the full provisions of the c.a.r.e.s. act, which includes temporary loan extension up to $100,000 or up to 100% of the account, as well as implementation of the coronavirus related distribution for qualified participants to take temporary repayable distributions from their sfgcp accounts. >> and that covers it all inclusively, correct?

>> yes. >> okay. so i'll make that form of a motion. >> okay. i'll second. >> just one -- yeah, just before we call for the vote, i don't know if there's -- the screen is acting weird, so i don't know if somebody's sharing a screen. i've got a double overlap, but any way, let's go on with the vote. >> anymore -- excuse me. before we go public, anymore board member questions? anymore comments from our subject matter experts? we' we'll now open it up to public comment. >> clerk: members of the public who are currently in the queue who wishes to provide public comment on this item, please dial one-zero. when you are prompted to speak, the system will prompt you automatically. those not in the queue, please follow the instructions on the

screen. moderator, do we have any callers on the line? >> operator: madam clerk, there are no callers on the line. >> clerk: thank you. president driscoll? >> please conduct a roll call vote on item 7. [roll call] >> clerk: 7-0, motion passes.

>> next item. >> clerk: item number 8, discussion item. update to retirement board on retirement services, deferred compensation, and investment divisions' activities since the shelter in place order on march 16, 2020. >> commissioners, i've asked each deputy director for the divisions to prepare an update on our reaction to and how we have maintained service levels since the shelter in place order on march 16. i will say also, in addition to -- i'm going to call on each of the division managers and diane to report, but i also want to let you know that we participate in the disaster service worker program with the city, and for folks who have

been furloughed, working away from the office or who cannot telecommute or do their job w remotely, we have made them available, serving as disaster service workers around the city, certainly frontline, and we expect that would continue. but i just wanted to let you know that we have actually finally received our shipment of laptops, which i don't know what day it is today, but seemed like last week or even earlier, we were able to deploy them out to staff to enable them to work from home. we'll start with karen, if karen's on the line. >> i am. i am. can you hear me? >> yes. >> good afternoon, commissioners. commissioner driscoll, in the interest of time, i see what

time it is, do you want me to go through my memorandum or would you like me to just take questions from the board? >> you do not need to go through the whole memo because the assumption is we have been updated, but answer the question is if we've been meeting all the updated demands and then field the questions. >> we have had a significant uptake in members requiring services or retirement counseling, and we have met all of that. we have -- all of our operations are now up-to-date and running. there is really no team that isn't staffed, particularly now that we have the laptops, and i'm happy to take questions. >> and i will sigh that on the -- march 16, the day after the shelter in play order, karen and her team had started

doing telephone counseling to all folks who had booked retirement counseling appointments, and now, we've doubled the size of that team. and so for team who had appointments because they were going to be retiring soon, we were able to host those. we've also posted an e-mail address on the website for folks, who, because of the situation, may want to change their retirement dates, between now and july 1. so i would ask you that if you know anyone that wants to retire between now and july 1, to get ahold of us, and we'll make sure they get retired in a timely manner. >> i'm happy to take any

questions. >> yeah, commissioner -- or brian stansbury here. i just have one question for you guys. going forward, is there going to be some sort of a review about trying to put together a lesson to learn through all of this and have a war plan up on the shelf so that we can refer to this the next time something like this might pop up? >> jay, do you want to take it? we actually have in place a plan, which we did implement, as soon as the shelter in place order was announced. what we hadn't had planned, or planned out, i should say, was operations all the way down to the level of, for example, who

was going to pick up the mail. now that we do have that, and we will incorporate all of the positives that we have developed into our disaster recovery plan so that, yes, absolutely, going forward, there won't be any delays. but i have to say, i'm pretty impressed with the teams. we really didn't have any significant delay in getting any of our business conducted. >> great. i'm happy -- go ahead, i'm sorry. >> no, i was going to say, we do have desktop exercises, and we certainly had not envisioned anything like covid-19, but we certainly had envisioned not having access to the building, losing our resources. we certainly will update it after this. we did have a plan to implement which got us a head start. >> i'm glad to hear that. i think this is -- you know,

this is something that we've talked about before, jay, and, you know, i know it's always just a matter of time and resources, but at some point, we should sit down and talk about the scenarios where we can't come into the office or the systems are hacked, there's a loss of data, things are deleted. and we should be thinking about these things so that we're ready for them when they do happen, but i'm glad that things have been going so smoothly. thanks for the report. >> and next, we'll have bill report on the investment team.

[inaudible] >> can you hear me? even though it doesn't even though we hadn't gotten together in more than a month, it feels like all of us are all together all the time. number of staff meetings is up 2-x. number of management meetings is up 2-x. we were set up to work remotely. we do that because we're on the road quite a bit, and we have nontraditional hours where we're conducting meetings after hours, on weekends and evenings. this was a seamless transition for us. we've had access to digital presentations, software of every kind, from excel to

powerpoint, e-mail. access to our custodian. it's really been a seamless operation. the only disruption is that we haven't been able to do travel to meet with external managers, but the number of manager meetings is still up 2-x. >> and i would say that we benefited from good timing. we actually deployed all of the laptops to the investment teams with docking stations to be able to work here as well as remotely three months before the covid emergency, so the timing of having those and getting them deployed was very gratuitous. >> greg put forth a great deal of effort in setting us up. >> thank you. any questions for bill?

>> okay. jay? >> yes? >> i just want to say that craig and his team and your team really helped from the board angle, too, because it really helped me get connected here. >> i wanted to do a special recognition, commissioner -- or president driscoll already has. but there's a team from sfgovtv, sean and mike and jason were very, very helpful. they told us to practice, practice, practice, and we appreciate all of your time for joining us and making sure that regard less of what this meetig might look like in the telecast, it was a successful meeting and we've been able to conduct business. it might look likely that we'll be doing this for the may 13 meeting, but certainly with

this experience under our belt, it will be easier for all of us, but i do want to do a special recognition that they've all been working very hard. >> i'd like to echo those comments. >> thank you. >> this is a discussion item only. one item i just want to acknowledge, thank you, mr. huish and miss bordnick, for making sure services were a high priority, so all these significant retirement decisions that have been made as well as what's going to happen in deferred comp, not just what we were talking about earlier. so this is when service steps up and it's a testament to all the members. >> thank you.

>> this is brian. a quick question. do you want to say anything about the whole g.f.c. and staff or do you want to save that for another time? >> we can. we have -- we're a little overdue for the closed session portion of the meeting. we did issue a call to action. i'm not sure of how many signatories we ended up getting. however, we did moving on, reach out, and -- [inaudible] >> -- an electric car manufacturer had agreed to shift their production to producing masks. we put them in touch with the governor's office, and they have been working with the state of washington under sort of similar circumstances, and had washington pension plan

being an investor. and as it turns out, we don't believe they've been included in the announcement from governor newsom related to the manufacture of masks, but we did appreciate it. it was through himalaya. they had identified this manufacturing concern. we also had, from one of our energy partners, paragon, a small donation of p.p.e., that we sent them to the city website, where they could donate p.p.e. so my apologies. those are the two instances of managers that we are doing business with in stance to the call to action that the board took. but i want to thank brian for raising this issue and,

certainly, the p.p.e. issue in california and those willing to help out. >> yeah. i just want to echo that. jay, commissioner driscoll, you got behind this early and made this happen. and through this, i don't think it's being -- i don't think we're giving staff and you enough credit. through himalaya, we introduced the state of california to a very large p.p.e. manufacturer, and the governor recently came out and said that they have required a lot of p.p.e.s, and the reason for that is because of the introduction through staff. and so thank you all to you for stepping forward and making this happen. my understanding is the state of california did not have this relationship, and the p.p.e. they were given access to was at significantly below market rates, so i just want to say thank you.

>> thank you. >> with that, we should recess and go to closed session. >> we need to make a couple of comments, item number 8. >> clerk: member of the public who are currently in queue who wishes to provide public comment on this item, please dial one-zero. when it is your turn to speak, the system will prompt you automatically. those of you who are not in the queue, please follow instructions on the screen. moderator, do we have any callers? >> operator: madam clerk, there are no callers on the line. >> clerk: thank you. commissioner driscoll? >> okay. there's no comment on this item. we need, then, to get ready to go to item 9, closed session.

>> i believe we need to hang up from this session and accept the invitations for the other meeting. >> yes. i'm hanging up on the line now. >> thank you.