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tv   Retirement Board  SFGTV  January 15, 2022 4:00pm-6:01pm PST

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>> you may now begin the retirement board meeting of january 12, 2022 at this time. >> roll call, please. (roll call).
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>> would you read the admonition. thank you. >> due to covid-19 health emergency and given the public health recommendations issued by the san francisco department of health they have lifted restrictions on teleconference. this meeting is held virtually with members and staff participating via teleconference. this will ensure the safety of the board, staff and members of the public. while the technology allows holding via teleconference it may not be as seamless as we would like. mute yourself and not provide comment to minimize background noise. >> thank you very much. do we have any communications?
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item 2? >> item 2. due to health emergency to protect board members and employees the san francisco employee retirement system is closed. members will participate remotely. this is pursuant to the various local, state, federal orders and directives. board members will attend through video conference and participate to the same extent as if they were physically present be. public comment will be available on each item on the agenda. each speaker will be allowed two minutes to speak. comments or opportunities to speak during the public comment period are available by calling 415-655-0001. access code 24957830519 and pound, pound. you will hear the discussions but you will be muted in listening mode only.
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when your item of interest comes up press star 3 to be added to the speaker line. call from quiet location and turn down your tv offer radio. >> public comment? >> callers if you have not done so press star 3 to be added the queue. for those already on hold please continue to wait until the system indicates you are unmuted. do we have caller on the line? >> madam secretary no callers on the line. >> no calls public comment is closed. >> thank you very much. next item, please. >> item 3. action item. review approval of the january 2022 board resolution. meeting remotely for at least 30-days pursuant to code section
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54953e. >> members what we are done over the past few months. staff recommending we adopt this that will allow us in consideration of the health emergency declaration to meet remotely for 30 days from today. it will authorize this meeting as a remote meeting. i will be happy to answer any questions. >> thank you very much. i will entertain a motion to adopt staff recommendation at this time. >> so moved. >> second. >> commissioner bridges, thank you. any discussion? there isn't any. ask for public comment before the vote. >> callers if you have not done so press star 3 to be added the
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queue. do we have callers on the line? >> madam secretary there are no callers on the line. >> thank you. public comment is closed. >> thank you very much. roll call, please. (roll call) we will we have five ayes. the motion passes. >> can you call the next item, please. >> item 4. closed session.
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public employee hiring. >> at this time we will take public comment before we go into closed session. >> callers press star 3 to be added the queue. any callers on the line? >> there are no callers on the line. >> thank you. public comment is now closed. >> thank you very much. we will all adjourn to closed session. >> roll call for the january 12, 2022 retirement meeting. >> present. >> mr. driscoll? >> as long as we have four,
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that's good. >> yes. and commissioner gandhi? >> present. >> thank you. >> commissioner safai? >> present. >> mr. stancebury? absent. thank you. we do have a quorum. >> thank you. at this time i will entertain a motion to not disclose coming out of the session 4a. >> so moved. >> moved by commissioner. >> is there a second? >> i second. public comment please. or any discussion first? seeing none, public comment. >> thank you. caller, if you have not already done so, press star 3 to be added to the queue.
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do we have any callers on the line? >> there are no callers on the line. >> roll call vote please. >> public comment is now closed. [roll call vote on 4a] >> commissioner driscoll just arriveed. >> roll call vote on whether or not to disclose.
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>> do not disclose 4a. >> president? >> okay. at this time call the next item moving to closed session 4b. >> closed session 4b, investments. >> public comment on that? >> callers, if you have not done so, press star 3 to be added to the queue. moderator, are there any callers on the line? >> madam secretary, we have one caller oen the line. >> thank you. caller, please state your name. your two minutes begin when you speak. off>> caller: i am john furland and i am a little confused. i don't know if this is general public comment, which is item 5. the same comment i made last month which i think it would be
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helpful if you could give some sense of the private equity and real assets. i am beginning to get a feeling that you might be in completely uncharted territory at this point. thank you. end of comment. >> thank you for your call. moderator, do you have any further calls? >> there are no more callers on the line. >> thank you. hearing no further calls, public comment is now closed. mr. president? >> thank you. at this time we will have the board and all appropriate parties move over to 4b. thank you. >> the meeting for january 12,
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2022 is resuming. this meeting is being recorded. roll call, commissioner bridges. mr. bridges? >> present. >> mr. driscoll. ms. gandhi. >> present. >> commissioner safai. >> mr. president -- >> we have three. >> let's wait and somebody else will come on. >> clerk: okay.
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>> hi, commissioner bridges has joined us. >> commissioner bridges, are you there? >> maybe not. >> she's been shown she is not speaking. >> she is on mute.
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there is commissioner driscoll. >> commissioner driscoll, we are doing roll call. >> present. >> thank you. president casciato, we now have a quorum. >> okay. thank you very much. at this time i would entertain a motion to not disclose the -- we don't disclose our close session a and close session b. >> second. >> okay. it's been moved and seconded. commissioner heldfond, seconded by commissioner driscoll. public comment please.
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>> thank you. members of the public who wish to provide public comment on this item should call 415-655-0001, access code 24957830519 and pound and pound again. if you have not already done so, press star 3 to line up to speak. moderator, do we have any callers on the line? >> madam secretary, there are no callers on the line. >> thank you. hearing no calls, public comment is now closed. >> okay. thank you very much. roll call vote please. >> [roll call vote on closed session]
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thank you. we have four aye's. motion passes. >> next item please. >> item 5, general public comment. >> commissioners, we received one email request to be included in public comment, and i will read it at this point. we have a recession every seven to nine years. we are now in our 12th year of a bull market. that will shortly be coming to an end. before that happens, you should sell your bad performing investments and raise cash before we have the big crash. rising interest rates and rising inflation will cause
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stagflation. you board members loik hedge funds and the only hedge funds that will do good in a down market will be those with a short only public investment equity strategy. psr you board members still procrastinating about buying a pedestrian office building? with best regards from john stinson of 47-year member of sfers. >> president: okay. if there is no further public comment? >> thank you, callers. if you have not already done so, press star 3 to be added to the queue. moderator, do we have any callers on the line? >> madam secretary, there is one caller on the line. >> thank you. caller, please state your name and your two minutes begin when you speak. >> caller: yes, this is fred sanchez with protect our benefits. i mean, it is tough for general
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public comment right now because you guys just came out of closed session and a lot of people probably aren't even back in and ready to comment because it went from closed session to they have been waiting and a lot of people -- so be considerate of that a lot of people just might not be back online because of the break for public comment or for closed session, i mean. but anyway, having said that, it is my understanding that trustee al casciato has decided possibly not to be on the commission anymore on sfers, and we want to congratulate him for his service to the city, to the retirement system. done a real good job and we like the way he's conducted business there. so we wish you well and getting close to retiring again.
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so thank you for your service. that can be said for jay on how he's been great as the executive director. i know we have him for a while longer, but any chance i get to congratulate him on what he's done and that's great. so right now we're just moving forward and we're trying to still trying to get numbers on what is accurate as far as how many people are still here that are retirees before 1996 and will continue to try and work with you to get the most current numbers. my hats off always to the retirement system. thank you. >> thank you, caller. moderator, do we have any further calls? >> madam secretary, no further callers. >> thank you. hearing no calls, public comment is now closed. >> thank you.
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next item please. >> item 6, action item, approval of the minutes of december 8, 2021 retirement board meeting and december 3, 6, 7, 9, 15, 22, and 29 special retirement board meetings. >> at this time i will entertain a motion to accept and approve the minutes of those meetings as stated. >> mr. president, i move we adopt the minutes stated by board secretary. >> thank you, commissioner bridges. is there a second? >> second. >> boy, did we have a lot of meetings. >> commissioner heldfond, correct. you are very correct. and thank you for the second. public comment please. >> thank you. callers, if you have not already done so, press star 3 to be added to the queue. moderator r there any callers? >> madam secretary, there are no callers on the line.
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>> thank you. hearing no calls, public comment is now closed. mr. casciato. >> roll call vote please. >> mr. commissioner bridges? >> aye. >> commissioner driscoll? >> aye. >> commissioner gandhi? >> aye. >> commissioner heldfond? >> aye. >> commissioner safai? >> aye. >> mr. stansbury is absent. president casciato. aye. we have six aye's. motion passes. president casciato? >> thank you. next item please. >> item 7, action item, consent calendar. >> at this time i would entertain a motion to adopt the consent calendar. >> mr. president, i move we adopt the consent calendar. >> thank you very much. >> i'll second. >> moved by commissioner
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bridges, seconded by commissioner heldfond. public comment please. >> reminder to callers to press star 3 to be added to the queue. moderator, are there any callers? >> madam secretary, there are no callers on the line. >> thank you. hear nothing calls, public comment is now closed. >> roll call vote please. [roll call vote on item 7] [consent calendar] thank you. we have six ayes. motion passes. >> president casciato? >> okay. next item, the investment calendar please. >> item 8, action item. recommendation to terminate the dfa emerging markets core equity strategy. >> commissioners, items 8 and 9
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are related. staff is recommending the termination of two emerging market equity strategies managed by dfa. we have brief memos that describe our rationale for both recommendations. the remaining proceeds from these strategies, which is approximately $184 million today, will be used to fund new strategies that have been recently approved by the board. but before i turn it back to the board for questions, i would like to take a moment and acknowledge and thank d.f.a. for the partnership over the years. d.f.a. has been an amazing resource for sfers. we are grateful for our relationship over the past decade. without any further comment, i will turn it back to the board for any questions you may have on this item and we can move to item 9 which is a similar recommendation. >> thank you very much. any public comment please? or first of all, any commissioner comments?
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seeing none, public comment please. >> make a motion first? or public comment? a reminder to callers to press star 3 to be added to the queue. moderator, do we have any callers on the line? >> madam secretary, there are no callers on the line. >> thank you. hearing no calls, public comment is now closed. >> thank you very much. and i will entertain a motion to adopt staff recommendation. >> excuse me, commissioner casciato. this is commissioner driscoll. i would like to make one comment. i didn't hit the microphone fast enough before we vote. >> president: okay. >> the performance is one of the main reasons about why we are terminating them. the issue and the observation was made about their size as perhaps one of the reasons why they have not performed well for us. do not know. but that is an attribute that we should not focus on but their
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performance and the people generating that performance with the fund or whatever strategy we have invested in them or with them. anyway, i will support the motion to terminate them, though they are a good firm, and because of their performance. thank you. >> president: thank you very much. so do we have a motion? do i have -- do i have a maker of the motion? >> so moved. >> so moved by commissioner heldfond to adopt staff recommendation. is there a second? >> second. >> seconded by commissioner driscoll. roll call vote please. >> commissioner bridges? >> aye. >> commissioner driscoll? >> aye. >> commissioner gandhi? >> aye. >> commissioner heldfond? >> aye. >> commissioner safai?
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president casciato? >> aye. item 9, action item, recommendation to terminate the dfa emerging market small cap strategy. >> again, we provide you all with a brief memo describing our rationale and happy to answer any questions. >> any commissioners have any questions? >> al, can i just add nepc has reviewed both of the items and is supportive of the recommendation. nepc has reviewed both items and is supportive. >> president: thank you very much. appreciate that. thank you. do we have -- i will entertain a motion on this item.
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>> move to adopt the recommendation. >> second. >> motion by commissioner heldfond. was there a second? >> second. >> commissioner driscoll seconded it. >> president: thank you. public comment please. >> thank you. reminder to any callers to press star 3 to be added to the queue. moderator r there any callers on the line? >> madam secretary, there are no callers on the line. >> thank you. hearing no calls, public comment is now closed. >> thank you very much. roll call vote please. >> [roll call vote on item 9]
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>> thank you. president casciato -- excuse me, commissioner stansbury is absent. president casciato? >> motion passes. next item please. >> item 10, discussion item, chief investment officer report. >> thank you. commissioner, i will try to go through as much as information as i can and focus on investment returns, board approved investments and updates on staffing. with respect to performance, i will focus on calendar year 2021 but want to acknowledge in the month of december the equity markets were strong, fixed income markets were down slightly and sfers produced an estimated return of 1.44% for the month. importantly for the first six months of our fiscal year, sfers is off to a good start generating a return of 6.7%,
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which continues to be well ahead of a hypothetical 60/40 or 60/30/10 portfolio. so far it will be six months to make good progress towards the 7.3% discount rate. starting quickly to the calendar year 2021, i guess steeling al's thunder for what he will report in march, except for fixed income and emerging market equity, 2021 was a remarkable year for asset class returns. global equities, particularly in the u.s. were driven higher by the monetary policy and fiscal policies for the full calendar year, global equities as measured by the index was up a little over 18%. the s&p 500 as a measure of u.s. stocks was up 28, almost 29% for the year, fart outpacing international developed markets up about 11.3% for the year. in fact, 2021 caps the best three and five-year performance
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for the s&p 500 since the late 1990s and while it felt more volatile than it turned out to be, 2021 was on a particularly volatile year in the public equity markets at least in the u.s. the largest draw down in the s&p 500 during the year was 5%. and most benign markets that we have had in the last 25 years. as i noted, emerging markets, however, were quite volatile. we talked in the past about the regulatory changes taken by the chinese government towards antimonopoly focus on specific industries and consumer-protection based regulations that rattled the chinese markets but the chinese markets represent 1/3 of emerging market equities down about 2.5% for the year. similarly, fixed income strategies were lower and core bonds, if you will, as measured
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by the bloomberg barclays u.s. ag index was down about 11.5% for the year and long data dated or long duration fixed income were down with the treasury long index down where companies glow ll biannounced $5 billion -- globally announced $5 billion and the global i.p.o. market has an exceptional year. the i.p.o. market is obviously important to sfers as it is the primary means for us to realize the venture capital portfolio. last year 2021 saw a record number of deals, almost 2400 i.p.o.s raising $450 billion. both were records and both were
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substantially higher than in 2020. and i.p.o. volume importantly for sfers was led by the technology and health care senters. and the estimated returns for sfers for the calendar year was 22.3% and results for the year were led by private equity which returned an estimated 58% for the year. real assets, private credit, public equity posted double digit returns as well. and up 3% for the year and fixed income down modestly at 82 basis points. sfer sksz we estimate was up 22.3% for the year. that compares to 60/40 portfolio and 60/30/10 which would have returned approximately 7.6% and 11.6% respectively and far, far
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outperforming those proxy type portfolios. this said and acknowledged that the last 18 months have been an exceptional period for public equity and private equity assets. with respect to private equity i do want to draw your attention to an asset allocation matter if you will or point. on the second page of the cio report and attachment to the cio report called a plan value report and the second page of that report is titled allocation summary report and at the end of the year, sfers has 29.9% in private equity, which is well ahead of the 23% target and essentially at the top of our allowable range which is 30%. this is something we monitor but i wanted to point it out and just note we're comfortable with this situation that we have or allocation that we have for a couple of reasons. but first of which is that that 30% that we currently have in
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private exsecond the result of tremendous performance. as i noted the private portfolio as a whole was up 58% in 2021 and within that the buyout portfolio was up 38% and the venture photophotowas up 80% in 2021. we have the high allocation as a consequence of great performance. and those returns compared with 12-13% assumptions that we use in asset allocation modelling and within our patient models. second, and this is important, approximately 20% of our existing private equity exposure is actually in the form of public equities. i noted the i.p.o. market last year was 20% of the private equity portfolios in public equity securities which is much, much higher than the historical average of 10%. this is more important as we think about our overall asset allocation and future liquidity as the exposure wills eventually be distributed to sfers.
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and speaking of distributions in 2021, sfers received more than $1.7 billion in private equity distributions during the calendar year. in fact, the private equity portfolio along with the real assets portfolio was cash flow positive for the calendar year. that is a notable achievement. finally t valuations we show for private equity at the end of the year are lagged by at least 1/4 and we all know we have seen pretty substantial volatility in the public markets and for the third reasons and to 20% of the exposure is in the form of public equities and three t marks you see are somewhat delayed. we are comfortable with the 30% allocation. so i wanted to point it out because as an asset allocation matter, we are basically at the top end of the range. and i will stop there and make a couple of comments. we have seen exceptional returns
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over the last 18 months. it is important to recognize and i think allen martin said this a few times that the returns are in large part borrowed from the future. when you have strong returns like what we have experienced with yields, spreads and risk premium generally are compressed which means that future expected returns will be lower than what they have been. this comes at a time when the macro situation is complex or still dealing with the ongoing pandemic and we're dealing with rising inflation, rising interest rates and while to predict future return, i am confident we will see far more volatility in the equity rates and currency markets in 2021. i'll pause there and if anybody has any questions on performance. otherwise, i will move through some of the more administrative matters in the cio report. i trust staff is at the end of the year are at all-time high at
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37.1 billion. next i will move on to an update on board approved investments of which there are several. at the meeting on december 8, 2021, the retirement board approved in closed session on investment of $80 million in kennedy and klpc and both investments closed on december 16, 2021. these investments are classified as credit opportunity investments within sfers private credit portfolio, and these are sfers second and third investments with kennedy lewis respectively. next at that same meeting december 8, 2021, retirement board approved in closed session an investment of up to $25 billion in early stage ventures llp and that investment of $25 million closed on december 15, 2021. the fund is classified as a venture capital investment within sfers private equity portfolio and sfers second investment. next at the meeting on december
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8, 2021, the retirement board approved in closed session an investment up to $100 million to be allocated between new enterprise associates 18 and nea18 venture group equity. sfers investment of $50 million in new enterprise associates 18 and $25 million in nea venture growth equity closed on december 22. these investments will be classified as venture capital within sfers private equity. next at a special meeting -- thank you, all, for your efforts in getting this meeting on the books -- on december 22, 2021, the retirement board approved in closed session up to $200 million in biotechnology value fund and the investment of $50 million closed on december 28, 2021. this is an opportunistic investment within sfers public equity portfolio and fer's third is the partner.
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>> on december 22, 2021, up to $60 million in artemis health care fund two and closed on december 31, 2021. classified a z a real estate investment when sfers real assets portfolio and is first investment with artemis real estate partners. our meeting on october 13, 2021, the retirement board approved in two $40 million investment officers to australia or other sibf australia and sfers committed $33 million to the fund which closed on december 30, 2021. the commitment is classified as a real estate portfolio within the real asset portfolio and the third investment with cabot properties. next at the meeting on november 10t retirement board approved in closed session an investment of
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up to $25 investment and $25 million closed on december 22. and classified as a venture capital investment and private equity portfolio and sfers first investment with biotrack. next i'll give some updates or provide updates on personnel as noted last month -- i know i mispronounced your name -- but has joined from the cost of county and retirement association and brings 15 years of private equity experience in fund and direct investments. and as part of the interview process when he was hired, he knew he would be called upon now to introduce himself. will you mind taking a moment and introducing yourself to the board? >> thanks, kurt.
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appreciate the warm introduction. good afternoon, commissioners. nice to see everyone on camera. and kurt covered my experience well. i am excited to be joining a great investment team hear and look forward to supporting them. >> we are thrilled to have you. lots of work and you are well aware of the pipeline ahead. >> we we continue to make acquisitions across the officers portfolio. afternoon active recruitment process, chris terrazano has joined and the team and a bba in
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fbs and international finance from the national champion university of georgia and is a cfhr holder. we are thrilled for chris. competitive process. congratulation there is. finally, last item for me, i want to highlight the next investment committee meeting for february 16 at 1:00 and will focus on and we will be joined to whom is the cio of the santa clara transportation the a topic that our staff sees quite a bit about and our expectations we'll have more exposure to digital information going forward. i will pause there to answer any questions. >> any questions for kurt?
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>> president casciato, i would like to say footnote, welcome to the new staff members and congratulations to chris and the georgia bulldogs, even though the s.e.c. will hold it against them. >> president: thank you very much. and a local young man on that team, too. >> any other comments? if not, public comment. >> thank you. reminder to press star 3 to be added to the queue. moderator r there any callers on the line? >> madam secretary, there are no callers on the line. >> public comment is now close. >> thank you very much. next item on deferred compensation plan calendar. >> item 11, discussion item. deferred compensation committee report.
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>> thank you, madam secretary, mr. president. i will submit the report as submitted and read because there is no items being forwarded to the board for action. basically discussion items. so there is nothing to sort of have the board take action on. the report will be submitted as is. >> chair bridges, i believe we have one item. the target date -- >> is i not on there? >> it was. go ahead. >> that is the next item. >> that is the next item. >> i'm sorry. i thought you said there were no items -- >> i am reporting on my report. >> okay. sorry. >> president: thank you very much. that is the next item. >> any public comment on this item? >> thank you. callers, if you have not done so, press star 3 to be added to
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the queue. moderator, do we have any calls? >> madam secretary, there are -- i'm sorry, madam secretary, we do have one caller on the line. >> thank you. caller, please state your name. your two minutes begin when you speak. >> hi. this is fred sanchez for protect our benefits. i should have spoke at the end of the chief investment officer's report. i see investments like $2 million, $200 million on and $100 million here and $40 million here and all these investments, and the investment of paying the people who retired before 1996 is somewhere plus and it's about being being educated and understand the amount of money and is
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negligible compared to the value of $137.11 billion. i hope trustees and people there can educate the supervisors a a to owing a t seniors and if they have the kind of money they have done a fabulous job getting, let's invest in these most senior people who really need these services. thank you. >> thank you for your call. moderator, do we have any further calls? >> madam secretary, no further callers. >> hearing no calls, public comment is now closed. >> can you call the next item please? >> item 12. action item. sfdct target date fund glidepath refresh. >> diane, you are on.
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>> thank you very much, president casciato. good afternoon, commissioners. we only have a couple items on the dc calendar. and the investment manager and serves as the plan default investment alternative and this means no other investment is -- if no other investment is chosen by the participant, they are automatically invested in the target date and vintage based on the year of birth. russell has served as our glidepath manager since 2010 and as noted in the memo, every several years russell works with the city and county of san francisco to obtain demographic information update the pdf asset allocation. based on recent salary data and actuary assumptions in light of the latest forecast. russell is proprosing some
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glidepath changes including global equity cap and reallocation from growth exthe oak high yield and reallocation from commodities to infrastructure. and a reminder, this item is specific to asset allocation changes and not the underlying fund manager selection which is done by our consultant. callan has reviewed the glidepath changes and has no objection. they were presented and approved as chair bridges reported last month and is ready for full board approval. once approved the glidepath changes will be implemented alongside the annual row down which is scheduled late they are month to maximize trading efficiencies. i will now turn it over to russell to walk through the proposal. representing russell is chris kyle who is a newer resource to the plan. mr. kyle has a cfa and works closely with the head of dc
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solutions at russell. the board is familiar with mr. moiree as he has been on the mandate since the first five-year term and holds several degrees and is a sfa charter holder. before we begin, however, i would like to ask the president if he would like an abbreviated or full presentation for the board. >> president: i will ask the commissioners what their preference is. any commissioners? if not, let's do an abbreviated, succinct one. thank you. >> certainly. thank you, president casciato. mr. kyle, would you like to begin sharing your screen and begin? >> of course. thank you, diane. thank you, board. good afternoon. i appreciate you having us out today. i will certainly accommodate an abroef yated version, and so sharing on my screen now is
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going to be a starting at page 22. however, if you have any questions during the session or afterwards during the overview, happy to take them. so less critical to the time now is the first after of the materials and if you look on page 23, we will be providing detail outside of and assuming the assumptions used to go into the changes to the glidepath. obviously happy to circle back at any point to go through the preceding material, but as it stand, we recommend no change to the glidepath shape, meaning the split between growth and capital preservation exposure should remain the same and continues to remain appropriate for the participant base. however, we do suggest changes to the underlying fund allocations. note this does not include the addition or subtraction of represented asset classes. in other words, the asset class and fund exposure you currently have are appropriate for the glidepath in the inclusion of other asset classs is not
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necessary at this time, although that is something we considered and continue to research and evaluate. so what do we recommend specifically? diane went through a few of the items but i will go in a little bit more detail as it relates to the changes to the fund vintages that will be showing shortly. so first we will reset, if you will, the global equity market cap weights. it is previously established that exposures relative to the index or global market index should be neutral for u.s. holdings underway for non-u.s. and overweight for emerging markets. a number of factors can impact the change to the regional market cap weights over time and within the index and so given this is something that we do come around to every three years, we feel it is appropriate to adjust the exposures baing in alignment with your beliefs for the fund. our adjustments did so accordingly primarily by taking away from non-u.s. exposures and adding to u.s. and emerging markets. and second, we sought to
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reallocate from global equities the high yield. previous exposures to high yield were minimal and this bolstering of the asset class away from global equitys is attractive because it dampens the risk and smooths out the return profile for all fund. this slight give up in return is mild and when paired with the lower volatility helps tweep the participants on track for retirement and minimizing the risk profile long term. lastly at the bottom you can see we re-allocated from commodities into infrastructure and we are pleased with the overall exposure to real assets, namely, the three asset classes, but wanted toed a just the exposures at the margin within. so we propose shifting about 1 to 1.5% away from commodities into reits and infrastructures. these are two attractive asset classes in comparison to commodities given the latest capital market assumptions and also help offset some of the increased cost in the target date funds associated with the first two changes.
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and i will skip ahead to a few more pages and those are some of the direct asset allocation changes we did propose, what is important here is the adjustment to fees. on average fees are unmoved at a fraction of a basis point lower on average from current levels. we were cognizant of the fact that given the higher scrutiny of fees into the markets, we wanted to make sure there wasn't f you will, too big of a splash in our proposal unless absolutely necessary in our evaluation of probability of success for participants under this glidepath shows no dramatic changes were necessary, and thus, we were able to be within a small change within the fees themselves. as diane noted, for implementation, we will proceed with a rebalance and trading to the targets at the end of the month. we have been working with your record keeper voya to ensure they are ready to implement changes.
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following approval, that is something we can initiate. lastly, i will skip ahead to page 35 which is the allocations itself. i know this page is not incredibly helpful. you can see the allocation changes we will be rolling up to at the end of january. however, on page 37, what we do show is something that is a bit more detailed and this effectively details the changes from your current fund lineup. what your participant cans invest in and what we are looking to implement. here you can see the changes to the equity fund that account for what we just spoke to which is namely the global index reset, a sift away from global equities into return seeking fixed income as well as a minor adjustment to commodities, infrastructure, and reits. i will pause there for any comments or turn things back to the board. happy to take either. >> does any board member have any questions or comments? >> i will have one question later regarding one of those
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changes, but i will wait until you get to the end. >> thank you. i am just going to go back to the beginning of your presentation, chris. where you talked about bringing back from the foreign investments back to the united states for more stable investment. because of what the pundits are saying on the news shows and all predicting doom and gloom and some of our own members are predicting doom and gloom as we get some of -- in fact, some of them in the public comments have come in monthly. i did get a phone call from one member this morning. he was elder, and he says to me, i think i have to get out and put everything in cash. and they are afraid. so what are we -- what can we do
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to assure them that we're providing the best for them and kind of how can we assure them that we are looking out for their best interest at all times? and looking into the future as much as we can and trying to provide them with the best information possible? >> certainly. certainly. i think there is a few different ways that we can approach that. first of all, when we do run this analysis, i think what's helpful is this page right here. i did skip over it initially. but with the detail is the probability of success for participants. essentially when we took in all of the demographic data from your participants, we were able to evaluate the probability of success through investment within the target date funds by using the appropriate vintage. and what we found is on the left side you can see the miscellaneous cohort on the right. you have a safety cohort. and looking at the left for
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miscellaneous specifically, the probability of success for anybody investing in the target date funds, given the fact that you have such a generous db plan tdc plan and what people are contributing into it really results in a very strong probability of success especially if they do invest in the target date funds. and so by having this be the qdia or the default investment for your participants you as commissioners and as participants, they can feel rest assured that there is a high probability of success should they stay the path within this investment program. i think the other component here is that we outline what some of the success of the funds have looked like back to 2013 and slightly after we assumed this role as a manager of your target date funds. what we found is if you look at this light blue line, that is the median outcome of returns
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over the last seven or eight years and the dark blue and the participants and the median value of the participants within the target date funds have experienced which is significantly higher than the median that you can see right here. and so hopefully that addresses any concerns that you have in terms of participants' ability to, i guess, successfully retire and feel assured. i think that i can also say despite the fact there is doom and glom, that is something that is often spoken about year over year and given the fact that inflation is very strong. cash is likely not something that you would want which is precisely why we have the qdia in place far default for any investors to go in. >> thank you very much. diane, my only suggestion would be as we probably should take this recording of this presentation and share it with
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the retiree group so they can share it with their members. >> i believe that all the retirees have access. and they do have access to the board materials, but we can look at putting out information to talk about the market and to give people a sense of comfort as you are approaching the doom and gloom information. and information available on the website and voya that talk about capital market assumptions and the best way for you to protect yourself in the markets, but i think actually it's okay with the committee, i think we have our consultant greg on the line as well. greg youngerman can perhaps share a few words for our participants. >> thank you very much. greg? >> good afternoon, everyone. and briefly, russell and mr.
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kyle just reviewed is a very, very diversified exposure across many, many different asset classes that use the underlying funds in the plan as well as additional asset classes for various different exposures and risks that the capital markets experience on a daily basis. so i think a lot of thought went into not just the return that we're trying to seek but importantly t risk profile particularly those near or at retirement when your balance is the largest and managing those trade-offs in a very thoughtful manner. so it's very much in other target date managers and asset al kayer tos do and very diversified nature -- and a very
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diversified nature in the capital preservation category and the allocations are so much that de-risk as that participant gets near or at retirement. that is really part of the target date solutions. >> thank you very much. chris, you can continue please. >> yeah. that was everything that i had commented for that presentation. >> diane, do you have anything further? >> i think commissioner driscoll has one more question. and we are bringing this to the board today to seek their approval after the bcc has approved the proposed changes, so just a reminder on what the action is, but i think commissioner driscoll did have some comments. >> you are on mute. >> yes, i do have a question. i will comment to try and help
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this question that commissioner casciato was presenting and member had a concern with. on pages 34 and 38, perhaps the number to lock at is the capital preservation line. it is going up to 5 # a% for the older people with near target date funds as opposed to younger people looking at the 2065. so again, these documents are loaded with information, but if we're trying to help people get to what they may be concerned about, that number emphasizes how rewe're trying to lower that kind of risk. anyway, i will go back to my question. the changing from the commodity allocation to include the infrastructure, and i think there was some real estate -- >> yeah. right here. >> it has to do with the inflation assumption that you show on page 48 in the appendix. i assume you are using the
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10-year numbers. >> yes. you are looking here at the far right side. i will see if i can zoom in for everybody's benefit. >> and that inflation assumption of 2.1, granted, that is the arithmetic one, and i will say it is low. i believe we are using 2.25 still in our defined benefit number for the 10 year. perhaps our actuary service consultant is still involved in the meeting and can correct me if i am wrong. but the issue is that it goes to how the forecast of some greater returns for the two other subsets or asset classes that you wanted to get inflation protection from in lieu of the xhod tis. we can argue whether inflation is # 5% or 6% and there is that
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10.21 number. there is a tweaking of the target date of the glidepath. that is the question. sorry to make it so complex, but trying to look at a lot of data and distill it down to one question. that is the problem i have with the recommendation that has been made by you for the glidepath change. thank you. >> sir, just to clarify, you are seeing an inflation figure that is lower than what currently exists and you are having an issue with the commodities return to the inflation? is it the latter? >> basically the two things in combination because we go for commodity for inflation protection. >> sure, sure. i will clarify off the bat that this is actual actually because this is a project we have been work on over the course of the year. we have been using capital markets data from december 31, 202, back when inflation was lower than what we are experiencing right now. i will certainly admit that yes, inflation has risen and the expectation is higher than the
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1.7 figure that is right here, and projection long term 20 years and will tweak these globally and meaningfully outpace with the interest to inflation and maybe not to the same offsetting degree and it is a meaningful component to address that. does that help address some of the question, mr. driscoll? >> it helps a little bit.
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>> how accurate is russell for lucid real estate and for global listed infrastructure and the changes are scheduled to be implemented this month. it is a very timely question. >> the forecasts are not stating a point estimate and the central value is certainly what is listed here at the between two to two and a half and the update of the forecast in a couple of weeks. we invest a range of possibilities. our analysis looks at about 1,000 different scenario paths of how the market might evolve.
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i think the inflation outlook may tick up a little bit, but generally the view is we will see inflation peak later this year or early next year. and it will presumably drop a bit after that. whether it will come to 2.5 or that range, we think it's likely but there may be a little bit more of a wedge in there than this so may be in the 3% range or something like that. that is something we evaluate on an ongoing basis and are kind of moving funds around within the category.
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and they tend to be responsive to some sources of inflation and generally provide an a little better and stronger commodities as well as not quite as episodic. so commodities do well in bursts >> we aren't allocating zero to commodity but are downgrading that a little bit versus the co-members of the real estate asset category. so i think in the long run the best way to fight inflation is to have a diversified portfolio and in the short run, i think that these real assets are often an important component in the
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areas. >> most of the asset classes utilizes the issue of how much they think inflation is going to be, which you are obviously doing as well. my question, then, is you have a forecasted and asked in the past and in the target date funds. so as far as accuracy, i am not sure how to measure that and get to it. and i know on average it comes up at 3.5. and well, it probably will never come out exactly there. and follow the patter than we are assuming? the range of outcomes with the
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central tendency for inflation around 2.5 and the volatility around 3 is what tells us for the is up to 2.5 and in that sense our forecast is extremely accurate. this is not 2.5 every single year. so if we measure it that way, we are not accurate at all. as this is a description of the range of changes that can home and in terms of the global listed infrastructure. >> i think the return patterns of global listed infrastructure have been generally within the range we predicted over short
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periods of time such as the last year and has been well outside the range on the upside. that is an inaccuracy for that single year. i think over time we have done fairly well at capturing the range of behavior. >> if we are proceeding with this today, the other consultants have looked at the previous forecasts and looking at the results and compared the forecasts results. i am not looking for perfectly accurate number but how tight the range is. some years above, soment years below, but indicates how useful the forecasts are. that concludes my questions on this subject. >> thank you very much. anybody else have anything. if not, we will call for public comment and call for the administration calendar after that.
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>> thank you. reminder to callers to press star 3 to be added to the queue. moderator, do we have any callers on the line? >> madam secretary, there are no callers on the line. >> thank you. hear nothing calls, public comment is now closed. >> it's been motioned and seconded. commissioner bridges? >> an i will second this motion. any discussion?
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and we already called for public comment, so roll call vote please. >> [roll call vote on item 12] thank you thank you. we have six ayes. motion passes. next item, number 13. discussion item. sfdcp, monthly report. >> thank you. the last item here on the calendar is the plan manager report. first the sfdcp office is once again closed to in-person appointments through february 14. this was strongly recommended by dhr and more details on office
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closure will be covered by executive director huish. all scheduled in-person appointments have been moved to a virtual format instead. and the counselors are conducting virtual meetings as many city departments have the employees working from home. and we are preparing a new list of webinars for q2 and the other item of note is the stable crediting rate as a reminder this rate is guaranteed for the quarter and will reset for q2 and holds around 19% of plan assets under $1 billion and is considered the most conservative fund in the lineup. and for q1, the stable value credit rate is 1.67%. this is the 4/5 drop from the q4 rate.
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recommendation on comments and fixed income and interest rate as you have seen in your updated performance reports and the stable value fund through november. i believe you have the update from november and was up 1.6% year to date and that vastly outperforms the core bond fund which is the active fixed income which was down 93 basis points. the infor frame of reference was down 1.29% and the beauty of stable value is participants transact at book value given the various different providers that that affords. and that book value is really a smoothing mechanism. so that one participants don't
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lose money in the fund. and that they're always amortizing back to a market book value va show of 100. and has ranged since early 2018 i have in front of me as 1.91%. the high. and that was back in end of 2019 at 2.6. so it's really floated in a very nice range between just over 1.5, which it is now, up to 2.6. the various different mechanics within the fund continue to work very well and it has done that job of capital preservation. in the last point i would leave you with unless there is any questions is the current bond portfolio is actually increased. it was 86 basis points at the
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end of last quarter and now currently yields 1.24%. so that increase in yields is going to be helpful in contributing to a more stable and with that, any questions on that? >> president: any questions? not hearing any. call for public comment. >> callers, if you have not already done so, press star 3 to be added to the queue. moderator r there any callers? >> madam secretary, there are no callers on the line. >> thank you. hearing no calls, public comment is now closed. >> president: i will thank the deferred comp staff for an excellent presentation. appreciate it very much.
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and we will move to the administration calendar. >> item 14, action item, review and acceptance of the gasb67/68 report as of june 30, 2021. >> good afternoon, commissioners. this fulfills the accounting requirements of the governmental standards board and this is a separate valuation that determines the funding requirements and is used by each of the four plan sponsors, city and county, trial court, unified school district, and the community college district. and the heart of this report is really table 5-11, which i am pulling up right now. i would just like to point out the balance at june 30, 2021 and the total pension liability and
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the planned few phi due yash and the net pension liability which is the difference between the two. notice at the beginning of the year we had a net pension liability and unfunded total pension liability of $5.4 billion. and 26 was a depressed value at the end of june 30, 2020 early in the pandemic. changes for the year are as expected for our total pension liability. that changes $1 billion for the total pension liability june 30, 2021. we have about $33 billion in liability out of 7.4% discount rate. the changes are, of course, our assets where we had a $9 billion investment income and our net pension liability is now flipped from 5.4 billion to a negative
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2.6 billion. this is at 7.4% discount rate and next year at june 30, 2022, the gasb liability were at 7.2% at the june 30, 2021, that is about $34 billion and the assets would still exceed that at june 30, 2021. that is all i wanted to share with the board. we ask the board accept the report. >> thank you very much. any comments? and if there are after the comment, i will entertain a motion to accept the report. >> just a comment for those who are looking at these actuary numbers and not the market value number that drives the supplemental cola for those trying to interpret what we are doing here and go on to discuss wit other members. again, these are an actuarial
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numbers. >> for financial reporting. these are not used for funding requirements. >> thank you very much. i will entertain a motion now to adopt the staff report. >> so moved. >> moved by commissioner driscoll. >> second. >> moved and seconded. public comment please. and then roll call. >> thank you, callers. press star 3 to be added to the queue. moderator r there any callers? >> madam secretary, there are no callers on the line. >> thank you. hear nothing calls, public comment is now closed. roll call vote. [roll call vote on item 14]
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thank you. we have five ayes. motion passes. >> thank you. next item please. item 14, discussion item, executive director report. >> good afternoon, commissioners. i have listed four items that i wanted to provide to the board as updates, but i will start with the last three. we forwarded a letter to you in december that was sent out by mayor breed that basically announces what the vaccination requirements are for all policy boards.
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and that includes that all all members of policy boards will fully vaccinated and recorded that status to the city via the personnel system by january 31, 2022. there has been some discussion as to whether there would be a booster requirement, but at this point in time there is not a booster requirement. it is just folks be fully vaccinated either with the two doses or the one christine johnson dose. i have also provided you a copy of a charter amendment that has been introduced to the board of supervisors to be potentially placed on the june 7 municipal ballot. and the charter amendment basically is urging adoption of a declaration of policy urging the retirement board to divest from fossil fuels.
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and also amending the charter to require that one of the members of the retirement board who is currently appointed by the mayor shall instead be appointed by the board of supervisors and to require the board of supervisors appointed member to be experienced in the management of investment portfolios based on environmental social, and government factors and we were notified of this because it does impact the retirement system. obviously the charter requires us to submit any kind of cost impact. and with no impact on the system and however, we will be tracking and letting the board know what the outcome of this introduction
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is. as we have changed our return to office plans at the strong recommendation of the city as we had recorded before, staff was returning to the office effective november 1 and doing in-office work at least two days per week. and starting in november with the spike in the positivity rate and in the city, actually, a surge in positivity rate in the city, dhr strongly urged us at the end of december to basically encourage folks to work 100% remotely, return to 100% remote work through initially january 18, and then last friday we got an additional memo because, again, watching the science and watching what's happening as far as the surge in infections and
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positive tests in the city, the city urged all departments to allow all nonessential employees to continue working 100% remotely through february 14. and so we announced that on monday that our leadership team had agreed to that. and we have a very small group of folks who have come daily as an essential function of opening the mail, distributing the mail, doing those types of things but for the most part as director indicated, we are not taking in-person appointments very any kind of in-person service. and that we are continuing to meet our members' need by remote access to all of our services. also, you had received i think earlier indication and with the
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emergency orders and remote meetings and board members attendance. and remotely to retirement board meetings and not going to be allowed. we had a department head meeting with the mayor and are continuing to look at the deadline to be to have in-person meetings as a requirement. we will play it by ear and we are trying to make sure that we meet all the safety requirements to have the board back into the
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board room. with that, i will stop and if there are any questions on these three item, i will be happy to address those. thank you, jay. any wish any question on the items? if there is nothing, then you can continue please. >> and because we are in the process of fiduciary and we have a new city attorney, so we thought this would be a good opportunity for us to do an update or a review of one of our more important policies and that is the code of fiduciary code
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of conduct and ethics. this is the board replaced the code of conduct ethics and governance. i will not go through line by line but want to bring to everyone's attention what the policy states and the mechanism for the board to enforce this policy and what the expectations are. and certainly as provided in the policy, your ultimate is from the california constitution as fiduciaries to the trust to make all of your decisions in the best interest of the beneficiaries of the trust. and nothing in this policy would supersede it. so to that point, the policy
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points out if you feel there is a conflict in the fiduciary responsibility and the policy states to consult the city attorney. to resolve any types of those areas. >> they bring general standards of conduct and include acting ethically with decorum, courtesy, integrity, and professionalism as you deal with each other and the board members. as you deal with staff and as you deal with stakeholders. and also, another statement is that the behavior activity should not reflect negatively on the board policies and any other
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policies of the city. make good faith efforts to attend the board meetings and notice to the extent possible whether you can attend or not attend the meeting and make sure consulting on the proper notice to confirm the quorum to make sure they are going forward. this is one the board has put in place that people need to be
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fully we have conferences to go out and gain knowledge and we have not been using that money basically because there are very few in-person conferences but i
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would urge you as long as we are in a situation where it may be continue to be in person and conferences may not be offered. i encourage you to follow the education policy where you should be actively engaged in attending conferences to gain knowledge as well as make connections with your fellow fiduciaries. i would hope starting in 2022 we might have more activity in that area. we also in the policy state that you will be in compliance with the open meeting laws. o t open meeting laws obviously include that there be public access and public comment available for all the public session items, and also requires that there be a full recording of everything that is said and
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conducted in a closed session. and obviously those are not available to the public. they are only available to those folk who is were in the meeting. but it is important that we are in compliance with all of the open meeting laws and requirements. and then there is actually a section in here that i want to read to you. and it deals with -- let me find it here. well, there is a section that was added in 2017 about undue influence including without limitation any attempt to influence staff or consultants
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recommendations. and without interfering with the administration of investment matters. and under official misconduct and the violation of the code and they also in the policy states that nothing shall be restricting the board's power of hearing and inquiry provided by the city charter. they also talk about the board's role in administering the statutory provisions of the retirement system and the policy also states you should be refraining from advocating legislated changes of the meetings of the board unless changes are cost neutral and intended to facilitate more effective administration at sfers. and obviously there are a number
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of other things that and the last one and board members need to abide by and be respectful of all decisions of the board even if you may not have supported that decision that we would anticipate and expect that board members would as a member of the board and respecting the actions of the majority of the board be respectful and abide by all the decisions. and there are obviously procedures in the policy that i want to make sure everyone is aware of and that is if you feel that any board member has violated any of the provisions of the fiduciary code of conduct that the first step would be to talk to the president of the board and try and resolve the herb shoe or correct the action through the president of the board or the vice president of
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the board. and potentially if the president of the board may have been the problem, obviously go to the vice president and final place where this resides is the governance committee and the chair and the vice president of the board can refer to the violation of the code of conduct to the governance committee and they have not met in a while. this is sort of my commercial that we probably need to set a governance committee and hopefully in the next few weeks or over the next couple of months. i know you are very busy doing a lot of meetings otherwise. but i want to stress the importance of the governance committee in not only formulating this policy, but, in fact, promoting the board'sed a
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adherence to the policy. and -- dissensions are -- the remedy that the board has are at three levels and one would be an admonition. one would be a sanction. and the final one would be a censure. and those are all details in the policy also. i will say in my history being with the retirement system, i do not recall and i don't believe there has been a censure or any kind of action taken on the prior code of conduct or this code of conduct, but i think it's an important document for all of you to read to put in perspective what the expectations are. staff certainly, although they don't have a specific policy are bound by a lot of and frankly, most of the provisions that are contained in this policy and so
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staff models its behavior and the expectation on its behavior from this policy. and with that, i will ask if there are any questions. >> are there any questions to the executive director? any comments? >> there are not. if you are not, are you finished, jay? >> i was going to reference a member of the public. it seemed to me that someone thought it was my last meeting, and maybe they know something i don't know. i do intend to be here in february, so i want to correct that for the record unless i am told otherwise. awe >> okay. thank you very much. appreciate all the good comments made about us.
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>> any other questions or comments? >> i have a question. i thought last month we adopted that policy statement about undue influence. i don't have the exact copy. >> there is a separate undue influence policy. that was done more recently than 2017, and i can get a copy and is a more specific policy adopted a couple of years ago, maybe 2018, 2019. >> perhaps the language can be tied together and a reference and not perceived as separate documents and the same basic concept. >> correct. part of the work of the governance committee, as you note, throughout the policy, the reference to the director and we
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need to clarify that position, and so there is work for the governance committee and the full board to do just to basically try and fine town these and the other thing on my agenda that was not mentioned but was just trigered and i wanted to mention in my report is we are working with commissioner safai to gather information related to cost associated with potentially taking a charter amendment to the same june election that would provide supplemental colas to the pre-96 folks who were excluded as a result of the california court of appeals decision on protecting our benefits lawsuit. and we are working with gen-ed to update the numbers to provide
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commissioners and commissioner safai information to evaluate and i don't know the timeline to when this -- when the deadline is for introducing this and working as fast as we can to get the information. >> and through the president, i can jump in, jay. appreciate that. and thank you for responding. and if the deadline that passed was december 14, but this is more of a conversation for the november charter amendment and would be a november ballot niche tifr and what i have asked you and i appreciate you beginning that conversation and sharing wit the controller, and we are going to analyze the numbers and talk with you internally and begin the conversation to project the benefits to folks and have the conversation with
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other board members to determine where things are. because you need six board members to put a charter amendment on the ballot. so it's not solely obviously my decision and we'll talk with the mayor's office and see how things go. you heard mr. sanchez speak in public comment today and those are more updated numbers i had given him based on information you have provided over the last year. the other question and we don't have to have a discussion about it now is the board policy is to amortize costs over a five-year period and just to have this conversation later, but my deepest while to have that number and investment spreading that cost out over maybe a
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longer period of time. something to put out there. >> right. that is a recent, well, i should say in the last couple of years that it was based on the recommendation that supplemental colas only benefit the retirees and should only be advertised over a shorter period, but that is certainly a funding policy question that would be in the finite the finite and in this instance and spread that out over a longer period of time for the overall system. we can have that conversation and presented to the board and have a conversation.
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>> all right. thank you. >> this raises a question if the post-2012 will be posted as well. >> conversation is about everything post-2012, i think. it is not prior to that. but we will run through numbers and come back and have a conversation about the different scenarios. >> i believe our costing requests are related to everyone who was excluded by reason of the court of appeals, but we have retirees who started working for the city after 2012, and that was also to commissioner driscoll's point, a
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group that was excluded but reason of the board of appeals decision. and i believe -- and you can correct me if i am wrong -- but including the costing for any kind of potential retrosupplemental colas for that group they may have missed, and they are certainly included in the costing for future supplemental colas. commissioner driscoll needs to always remind me of that group and that is a young group, but it is a significant number who are retired who joined the city after 2012. >> it is the pre-96 group only? >> we are keeping it to that conversation.
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>> i need to leave, mr. president, but i am saying something on the agenda to be put on the agenda and that is the next item. i don't know if the executive director is done with his portion. ichted an opportunity to -- i wanted an opportunity to speak about the upcoming agenda. >> we will talk public comment and take the next item and you will be first. >> reminder to callers to dial star 3. moderator r there any callers? >> madam secretary, there is one caller on the line. >> thank you. caller, please state your name and your two minutes begin when you speak.
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>> a hi, this is fred sanchez with protect our benefits. it's very interesting about that charter amendment to introduce and to take away for socially responsible and fossil fuels and the climate and all those things. it seems like that charter amendment would be asking almost from a policy maker from the board of supervisors. it would be direct violation to the members of sfers not to the board of supervisor. it seems like the charter amendment would be in direct violation of the charter as it stands now. that is all i want to say about that, but as far as i applaud
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supervisor safai to try to get the exact numbers of the cost of what it would cost to pay people hired before 1996 and this would definitely not include and conclude the people hired after 2012. and so we can discuss that charter and it's to get to the exact cost and to control the work with the retirement system. and get that cost and that is appropriate. thank you. >> are there any other callers? >> there are no further callers. >> public comment is now closed. >> call the next item please. >> item 15, discussion item.
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retirement board member to be added to the agenda. >> commissioner safai? >> thank you, president casciato. today i wanted to introduce an item for discussion related toen an issue brought to our attention for the next agenda presented in letter form and i think someone spoke on the public record about survivor awe annuity. i would like to advance an amendment to the sfers policy to allow for survivor annuity to be deposited in a special needs trust. currently it is not aloud and could have terrible unintended consequences for individuals who have disabilities. survivors annuity cans currently only be received to a person individually. for individual who is do their disabilities rely on public-needs benefits such as ssi, supplemental security income, and in-home support services, and low income section
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8 housing, direct receipt of the monthly income can result in a complete loss of the benefits. according to a letter received from retiree is for these reasons that many public retirement systems including the california state teachers retirement system, university of california retirement plan and the defense finance and accounting service and u.s. department of defense have changed their policies and procedures to allow a retiree to direct payment of a survivor annuity for an adult disabled child directly to a supplemental needs trust rather than directly to the child personally. a supplemental needs trust often referred to as a special needs trust is a form of trust recognized by both security administration and the california department of health care services as a vehicle for holding and managing funds for the benefit of a person with a disability where the funds are not considered available to the individual for benefits eligibility purposes.
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if fund from the retirement account are designated for payment directly to a supplemental needs trust, those payment cans not be reassigned or redirect aidway from the trust by the disabled person, then the payments will not disrupt the disabled annuity public benefits. i think this is really important. i think it's just a small oversight but an important oversight that we have had in our system for some time. it would be really helpful to try to make this adjustment so we can ensure that adult disabled children of survivor annuities can benefit directly and not have other benefits they need for them to survive on a daily basis takaneway or reduced. thank you, mr. president. >> thank you. any others have any item for introduction?
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>> the item from russell regarding the inflation number and the asset changes. the more important issue that we will be doing a surge for a firm for the glidepath is up and is a periodic thing we do. i am just trying to let the board understand as well as alerting our manager in the rfp process i will be emphasizing we try to determine how well that consultant does forecasting of rates of return. it is not they have to be perfect or a right answer, but how well they do it is very important and the target date funds are selected qdia inside the deferred compensation program. that has a more direct impact on
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the members participating than actually what we do with our other investments for the pension benefits and the outcome and how well that glidepath is designed affects them. i am alerting you this is an issue that asking a consultant how well they do something have only done it periodically with other consultants over time and never part of an rfp. i am using this as a good of the order issue and a subject to hear about when the rfp results are either processed by the deferred comp committee or the full board going forward. that is part one. >> thank you. any other commissioners? the only thing i have is that i would ask everybody to prepare that we possibly will move the february 9 meeting to february 2 so just -- and that is the board meeting. so just be prepared and we will
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doing some queries. i have nothing else. anybody else have anything? if not, speak up. if not, we are adjourned. >> thank you. >> public comment before we adjourn. >> oh yeah, go ahead. >> callers, if you have not already done so, press star 3 to be added to the queue. >> madam secretary, there are no callers on the line. >> thank you. hearing no calls, public comment is now closed. president casciato? >> president: thank you. the meeting is adjourned. it.
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>> shop & dine in the 49 promotes local businesses and challenges resident to do their shop & dine in the 49 within the 49 square miles of san francisco by supporting local services in the neighborhood we help san francisco remain unique successful and vibrant so we're will you shop & dine in the 49 chinatown has to be one the best unique shopping areas in san francisco that is color fulfill and safe each vegetation and seafood and find everything in chinatown the walk shop in chinatown welcome to jason dessert i'm the fifth generation of candy in san francisco still that serves 2000 district in the chinatown in the past it was the tradition and my
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family was the royal chef in the pot pals that's why we learned this stuff and moved from here to have dragon candy i want people to know that is art we will explain a walk and they can't walk in and out it is different techniques from stir frying to smoking to steaming and they do show of. >> beer a royalty for the age berry up to now not people know that especially the toughest they think this is - i really appreciate they love this art. >> from the cantonese to the hypomania and we have hot pots we have all of the cuisines of china in our chinatown you don't
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have to go far. >> small business is important to our neighborhood because if we really make a lot of people lives better more people get a job here not just a big firm. >> you don't have to go anywhere else we have pocketed of great neighborhoods haul have all have their own uniqueness. >> san francisco has to all
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>> can we have the roll call? >> thank you president follansbee. call to order at 1:03 p.m. and our roll call. president follansbee? >> present. >> vice president canning will arrive later. supervisor chan? >> present. >> commissioner breslin? >>

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