Coming out. Ok. If theres any members of the public that would like to address the commission about going to closed session, now would be the time. Seeing there is no members of the public, we will not have Public Comment. Will everyone please vacate the room that doesnt need to be here . Should we call the meeting to order . Is there a motion not to disclose . Is there a second . Great. Could we do that without objection . Ok, great. Item passes. First order of business is Public Comment. Are there any members of the public that would like to address the commission . My name is john stenson. Id like to give you four good reasons why you should divest from hedge funds. This is a highrisk, highcost, lowreturn and they dont give protection during a down market. I think all you members, including the Investment Consultant have been sold on the theory that hedge funds gives protection. Which is not true. Lets go back to 2008. That was our last down market. What happened to hedge funds in 2008. The average hedge fund lost between 18 and 20 . Im sure youre all familiar with that [inaudible] with a Hedge Fund Manager said that hedge funds could outperform the s p 500. Well, so far the hedge funds are up about 22 and the s p 500 is up about 85 . My contention is there is no reason why Pension Funds should invest in highrisk investments. The best investments the last 100 years have been stock funds and real estate. And a combination of those investments in the 100 years have produced returns between 7. 5 and 11 . And if you stick with those three investments, they will produce the same returns for the next 100 years. And that is why i think you should divest in all highrisk investments and stick with stock funds and real estate. Thank you. Thank you. Are there any other members of the public that would like to address the commission under general Public Comment . Seeing none, well close Public Comment. Next item, mr. Secretary. Approval of the minutes from october 2017 retirement board meeting. Did every member of the board get those changes . Yes. Great. Is that motion great. Second. Are the minutes as in our packet . So, ok. The minutes as amended. We have a motion. We have a second. Commissioner driscoll has a question. So, what was the motion . There was one change. It was to change the work under commissioner macriss comments. There was verbage change where it says rather than opposed absolute return of hedge funds it is critiqued. That is correct. Ok. What was the word that was used . Opposed. Ok. And now it is critiqued. My understanding is the minutes was supposed to be a reflection of what was said and done. Now were going to start editing what weve said and done . Were goinging to put in what we meant im confused because the minutes are justs a simple record. I did not oppose it. I wasnt here. So, commissioner driscoll my memory is the word opposed was used. Not critic. Lets send it back to staph. Pull the tapes. Lets listen to it to make sure we have an accurate reflection of the word that was used. Please. I think there is a question about whether its accurate. So, please just the person who said the quote, theres no question. The person who said the quote had the intention to communicate the message. But corrected the record. Commissioner driscoll, do you feel like you said the word opposed . I think the word opposed was used. Ill be happy to listen to tape. Thats one. Two, if he wants to state his meaning, that is great. But to change the record, that is an incorrect thing to do. What if the record was incorrectly recorded . Well, im saying the recording is what he said. Correct it . If the word opposed was not used, well be happy to change it to what was used. I think that we could reflect if there was going to be a change in his statement, we could reflect that in the minutes for this item. Approving these minutes. But, i mean, i believe the minutes were prepared in accordance with the audio transcript. I certainly can accept if he wants to state what his intentions are is great. But to go back and change the minutes is incorrect. Therefore i will not vote for that motion on the floor. This has happened before and its flown, not this time. Commissioner, you made the motion. There was a second. Would you be willing to have staff review the tapes or do you want a vote on it . My best guess is both words were used. But whats in the minutes are not quotes. Its to reflect the flavor of what was said. The flavor of what i said is that i would become a critic of the Hedge Fund Program because of the transparency issue. Over the last couple of years, it seems we spend a lot of time on the minutes with people making edits every single meeting. Of course, we want the minutes to be accurate. There is a video record of it so people can always refer to that. To the extent that commissioners have a disagreement on the exact can verbage of what was said, im not sure how to reconcile that. People can always vote against the minutes. Or we can send it back to staff and just ask them to clarify. Is there a preference . Its a stalemate. There a motion on the floor . Do you want to call a vote . Do you want to sure. Ok. All those in favor, say aye. Aye. All those opposed . No. Nay. Ok. Great. Next item, please, mr. Secretary. The consent calendar. Well call for a general Public Comment. Is there any members of the naubl like to address this on the side . Ok. Seeing none, ill close Public Comment. No. Sorry. Do you have questions or comments . Yeah. On the consent calendar, the adoption of the summary [inaudible] Service Coordinator as recommended by the Personnel Committee. I was on the Personnel Committee and i was just this is a point for clarification. Im surprised to see it on the consent calendar. I thought it was coming out and then coming to this body and then we would be discussing in closed session. Im looking at you, mr. Chair, the Personnel Committee. [inaudible]. I thought we were bringing this to the full body. It comes out of committee and then comes to the full board for discussion. For further discussion. If we put it on the Consent Agenda, then there is no discussion. Right. But we this is the way it came out of committee. The committee directed staff to put it on the consent calendar next month. They will be bringing back to the retirement board the goals and objectives that theyre going to set for both the executive director and the actual Service Coordinator position for the boards approval. Ok. Id like to sever this item and bring it to this body and put it in closed session. Correct me if im wrong, deputy, city attorney. Were able to sever things off of a Consent Agenda . [inaudible]. Thank you. [inaudible] its a job evaluation on the consent calendar without the full board reviewing it and discussing it seems very inappropriate. So is there a motion . Id like to make a motion to sever the last item on the Consent Agenda. Its item what is this 10112017 excuse me, items 06e. To go on the next months agenda in a closed session for discussion. Ok. Is there a second on the table . Second . Is there any discussion about this . Those on the committee, is there a disagreement . Is there agreement . I think [inaudible]. Maybe we should change that and makes it committee of the whole. To not full out, we do it for were pulling them out of committee. Im not saying you cant. Im saying if you think this is important enough item for the executive director, you want the full board to hear this, maybe we should discuss it. Im happy to discuss about the future governance issue, but what has been before us today to adopt the performance evaluations. If youre nots in th if youn the committee, maybe you havent looked at it. They were september out to everybody. Correct. They could have feedback. I dont think you can have feedback. Not to us, to the lawyers that were in charge of Personnel Committee. Or supporting the Personnel Committee. All that was presented to the Personnel Committee were the results of the survey. That can not be changed. It was in the advice of governance consultant, she was not acting as a attorney, she basically said, this is a new process. Routinely the Personnel Committee is the one who directs that the survey be taken and tha the and that it be given to the full board and discussed as a consent item. That was not result of the survey. That the real issue is setting goals and expectations for the coming year which would be a closed session agenda item for thjand board meeting. You cant change the survey or comments made or the ratings made and that what the board as a whole should focus on is what will areas do you want to set ad the actual Service Coordinator. I see this as saying, okay, the survey was done, comments were aggregated, this is it. This is the board saying okay, its been done, check the box. If you want to have a accept ras discussion about it a separate discussion about it, lets agendize it. Im asking for it to be sweferred from the consent calendar and agendized. You want could have you discussion. Yes. This a nuance but other thoughts for members on the board . Commissioner . First im going to divide it up. Surveys consolidated. Im curious to know if all seven people fill out the survey. I would be curious to find out if some people skipped comments. Only rated part of it. Our job as truss ti as truss y and putting it on consent schend far from logical. This body reviewed the executive director and other bodies for the entire time ive served here. Theyve all been closed session personnel meetings. We want to tha to say that wee delegating that complete employment review, we should take a vote and delegate it to the committee, but weve never dop that. Any comments or thoughts from down on this end . There are so many things it talk about. If you want to make the Personnel Committee of the of of the whole, just do it so we can decide here. Its talking about whether a report was accepted or not. It doesnt change the report. Inside that, does every board member have a right to look at every other Board Members report . No you do not. No. So i think it seems like there is desire among the Board Members to have a discussion about this and my perspective is im willing to have a discussion as a board. I think that might be thenful. Ithelpful. Youre saying you wt the discussion and adoption together as one item and do it separately. Yes. Im fine with that. Is there anyone who is opposed to that . Perceives it differently . Its not going to change what were going to try to do. I agree. Okay. So there has been a motion, there has been a second, ill work with the executive director and secretary to get something done do this. As a board, can we call this item without objection . Or have a vote . We need to clarify the motion. So, i made a motion to sever the last agenda item. I think that needs to be seconded and, excuse me, to the deputy city attorney, do we need a second on anything that is severed . You need a second ne second. For roberts rule clarification. How does it work . Construct. But usually the president of the commission or board would sever the item and it will be discussed later as a separate item in the meeting. Okay. The second motion is that the Outstanding Balance of a Consent Agenda be taken Public Comment on it, we can move it forward. It means well go back into closed session when agendized which probably next month. A future meeting. So we had a motion, we had a second, do we need another second . Are we looking to me to just say move on. You could sever it, but i understand that it basically says [inaudible] the last item. Thats right. All those in favor. Okay. Then on the second one, i will work to get that agendized. Thank you. Two motions that were made. We have to vote on the second one . I dont think there is anything else. Okay. Next item. Please. Next item seven discussion item presentation and Implementation Plan. Good. In september the board approved an allocation to private debt 10 . That was in september. Eunice returned from Maternity Leave in early october. Welcome back. You came back to a lot of work. And what we want do today is walk you through ou ourImplementation Plan. Good afternoon, commissioner. As built noted, the board approved a target of 10 for the september 13th retirement board meeting. Staff have met together to construct an Implementation Plan to build towards this allocation which well provide an overview of today. In the materials provided, you can see executive summary page one. That is private credit through the fixed Income Portfolio in 2008. In 2013, the portfolio represented 387 million in asset values or 1. 7 of total assets. The opportunity has expanded significantly as a result of the increased regulation on banks following the 2008 financial crisis. A considering to the private credit industry is on tract to reach 1 trillion by 2020. And the global students will exceed 3 trillion. We do remain highly selective of opportunities. Pages two and three of the presentation discuss the benefits and challenges of private credit along with our view of the current opportunity set which were happy to discuss in more details should the board have any questions. Page four presentation and five, you can see a snapshot of the current private credit portfolio. Weve committed 1 billion across 20 funds and 19 marption. 19 managers. As of june 30th, the portfolio generated 1. 31 x and 11 exceeding the newly established benchmark and broader public credit market. The portfolio is welldiversified and from page five of the presentation, you can see that the current portfolio is tilted towards nondistress opportunities with senior debt representing the largest portion of the program. Today were focused on opportunities within specialtily finance particularly strategies that tend to be uncorps laipted to the broader market. Uncorrelated to the broader market. If you turn to page 6 of the presentation, this displays the model generated by cambridge which i will now scl to discuss in more detail. Thank you eunice. Commissioners, youve seen versions of this pacing model for bothathe private Equity Program as well as the real assets program. It is based on our tracking of the asset funds that have been performing in that we tracked through years and basically used those patterns of cash flows and nav growth and performance to inform the model. The model has a lot of assumptions. That is something that you should be aware of. In terms of how we use this model and in terms of a tool, its to help give us directional guidance. The numbers here will most assuredly be wrong in terms of the actual numbers, but directionally, they should be helpful in terms of guiding our pacing. Its also a model that we would suggest recacalibrating and looking at on an annual basis as we get Additional Information from the program. Assuming a 3 pool growth rate which is close to 23 billion, we are suggesting a fairly measured commitment pacing on schedule for the program and committing starting next year 700 to 750 million for the next several years. And to get to that 10 target in a fiveyear timeframe. Youll see it cross that 10 target in the green line there in 2022, 2023. Itwe used this exposure modelig for our clients. In the event of a dislocation in the markets, you could see the capital deployment rate pick up, but it could be slower. Turn to page 7 of the presentation. The bottom of the slide shows the expected structure. While diversifying, well look to build a portfolio for 25 active g. P. Relationships with three to five managers. The program will be filled with income generating strategies. It will include an allocation for investment. It will serve as partnership between San Francisco and a select few g. P. S. And take advantage of the public credit market. The separate accounts will be subject to permit investments. Target return also vary based on sub strategy in geography, but generally range from high singles to the mid teens in the higher i. R. And look to see our benchmark that the target a range of 8 to 12. We expect a turnover to be high given the opportunities for underlying strategies. Ive worked on San Francisco fixed income and private credit portfolio since 2013. Ill focus on the private portfolio and were recuting an analyst and focus on private credit. Well continue to work with cambridge on this program. We hired cambridge in 2013. Theyll provide the board with formal update on a portfolio on an annual basis. The cambridge teamal is the kind of existing team will be the point interface for daytoday and most of the materials and recommendations you see. Well supplement it with some specifically from our Credit Investment group and that is todd travacco that has direct underwriting experience and tap into resources within the credit group. Well also have mark and craig from the real asset team as well. The important piece here is that we try to triangulate within the cambridge platform to serve San Francisco as best as possible. Some of these strategies are different. While todd may be able to understand senior lending, he may not be able to understand other things. So we leverage the bat for plato get the best research for eunice and her team. In addition well continue to provide performance and Monitoring Services for the private credit portfolio and formally present it to the board on an annual basis. And any p. C. Who serves as Investment Consultant will be utilized on a project basis. To conclude, in summary, in order to build towards a 10 target allocation, well look to deploy 700 million to 750 million annually. Well continue to evaluate resources as we build out the program. Further more, well continue to emphasize manager selection and focus on opportunities in the market cycle. Were happy to answer any questions the board may have. Cambridge associates. Thank you. This is a regular contract with us . Or something in addition . So the current contract does include the services for the private credit portfolio. Were just not expanding it given the increase in allocation. This is the basis of a plan. We get annual plan reviews for review purposes. Yes. In terms of the plan, will it include types of investments we would not do . Let me explain. If you go to a general fund, or general partner, it may be in 10 different properties. The general partner, you may not be sable to selfselect. Dont give us that. You see in the plan a list of types of properties we would not do because it doesnt meet our values. Whethink about that so we dont decide to reject an idea that you come up with. In terms of manager emphasis, i assume that meant the managers underwriting capabilities. Right. Thats a big issue. Thank you. I have a couple of comments. One thing that i believe is important, and bill, you and i talked about this. When we evaluate investments, it shouldnt be we look at it every time and decide what it is we like about private equity in general. There should be a thesis up front that says this is what we like and this is what were looking for and these are our boxes. That goes along with the plan, right . Commissioner driscoll is big on that decisionmaking process. Good decisions, bad decision. I think it would be helpful as you lay out the plan, the attributes of what youre looking for within ach category and manager, whatever. Obviously some of them are selfexplanatory, a seasoned manager working together for ever team. But something deeper than that. Then a question, a target of fixed versus floating rate on this. I think that is important. Most of it is in floating. Most of it is. Given that while we dont anticipate huge hikes in the near future, we wil were mindff that. I think part of the plan . We dont really want to take Interest Rate risk here. So, yes, mostly floating. Libo plus say 6, 7. Thats all i have. Any other questions from the board before we call Public Comment . Seeing none, well call for Public Comment on this item. Seeing no members of the public well close pub comment. Item eight, mr. Kocher. No good month. 41 basis points. Conditioning a long winning streak that extended through the entire calendar year, youll see the returns in the narrative. By month on page one, in terms fl of an in terms of an economic update, the economy is strong. Another 275,000 proximate jobs this past month. Everything across the report looked very strong. Seeing a very just gradual increase in Interest Rates. Unemployment is coming down, wage growth is okay. Just really looks like a strike zone. I think its being accompanied not just by the growth in the united states, but improving Economic Conditions in europe and the emerging markets. I would like to take a moment to talk about item number three. That is that i see the Human Experience graduating from what was our agricultural experience before the industrial revolution, then to the were in the midst of an amazing advancement in the Human Experience. Its the science and it can revolution going on for 30 or 40 years. Youll see the advancements on page 3, the micro processor, network, internet and social media. But i think were just getting started. Its because of the infrastructure, the Building Blocks that have been put in place are going to lead to the advancements you see on page four. They touch upon everything, every part of the Human Experience from transportation, energy, food, health as ive indicated, science is increasingly close to that were going to cure hundreds of mono genetic diseases. Tremendously powerful impact for the human condition. Well be able to make food synthetically at low cost an deliver it by drone anywhere in the world also at low cost. Transportation as a service can reduce the cost of transportation by 60 while also significantly reducing traffic and fatalities and freeing up room. There are currently 700 million parking places occupied by a car and use the for more useful purposes. Im just getting started. The bottom line is i see the Human Experience graduating from the industrials to the science and technology revolution. Youll see here on page four is in the second to the last paragraph, these are Amazing Companies that are 20 years old or less. Facebook is 13 years old. Think about these things. We all have them. Theyre 10 years old. What is this . This is not just a phone, its our library, its our news, email. These kinds of things are going to begin on a greater scale across every dimension of the Human Experience. My point of all that is that because the pace of innovation is accelerating is that we need to be as dynamic an organization as the markets and opportunities are changing. Thats all on science and tech. I could talk extensively more about it, but i see amazing possibilities for the human condition. Richmont, we asked for 50 million and we got all 50 million. Ttg is a long short equity strategy. We asked for 150 million in september. We got a hundred million. Personnel, we have four recruitments going on. Several are in advanced pages. I anticipate that sometimes soon well is announcements to make. I want to add one item not on the personnel update, that is good news. Tonya is having her second born baby boy. So congratulations tonya. Well go on Maternity Leave at the end of january. Were wellpositioned for this. Obviously we have a lot of time to plan for it. And art and justin in cambridge are wellpositioned. Team meets regularly on where it focus the research etc. We can see the private equity calendar well and fortunately, given the birthing process, we have a lo long period of time. Were in good position and look forward to welcoming back tonya in the second half of 18. We have a valuable, i think, Committee Meeting next month. We have two speakers, John Goldstein from the pri that presented previously to the board as well as John Goldstein from imprint, Impact Investing firm that Goldman Sachs bought two years ago. And opmir. This is the first time weve had an entire Investment Committee dead kitted in this way and considering its the topic du jour, Board Members are in town, please make it a priority to attend. There are really cutting edge things here that could affect how we look at investments. I think that these are both presentations will be valuable to the board both in terms of the vote coming up in december as well as esg and Impact Investment going forward. I think theyll have important material. Theyre both leaders in this place. You see the monthly returns there. So far weve earned 8. 3 and outperform the Hedge Fund Index by 1. 8. With that ill turn it over to the board for questions or comments. Questions from the board . Its more of a comment. Item number search where you m number 7 where you plan on giving us updates. Commissioner, thank you very much for that leadin. I did mean to address that. To date, what weave what weve done is provided the board with regular updates in terms of private equity real assets. Id like to propose we broad than with public equity and liquid credit. That we do private equity and real assets and private return. And we do allocation, Innovative Solutions and things were looking at building. A l strategies that we s l strategies. So rather than focus our updates on the private markets is that we do it across the whole portfolio and do one asset class once a year. Id like your feedback bac backn that proposal. Thoughts and comments from the board . Ill make the comment. We always like getting more information and still keeping meeting effective. We get quarterly updates in the public area. Basically monthly reports from you that are the parallel to private equity and real estate, those are two areas that have plans. My suggestion is you please dont bring updates without a plan. Okay. Because i wont say the updates are meaningless without a plan, but thats what the board adopted recently. We need to plan. Okay. In your report, in the innovation section on page 4, particularly around a gene editing, synthetic food production, there are exciting things i would agree. What is our investment exposure to any of the new technologies . So, we would have to go through that. Identify a like to have to take a look at that and build that piece by piece and get back to you rather than answering offthecuff. What i would like to signal to the board is that, you know, Life Sciences and technology have outperformed the s p 500 by 3 plus annually over the last 10 and 15 years. I do think that this is where we want exposure. Now, its not enough to get just the theme right. I think these are winning themes. But its not enough to just get the theme right, after all, blackberry lost everything to apple. Ultimately you have to hire managers to get the selection right. This will is where we do want to have exposure. I think that, you know, the old its not the old way, but the traditional way of looking at valuation and buying cheap assets, and avoiding the expensive assets, i think what is challenging nowa now is that because there is so much rapid change in industries, every industry is being affected. Whaits making it difficult juso buy cheap assets and expect them to buy to some reversion to the means. I think that we need to be more dynamic in how we make decisions rather than just buy low and expect some sort of reversion. I think this is where we want exposure. So to answer your question, commissioner, is wherever well get our weights and try to help buput that into context. But i think we want more of it. Do we know of any specific investments in any of our other portfolios like private equity or venture . Sure. So, you know we have exposure to both gene editing and immunotherapy as well as they are an investor in a crisper company. We have a globalling equity manager who is Global Equity manager who is an investor in build your dreams, which is a prominent not automated vehicle, but electric vehicle maker in china. Theyre a leader in that space. So i need to go through this and think of these strategies vertically and think of managers horizontally and vertically and build that. My point is, whatever we have, i want us to have more of it. All right, well, i think my final question has do with healthcare and healthcare investments. There has been a lot of discussion around healthcare. What are you thinking . What are you proposing . Terms of healthcare . Is it focused around pharmaceuticals or around the biotech genetics . Biotech, immunotherapy, gene therapy, pain management, probably less in terms fl hospitals, insurance, some medical equipment. Surgical equipment is an exciting place to be. But probably on the margin, less medical equipment, but some. Less hospitals, less insurance, more bu biologics. How are you evaluating the science and the technology as it relates to being a solid investment . How do you i guess youre noo a crystal ball. Are you reading broadly and take into account what other smart people are thinking . Yeah. So my father was a doctor. I grew up in a medical community. Him, his friends, my mother worked for my father, my sister worked for a large hospital as their Business Manager for 15 years. So i grew up around the whole space. Id say i probably didnt take my own personal interest in it until about 1993, and it was sparked by a front page article in the wall street journal that said medical science thought they were on the vrnlg of a verge on a major advance in life expectancy. People would go from living 7 o year7 70 years to 110. Then the birth of the internet came and made learning that much more easy. And then through thinking about my approach to investing is to think about who is going to be the leaders in how business is going to be done . How is business going to be done in the future and who are going to be the leaders in those industries . Industries . My last question is focused around the cannabis industry. There is a lot of discussion in the state all year. Certainly in the city and county of San Francisco. As we get ready to issue permits for adult consumption of cannabis. Im wondering if usual seeing in future investment vehicles that are looking to tap to capitalize in cannabis. Its expected to be a 20 billion industry by 2021. What are you seeing in the markets . We dont get weve invested in life science managers who will invest in cannabis. For example rock springs which was approved by the board. They are an investor in twph pharmaceuticals. But broadly speaking is we hire life science specialists and they determine where in the whole b biologic space where it make investments. We have one through gwp pharma. I have no further questions. Any questions or comments from the board . Seeing none well open it up to Public Comment. Any members of the public that would like to address the commission . Good afternoon, im representing re ccsf. Three concerns that we have at least from our members when you talk about real estate, were still wondering where that City Building is coming that will be the home for Retirement Health service and other city departments so were looking to see those local investments in local real estate that will benefit us all. The last couple of months we talked about private equity and Investment Policies and transparency. As i recall, the policies, the investment policy the board has adopted pertain only to the pug lick investments . And wed like to see those policies and say apply to your private Equity Investments because this where youre investing and whether its fossil fuels or any of the other kinds of areas that have been previously banned from public investing, i think it sets us up as hypocrites to totally invest in one size in those things you previously decided are not part of your public Investment Policies. Last thing is the transparency. Wed like to see Greater Transparency in all the things you invest in. Lots of money in drugs and pharmaceuticals. Big issue issues with regard to opiates and even here in our on populations in the city. Wed like to see very much transparency with regard to how you go forward. 30 seconds. Especially the building. Im going to bring it up at every meeting. Thank you. When it comes to real estate, is there any reason why you cant buy your own Office Building . You could have bought this 50 years ago for 10 of what its worth now. I recommend you buy your own Office Building and lease it out to all city agencies and mr. Hirsch, all the office space you require. Thank you, any other members of the public that would like to address taddress the commission . Seeing none, well close Public Comments. Mr. Kocher, next item. Item nine, preferred compensation manager report. Thank you commissioners. So before you, actually, are the results for the most recent seminar that we had hosted for sf participants. Were really, really heartened by the excellent results. You can see on the very second slide there, the results of the pilot as well as the results of the most recent one that we had in october. So you can see from a larger Marketing Campaign and greater outreach, the number of prospects have increased compared to the pilot in june to the number of prospects that rsvped in october. The attendance increased by 10 . The number of walkins have increased and survey respondents increased. I want to thank mr. Driscoll for coming to the seminar. I believe he was able o witness this wonderful event on slide three, you can see a picture that we took and it was basically filled to the brim. We had to line up chairs around the perimeter to accommodate the additional walkins. Everyone got a seat and a packet. The results were good. Its important to track how were doing and know what our participants and prospects are thinking and to continue to use the feedback to get better and better. We pull together a survey. You can see the results there on slide four. And we wanted to make sure we captured the comments. That is what i think is important to us. Weve pulled some of the comments here on slide five and six, you can see that overall, it was a very, very suckful event. People were asking when is the next one going it take place. You know, how can i learn more . Can you make these presentations longer . So, weve been heartened by this wonderful response to this outreach. And were happy to share that with the board. Id like to open to any questions you may have. Questions from the commission . Comments . The committee will review some of the stuff to help the range of issues. But in this area of helping our staff and the credentialled personnel refine their messages to the better target groups. You can see the different people in the room have different focuses. With that information, then it will help give better, more useful messages of the people. Some people want it, some dont. Its a wide spectrum based on age and retirement that affects what theyre trying to do. That information our manager with her marketing background, may help achieve the goal and help City Employees prepare for retirement. Good job. Thank you. Is there murker mor more to r presentation . That was the seminar then we have the board meetings. Were at 3. 3 billion. From a loan perspective, we have 1700 outlanding loans and no defaults. 1700. 1700 on slide seven. There is a detailed to the program for your reference. We received very good feedback, people are happy to have this opportunity and you know, considering the fact that people are taking loans, the contributions are coming in because of the reparamounts and because of our efforts with outreach. We feel the plan is in good place right now. The crediting rate for the Stable Value Fund is 1. 87 for the fourth quarter. For the loans. Sorry its usually prime plus 1. Sol i think its about maybe 4point a. 4. 5 . Thats interest they pay back to themselves. Thank you for the report. Well open it up to Public Comment. Any members of the public that would like it address the commission on this item . Seeing none, well close Public Comments. Thank you. Could i ask one followup. Prime plus one and they pay it to themselves . Yes. Do you know if they are rae able to write it off . I dont think so. The income of it. The payment of it. Thank you. Can we work on that . Secretary, next item. Next item, item 10 assumption review and economic assumptions for july 2017. Evaluation. Good evening, commissioners. This is our annual economic assumptions review and kiern is here to do the presentation. Weve had a lot of changes in the past year, for example, we completed our asset liability modeling study and we had the board adopt a new asset allocation. Weve heard the Implementation Plan for your absolute return and Implementation Plan for private credit. There has been changes in the public plan landscape. And i think bill is set now to tell you all about that. I think i can speak for the board on this one. I dont think that the board needs a refresher on why our economic consumptions. But the board is more interested in any changes that might have resulted because of the last 12 months of asset allocations and or things like that. I dont think we need to talk about 7point a or the inflation or any of that. 7. 5 or inflation or any of that. You want to just go to the recommendations . Recommendations, and well were looking at three different assumptions. Price, wage, and discount rate based on the expected return on assets. They are i think, im sorry. Is this appearing on your screen . No its not. When i said what were looking for, does that make sense . We dont need to go over the entire packet. We want to know what are the changes. Thank you. Okay. So testimony got up hopefully on your screen slide four. Is it showing . So we have the current assumptions