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speak during the public comment period are available by phone by calling 415-655-0001 . access code 2493 585 6486 10 pounds and pound again. when connection connected you will hear the meeting. when your item of interest comes up press star 3. best practices are to call from a quiet location, speak clearly and slowly and turn down your tv or radio. city policy along with law prohibit discriminatory or harassing conduct against the employees and other public meetingswill not be tolerated. moreover public comment is permitted only on matters within the jurisdiction of this meeting body .thank you for joining us. president safai. >> do we have to take public comment on that? we will take in person public comment first andopen the phone lines for colors. please call the first speaker . >> president safai we have no interest inpublic comment at this time . >> secretary please open the phone lines for publiccomment colors . >> colors if youhave not alreadydone so press star 3 to be added to the queue . moderator do we have any colors ? >> madam secretary there are n callers on the line . >> publiccomment is now closed. president safai . >> please call the next item. >> item3, action item . review of an approval of me 2022 resolution to continue to meet in person with some members possibly attending remotely for at least 30days pursuant to california government code section 549358 . >> is that it okay. i need a motion to adopt this resolution . made by commissioner thomas, seconded by commissioner driscoll. we will open the phone lines for public comment colors. >> we have no in person public comment at this ,time. if you have not already done so please press star 3 to be added to the queue. moderator are there any colors? >> madam secretary there areno callers on the line. >> .no calls a comment is now closed . >> public comment is closed at this time. a motion has cbeen made by commissioner isthomas, seconded by commissioner driscoll. please call the role . >> commissioner bridges. [roll call vote] >>. [roll callvote] we have 6 aye's, motion passes . >> please call thenext item. >> item ed4, closed session .i believe commissioner driscoll isoff-camera . >> right. thank you. madam secretary. >> item number crfour, closed session . >> at this time the lord will move into closed session for item 4. before we move into closed session we will take in person public comment first and open the phone lines for public comment colors. madam secretary please call the first speaker. you are on mute. >> we have no in personpublic comment atthis time. mitered callers to press star 3 to be added to the queue . dowe have any colors ? >> there are no callers online . >> public comment is now closed. president >> commissioner bridges. >> present. >> commissioner driscoll. >> commissioner gandhi? >> present. >> commissioner heldfond? >> present. >> commission safai hasn't arrived yet. >> he'll be back. >> commissioner thomas? >> thank you. >> we have a quorum. >> great. thank you. i will accept a motion to disclose, rather to disclose discussions in the closed session 67.12a. >> so moved. >> second? there's no second, thank you. >> it has been moved by commissioner driscoll and seconded to not disclose. roll call vote, please. >> public comment first. >> right. >> in-person public comment and call in. >> thank you. no in-person comment at this time. and we minder to any callers, police star three to be added to the queue. moderators, any callers on the line. >> madam correct, there are no callers on the line. >> thank you, hearing no calls, public comment is closed. commissioner heldfond >> okay. do a roll call vote, please. >> commissioner bridges? >> aye. >> commissioner driscoll? >> aye. >> commissioner gandhi? >> aye. >> commissioner heldfond? >> aye. >> commissioner thomas? >> aye. >> we have fivies and motion passes. >> great -- we have five ayes. >> next item. >> general public comment. >> commissioners, was have received an e-mail -- we have received an e-mail from john and i'll read it into the record as follows. now that you have a new chief investment officer, i hope she divest from hedge funds and you have our pension fund over diversified in high risk investments. in the past few months, i recommended that you sell off your bad investments and raise cash before we have the big crash. and as usual, you did not follow my recommendation. we'll have a big crash and another 30% on the downside to go. your high risk and best regards from john, a 38-year member of sers. >> thank you. we'll take public, in-person public comment for this and open the phone line for callers, madam secretary, call the first speaker. >> thank you. we have no in-person public comment at this time. callers, please press star three to be added to the queue. moderators, are there callers? >> madam correct, there are no callers on the line. >> thank you. hearing no calls, public comment is closed. commissioner. >> call the next item, please. >> item no. 6, action item. approval of the minutes of the april 14, 2022, retirement board meeting. >> is there a motion or comment? >> commissioner heldfond i move we adopt the minutes from the previous meeting. >> second. >> okay. madam secretary, we'll take in-person public comment first and then we'll open the phone line for callers. >> thank you. we have no in-person public comment at this time. reminder to callers to press star three to be added to the queue. moderators, do we have callers? >> madam secretary, there are no callers on the line. >> thank you. hearing no calls, public comment is closed. >> thank you. motion has been made by commissioner bridges and seconded by commissioner thomas to approve the minutes. roll call vote, please. >> commissioner bridges? >> aye. >> commissioner driscoll? >> aye. >> commissioner gandhi? >> aye. >> commissioner heldfond? >> aye. >> commissioner thomas? >> aye. >> thank you. we have five ayes and motion passes. >> next item, please. >> time number 7, action time. consent calendar. >> commissioner held, i make a motion to approve the calendar. >> thank you. is there a second? okay. motion has been made by commissioner bridges and seconded by commissioner thomas. we'll take in-person public comment first and then open the phone lines for callers. madam secretary. >> thank you. we have no in-person public comment at this time. callers press star three to be added to the queue. moderator, are there callers? >> madam secretary, there are no callers on the line. >> thank you. hearing no calls, public comment is now closed. >> roll call vote, please. >> commissioner bridge. >> >> aye. >> commissioner driscoll? >> aye. >> commissioner gandhi? >> aye. >> commissioner heldfond? >> aye. >> and commissioner thomas? >> aye. >> thank you. we have five ayes and motion passes. >> great. call the next item, please. >> item no. 8, action item. approval of the recommended guideline changes for portfolio associates, cash security skeletonization rebalancing and overlay services. >> commissioners, as many of you know, we had a relationship with the para metric since 2017. they provide pers with synthetic exposure to fixed income and equity markets either in the form of cash securitization meaning we take our existing cash and we ex what ties it and get it into public equity or provide us exposure, cash funded exposure for rebalancing in fixed income and public equity and as a means for spers to leverage our portfolio. when the relationship began in 2017, implemented in 2018, para metric used futures and in november of 2020 in conjunction with the board's approval of a planned wide leverage, the staff represented and the board approve para metrics to include total return swaps options and forwards. today, we are recommending a further expansion of their tool set to include repurchase agreement and reverse purchase agreement. with that, i'll hand it over to anna to describe everything in further detail. >> thank you, kirk. good morning, commissioners. staff is recommending two amendments to existing investment guidelines with para metrics associates. first, we recommend extending the provided services to include total portfolio leverage implementation and secondly, we recommend adding repurchase agreement and reverse purchase agreement through the list of eligible instruments per metric can trade. first leverage, as kirk mentioned, at the november 2020 meeting, the board adopted new that strategic the ethic policy. staff can collaborated to a search project and reviewing the landscape of firms offering leverage services and staff and the atc compiled a request for inform, rfi, questionnaire with over one hundred questions on topics including the firms strategy, investment team, performance and cost. staff spoke with adc and peer institution to identify the firm who's are capable in providing services and created list of candidates. the rfi questionnaire was ultimately sent to 8 firms and all of them, each of which responded within 30 days and atc reviewed and scored the submission from the responses. firms were scored across the polling dimension and people, processes, risk, performance, organization, in linement of interest and (indiscernible). score were compiled among staff and atc and three firm were selected as finalist for diligence. staff conducted additional reference calls of clients of each three firms and ultimately selected para metrics on the basis of the deep and experienced team, their dynamic allocation process, strong risk management and reporting and historical tracking arrow and organizational strength and competitive deed proposal. as a result of the search and comprehensive search, staff recommends expanding the services provided by para metric to include leverage implementation. secondly, i'd like to talk about the repurchase agreement. mentioned successful implementation plan for portfolio leverage. it's efficiently and it has returned of financial (indiscernible). leverage is the first allocation to the u.s. treasury is the most effective option. and it is also providing the -- it's providing the view that we will, do not expect off of from u.s. treasurirys -- u.s. treasury so we'll have higher up (indiscernible) classes. in reviewing the vr5 and the ability to implement leverage, we concentrated to replicate tightly u.s. treasury index performance. and the suite tool to do that includes to be main products. treasury futures, total return slot, either on the index or in particular, in particular a bond and repurchase agreement. on staff memo, it would provide the trade-off among the three approaches. to date, para metric deployed futures and total return swabs. and we did mention there are times when achieving leverage through -- through the purchase agreement and reverse purchase agreement is desirable from financing course from expected performance and tide tracking of the index and spurs will work with para metric to look at the financial -- construct low cost and low tracking arrow solution. while also balancing out county party risk and observational risk. the mechanics of the repurchase agreements and reverse purchasing agreement are described in detail in staff memo. what i'd like to do is to thank the office office of city -- city attorney who helped us to enable spurs to transact using total return swab and repurchase agreement. in conclusion, we ask the board to approve the para metric for portfolio leverage and have the purchase agreement and repurchase agreement so the para metric can trade. i'll open up for questions and alan martin from atc is available for questions. >> commissioners, any questions of anna and her team or alan? and npc. >> i have a couple of questions. i'll start at the bottom. in materials of para metrics performance skill dealing with repos and reverse repos, you've received data improved from them that they're good at it some >> that's correct. we conducted multiple references with firms who employ para metric in that regard. >> okay. then, we go to page three. >> so, we have at least one client using para metric in a similar circumstance to use, so we've had direct evidence of watching their ability to do it and we're quite supported. >> okay. that's the easy part. on page three, you had the two exhibits, two and three showing their performance for us in both the, in the cash overlay. i'm not sure the difference, i know the difference between exhibits two and three. one is focused on the public equity. well, exhibit 4 is involved too. these numbers here, the negative numbers, if we're -- the comparisons if we didn't do it, we would be at zero return on our cash or these negative number was relative to the benchmark or did they under perform at zero cash? if that's not clear, i'll try to restate it but that's the best i can do at the moment. i'm trying to find out if this program if i'm all for if it's adding value or not and the last couple of years have been difficult. >> the last years were difficult and that's where you see the negative performance. so, you will see the -- you have to look at the benchmark performance, right on exhibit and the benchmark for exhibit 3 is the total overlay which is the bland 68% equity or equity benchmark which is the (indiscernible) and 32%, basic income benchmark which is here, u.s. treasury. so, that bland, especially the last years, that benchmark has been challenged so if the benchmark is negative, that means we're overlaying over the performance that has been negative. if it's positive, it means we're adding value. so, you need to lock at the benchmark performance and now, what i would say is that overall for the long-term, we expect positive return from 6832 to blanded portfolio. that's been case in 2019. but 2018 when we started in march, it was -- in may, it was higher equity and 2021 were challenging. i would say it's kind of, at this point, it's almost neutral. it's not adding that much on the total. we were beneficial, if you see on exhibit 2, it added a little bit on the kind of the difference but quite substantially on the equity side because we added -- moved it in 2020 and moved it in the beginning of 2022. it's negative because the bond performance has been challenged. >> so in other words, the performance here is reflective of the market. it's not -- it's not the tracking error or the difference, it's supportive of para metric and those executed. commissioner driscoll, when we he can kwa ties cash, we take risk and it's bourne out. we have been in the fixed income market and equity market. i wouldn't draw conclusions about the success of the program over a short period but para medics execution of it has been really good. >> i'm very aware of the issue of sequence of return, so maybe we didn't get off on the right foot, otherwise, i wouldn't have supported this to begin with as part one. two, as part of exhibits two and three, are they totally groups of money or is there an overlap in there? >> you need to look at the 8 performance. there's overlap because the way it was (indiscernible), for -- to run the attribution, we would like the equity budget. so you could think about it but yes, the overlay is the total achievement. starting, so the overlap is until the end lot fiscal year and starting this fiscal year. we just -- we added the overlay, the total cash overlay and tracked the equity -- >> exhibit 2 may be a combination of three and four if we had the dollar amounts combined? >> we can probably put it in the dollar amount. >> okay. the quarterly report that any pc prepares for us where there is the line, let's say, total performance, total overlay, total equity and total equity with overlay and the difference in the dollar actions is the notion amount, is that notional amount the return on the notional amount, is that what is reflected in the exhibits two, three, and four in your recommendation? >> that's the return on the notional but the para metric is replicated. you're correct. >> the decision to invest the cash in equity, the timing of that, is that basically para medics or they need -- para metrics or they need guidance. >> it's based on our rebalancing needs. >> it's based on numbers, okay. >> obviously if we think equity is supposed to outperform cash over long-term and sometimes it doesn't. we're taking that risk and taking that capture? >> right. but we have zero cash allocation in our policy portfolio, so in a way, when we maximize, when we use that, we minimize the risk verses or policy. >> yes. i'm very aware of that. we have a three percent of return for cash which goes into the asset allocation and the return we're using. and a lot of variables you monitor for us. i'm making sure the risk we're taking on earning so many basis points by advertising the cash as well as rebalancing in the fix as well as the equity portfolio when we're out of balance is -- it's not a touch of aggressiveness, but doing it to earn more return. delegating to you and the investment staff and para metric, it's too early to tell how well the program is or isn't working but we shouldn't stop. thank you. >> i'm not, i can't resist the humor here. hopefully, it's not para medic, para metric. okay. any further questions of anna? >> scott, can i just adhere. all leverage, is you're borrowing at a low rate and investing in your total portfolio or significant portion of your portfolio, it's that simple. to be successful, you need to borrow at the lowest rate possible and that's what this is all about to make sure that para metric has the maximum tools to do that and then you invest in something that has a high spread, so we're totally supportive of this. we've seen others do it. not a lot are doing this because it's innovative but this makes a lot of sense for your portfolio. >> i appreciate the comment. commissioners, we -- a -- are we at a point for a motion? >> move to adopt staff's recommendation to expand the securities that para metric may invest in for the cash overlay program. >> second. >> moved by commissioner driscoll and second by, who did -- >> thomas, by commissioner thomas. >> and we'll take public comment first in-person and phone in. madam secretary. >> thank you. we have no in-person public comment at this time. a reminder to callers to press three to be added to the queue. moderator, do we have callers on the line? >> madam secretary, there are no callers on the line. >> thank you much hearing no calls, public comment is now closed. mr. heldfond. >> okay. i'm going to actually keep -- what we're doing, just for the record, it has been moved and seconded and moved by commissioner driscoll and seconded by commissioner thomas to approve the recommended changes to investment tag line was parametric portfolio associates for cash securitization rebalancing and leverage overlay services to exhibit b-statement of objectives, the guidelines are subject to further legal review. madam secretary, roll call vote, please. >> thank you. commissioner bridge. >> >> aye. >> commissioner driscoll? >> aye. >> commissioner gandhi? >> aye. >> commissioner heldfond? >> aye. >> commissioner thomas? >> aye. >> thank you. we have five ayes. motion passes. mr. heldfond? >> okay. commissioners, what's your pleasure? do you want to take a brief lunch break now or keep going sort of -- >> i don't mind going through but i'll see what others want to do. >> do you want to do a couple of more items? it's 11:30. >> i prefer to go until 12 and lunch -- >> 12, all right. great. maybe commissioner safai can do this. all right. madam secretary, we're ready to call item no. 10. >> the next item is item no. 9. >> oh, it is. >> action item. recommendation to change sfers liquid benchmark. >> commissioners, last month, invest the committee meet when we went through the updates for public equity and return and fixed income and during fixed income review, we reviewed a proposed change which is change the benchmark for the liquid portion of our fixed credit portfolio. as described and anna will describe in a moment, liquid portfolio had two mandates and one is balance the liquidity but earn yield. the benchmark to which we measure performance today is inconsistent with the two objectives and 40% of the benchmark would be, the u.s. ag is comprised of treasury, so it ignores the yield. we're recommending a blended benchmark we believe is consistent with the objectives of the liquid credit portfolio. >> alan. >> good morning, board members. thank you, kirk. we're recommending a change in the benchmark for the liquid portfolio to an equally blend. the are corporate bond index and the bloomberg corporate index and jp more began and gobble diversified index -- global diversified index this. was reviewed and discussed with the investment committee during the update at last month's ic meeting. the existing benchmark for liquid credit, the bloomberg, u.s. aggregate index is not an appropriate benchmark because it has grade bonds and tracks a narrow subset of fixed income sectors. this introduces a high degree of tracking error and low correlation verses the liquid credit portfolio. the liquid portfolio for the investment policy has a mandate of seeking liquidity and yield. and the underlining managers in the portfolio reflect that mandate with sector allocations across liquid fixed income spectrums including higher bonds and emerging debt and so on. no benchmark is perfect and the designing the benchmark, we had a trade-off twin simplicity and precision. we worked closely to choose three industries we're proposing today. however, we expect our managers to invest in sectors beyond just these three sectors. just quickly, i wanted to point out a typo on exhibit 4 where we show the -- the headers were switched and the recommended ben. mark has the higher expect of return and volatility. i'll pause here and take questions from the board. >> board members, do any of you have questions? >> i have questions. >> we have a quorum, we're okay. >> okay. thanks for recommending a change in the benchmark that matches what we're trying to achieve with this liquid portfolio. it's going to be a series of questions. my understanding now is that which will be approximately ten managers in the liquid portfolio that you, i guess perhaps you particularly alan, but with your colleagues helping you, may decide to move money amongst the managers for the purposes of increasing the performance or yield or other portfolio improvements. i'll start by saying, i assume that's true. >> that is true. >> thank you. okay. each ten managers based on your work with them, they a greet to perform action objectives and stated in the investment guidelines which are customized for each manager, correct? the benchmark for the manager is not changing. >> that's correct. >> good. in the aggregate, the liquid portfolio you're responsible for, is this new benchmark the 1/3, 1/3, 1/3 benchmark, is it fair to then monitor your performance with the liquid portfolio against that benchmark >> yes, that's -- the board will share the evaluation of the liquid portfolio as a whole. and how i'll review and judge alan's performance when we review, that's the benchmark which we'll review it. >> okay. thank you. i wanted to make sure the board members understand why massing -- that's an active decision that alo gets to make? >> that's correct. >> that's great. that opportunity, we not just like him but trust him to make a few more points but we need a measurement, and see how the program works over obviously a complete cycle. so i appreciate you having the guts to do it. >> one additional comment there, what we've come to is the best way for us to achieve those objectives. it's not necessarily for alo to make the decisions when to lean in and lean out of those various sectors. but higher the likes of lumus to make the decisions and the core of the credit portfolio is -- not that i don't trust alo's judgment but we think the managers are closer to make the decisions and closer to the markets. >> i would agree. perhaps when someone were to -- maybe alo martin does it or an army of college grads to do that level of analysis, every point can be justified who did what but the fact is that hiring the best people is always, you might say the first step, hiring the best manager which goes back to the selections and it's very important but again if alo has the discretion and the authority to do it, let's make sure we know what we're going to measure it against so we can attribute if that decision is well placed or not and that's why i asked the question and how we're going to measure it, thank you. i have one sort of underlining question of this whole thing. the other, the u.s. treasury portfolio has a u.s. treasury type benchmark, correct? >> correct. >> and they're the only manager that, i think it's blackrock, they're the only managers with such a benchmark which is the lowest possible benchmarks, meaning u.s. treasurys? >> that's correct. we have mandate which blackrock oversees and it's an implement strategy. >> that benchmark shouldn't be claimed by any other manager in the benchmark or to satisfy our needs? >> no. the treasury have a very specific role in our portfolio, so for another manager to claim that treasury at the benchmark, one, they would have to trade treasuries and that limits your risk to just duration risk. managing up and down curve, not taking any spread risk, no credit risk and credit risk exist in mortgage and corporate bonds so that manager would be no credit risk. and have to maintain a liquidity profile commissariat with treasury. bottom line, it needs to be a treasury strategy to have -- >> noun of the portfolio manager were hired to be the u.s treasury? that's not incorrect objective? >> correct. >> thank you. that concludes my questions. >> any other questions from the commissioners? hearing none. accept a motion -- >> scott, can i add in view of the early discussions, the bloomberg ag over last year through april 30th, this is where most people put most of their fixed income money is down 9.6 percent. you, three years ago, decided not to do that and to reduce that bloomberg ag component by putting ten percent targeted to private debt and 8% to treasuries, as kurt said for a specific purpose and you have five percent left in this buck and to make this bucket work harder, you have heard the strategy. this is in the context. when you hear your performance and hear people that have 60% of their money in equities, bonds and stocks lost money in the last little while and you didn't. so this is a huge strategic movement on your part. you should be commended for it. >> thank you. >> well, we've lost less, so i'll comment on that in the next item. >> by percentages though, kurt. >> if i could just add quickly to very thoughtful questions from commissioner driscoll, what alo just said and our strategic allocation, the fixed income allocation is ball bell. just treasuries and we actually do not invest in long-term please treasuries and it's intermedia and it's five and six and liquid credit and liquid credit is where we would like to take credit risk and that's why we'd like to specifically align the benchmark to take that risk and be aligned with the risk in return assumptions that are, that alo and apc and myself, whether we run our allocation review, expect from the liquid credit bucket. so this proposal aligns the allocation and the management of the liquid credit that alo and the team performed. >> okay. great. thanks, anna. any further comments? if not, you want me -- i'll note that commissioner, president safai has arrived. and i'll just carry this through the final vote and commissioners, could we have a motion, please? >> move to adopt the recommendation to change the benchmark for the sfers liquid credit portfolio. >> second. >> noting that staff has now additional discretion regarding the operation of that liquid credit portfolio. >> okay. it has been moved by commissioner driscoll and seconded by commissioner thomas. madam secretary, in-person and dial in public comment. >> thank you. we have no in-person public comment at this time. reminder to any callers to press star three to be added to the queue. moderator, do we have callers? >> madam secretary, there are no callers on the line. >> thank you. hearing no calls, public comment is now closed. also for clarity sake, could we have that second after the motion was made because i think it came in middle of it? >> motion, the second came in right after the motion. >> it came in mid-motion. >> i can restate it. i did say it with a pause between the normal statement about accepting staff recommendation but maybe i should have stated it as an amended motion. couldn't be amended if it was the original motion but the inclusion of the understanding of what staff is able to do with the liquid portfolio is what i wanted to capture because i do not believe that was understood before. >> yes, with the amended motion, maybe we can get a second to that. >> second. >> okay. >> thank you. >> madam secretary, roll call please. >> yes, commissioner bridges? >> aye. >> commissioner driscoll? >> aye. >> commissioner gandhi? >> aye. >> commissioner heldfond? >> aye. >> president safai? commissioner thomas? >> aye. >> thank you. we have six ayes and motion passes. >> thank you. commissioner, president safai, i'll turn it over to you for item ten which i'm going to present. >> please. okay. presentation by commissioner heldfond on item no. ten. >> time number 10, discussion item. investment committee report. >> on november 17th, we had our investment committee and kurt and his team presented an overview of three of our asset costs, fixed income, public equity, and absolute return portfolio in each of the leaders of the portfolio presented. and i thanked them for all the good work and look forward to other reports. so, that concludes the report. >> okay. thank you, commissioner heldfond. any questions from commissioners? comments? right now, then, we'll take in-person public comment first and open up the phone lines for public comment callers. madam secretary, call the first speaker. >> thank you. no in-person callers at the time. press star three to be added to the queue. hold rater, do we have callers. >> no callers on the line. >> thank you. hearing no calls, public comment is closed.. >> great, thank you, madam secretary. public comment is closed. madam secretary, please call the next item. >> thank you. item no. 11 discussion item. chief invest. officer report. >> commissioners, this was alluded to in the past couple of presentation but it was a difficult start to the year as alan martin noted both stocks and bond was down for the year for a have variety of reasons from the war and covid and lockdown in china. the central banks and federal reserve is raising rates when growth is slowing. in april, growth in the u.s. contracted by 1.4% while inflation was measured at eight and a half percent. the first sell off in the first three months of the year continued with eight percent in equity markets and something a little less than four percent in the fixed income markets. alo noted this, but we have far less than most plans in the long only public equity and public and public fixed income markets. as a consequence, our plan was down 2.94% in the month, but we had a couple of several classes that produced modest returns ever one percent, including, sorry, apps of private credit and private equity role up during the month. for the year, this is the worst starts to a calendar year for public fixed income and public equity market. and public equity regardless of your flavor being u.s. or merging markets somewhere between down around 12 to 13%, and as alo noted, bond was down nine and a-percent for the year. for the calendar year, sfers has lost about six percent of our value and again, we have less in public equity and less in public fixed income than most plans. real assets has 5.93 and 2.82% for the year and private equity in absolute return are down modestly for the year. in fact, i'll highlight absolute return for being flat for the year. this is a good outcome for that portfolio and it's a consequence to the changes that were described at last month's invest the committee meeting. having a flat return and down market like this is what we hoped for that portfolio back in march of 2020 so we've done well, i think to reshape that portfolio. for context and alo referenced this, again for the year, sfers is down six percent for the year.60/40 portfolio, 60% equity and 40% stock down 12 and a half percent for the year relative to our 6%. and at 60/30 hypothetical portfolio and ten is real-estate it will be down ten percent for the year. i've mentioned this early on in the sell off that keys for our success through a volatile period like this is remain and continue to have long-term view, maintain a diversified portfolio and maintain adequate liquidity which we have done and added select live into certain dislocated markets which sold off but we have long-term positive secular view. assets at the end of the month were 34.4 bl billion. i have four investments and two were distributed to board members which i'll do orally. april 14, 2020, the retirement board approved this closed session an investment of up to 75 million. sfers of $75 million closed. this is a specialty invest within sfers credit portfolio. this is first private credit, third investment and sfers seven the investment with orbit med. 2020, the retirement board approved $52 million in international gpe limited partnership and $52 million to admin closed april 8th, to 20. admin international is classified as a make up investment which sfers equity portfolio and six commitment to admin -- april 14, 2022, there was an investment up to 7%. sfers invest of the $7 million closed february 29, 2022, and this is capital investment within sfers private equity portfolio. finally at its meeting april 14, 2022, the retirement board approved $75 million investment for industrial value fund 7. sfers commitment of $15 million closed may 6, 2022, and commitment is classified as a real-estate investment within the real asset portfolio and sfers forth investment. quickly turning to personnel, i noted this last month but i'll describe it many writing, we're pleased to announce that chris jointed us with unique combination of public plan. consultant and asset manager experience. and chris joins us remotely doing a trip in boston as he introduced himself to several managers and finally, i didn't note this in the material but it's worth highlighting now and i'll continue to do to in the next few cio reports. our next invest. committee meeting is scheduled for wednesday, july 20th at which we will do asset class updates for private portfolios, private portfolios and real asset and real-estate. that's all i have, thank you. >> great. thank you, kurt. i guess, now we'll take in-person public comment and then we can open the phone lines for public comment callers, madam secretary, please call the first caller or first public commenter. >> thank you. we have no in-person public comment at this time. a reminder to callers to press star three to be added to the queue. moderator, do we have any callers? >> madam secretary, there are no callers on the line. >> thank you. hearing no calls, public comment is now closed. >> public comment is closed. madam secretary, we'll take a short recess to have lunch. we'll resume at 12:30. >> thank you, commissioner bridges? we're doing roll. >> thank you. >> let me get my video on. >> thank you as well. commissioner driscoll? >> present. >> commissioner gandhi? >> present. >> commissioner heldfond? >> present. >> president safai? >> safai, present. >> and commissioner thomas? >> present. >> thank you, we have a quorum. >> great. madam secretary, please call the next item. >> item no. 12, discussion item, san francisco deferred compensation plan, quarterly report. q1 '22. >> great. >> thank you. can you hear me okay? >> yes. >> excellent. thank you so much. well, good afternoon, commissioners, thank you so much for your time today. i will be providing a quarterly report that covers the four pillars of the plan which are investment, marketing, operations and the record keeper. quarterly report include both the look back at the prior quarter as well as what's next for the deferred compensation plan. up first is investments. as reported last month, stable value crediting rate increased to 1.70%. and guaranteed for the quarter. this crediting rate is correlate with interest rates and as you have been following, the set has been increasing rates to offset inflation. recently, the set raise benchmark by half a percentage point which is the highest increase it has made in over 20 years. further, federal reserve chairman, jerome noted they're considering two more additional half point increases in the future. we'll continue to monitor unstable value and report out to the board. we've made some recent updates to the stable value competing fund definition. by removing the self-directed brokerage as a competing option. since the risk of participants of using this is low. this is lower risk which result in cheaper pricing. we have been working on the targeted fund rfp can our investment consultant and presenting the draft to the compensation committee later this month. our consultant calin is online and available to answer questions the board may have regarding the plans invests. recent quarterly performance can be found on page ten in the pdf of the dc materials. are there questions? any questions, commissioners? >> nope. >> thank you. moving on to marketing. the popular woman and retirement planning seminar which was initially suggested by commissioner driscoll is available on demand and can be accessed at any time on s fpc dot org. this webinar covers the unique challenges that women face in retirement planning such as longer life expectancy and wage gaps and provide step to navigate the obstacles and it has received positive feedback from attendees and we encourage participants and perspective to have a look at s fpc dot org. moving on, many departments have been closed to the public during the pandemic. including the sfers pension site. this is slowly changing, the number of departments opening doors has been incremental. as such we're not getting that departmental cross traffic and the plan must look at other ways to increase participation and encourage enrollment. one of the ways is my reaching out to those who haven't finished the enrollment process. we know this by offering online enrollment to allow prospects to enroll anytime and any place and the data allows us to track progress and follow up as needed. our pilot outreach started last quarter and during that time period, counselors were able to help complete enrollment for 20% of those employees who started to apply. moving on to the third pillar, operations. as noted last month, we have launched new rmb features and resources and it stands for requirement distribution and that includes those over 72 and above. we launched a newly retirement page and transaction interface to allow those participants to schedule their rmd's on an annual semi annually or quarterly or monthly basis. in addition, as ruled by the dol, paper notification of defaulting to e-mail communications were sent to all participants late february. these are participants with an e-mail with the record keeper and the first notification of statement availability online was sent in april. and then finally, the staff been returning to the office twice a week since march. we continue to see demand for in-person services and counseling. prospects and participants can make an appointment through our online scheduler shown in the memo and as of last month, as approved by the retirement board, the plan will be reducing their plan administrative expenses effective june 30th of this year. a direct mail announcement will be sent to all participants in june and participants should see a decrease in their admin fee beginning with the second quarter statement which is mailed in july. and finally, we have some record keeper highlights. royal introduced a new chat feature also known as pallor personal assistant liaison to assist with easy to answer questions online and also to provide background to the call center rep if the chat needs to be escalated to a live person. in addition, roy launched a voice technology as an alternate method to confirm identity much this is helpful for those who forget their pin. i have one announcement that's not covered in this membery and that's the retirement of our long time retirement counselor, mr. joe collins. many of you know about his tireless dedication to his participants and his willingness to pick up the phone or return calls day or night. he took great pride in servicing the police department and would be up for a line up. he serviced the airport and found any hour of the day meeting employees during their shift breaks. what you may not know is he's been serving the city and county of san francisco deferred compensation plan for nearly 15 years which made him eligible for pension benefits if he was a city employee. we are grateful that joe delayed his retirement until we found his replacement. mr. michael wade. and he starts next monday. joe's last day of work is tomorrow and we will miss his terribly. we all wish him the best of luck in retirement. at this point, i will turn it over to bryan merit from voya who will do a deeper dive on the planned metrics and money movement and inclined engagement over the last -- quarter and we can keep this to ten minutes if that's the board's pleasure. president safai, how would you like to proceed? >> repeat what you said? yeah, let's do it as quickly as possible. >> all right. thank you. mr. merit, share your screen and keep your presentation to five minutes, that would be appreciated. >> certainly. first of all, i'll check my audio, can you hear me okay? >> yes, we can. >> and can you see my screen now? i'm showing that i am sharing. >> it's a summary plan participant in >> yep. >> very good. [multiple voices] >> you might want to -- oh, okay. bryan, sorry. yeah. it might be good if there's a way to make the whole screen and we don't need to see the other participants so if we can see -- maybe technology can get that up as the only item on the screen and remove everything else. >> it's not anything you can do on your end. >> oh, okay. >> darlene? >> oh. >> there you go. that one did work. >> try that. >> that's good. >> that's fine. >> okay. great. thank you very much. i'll take a few minutes, not on the screen but maybe pickup on ms. justin's comment. the comments on mr. collins, he's been a great counsel to our counselors -- and we'll miss joe, thank you for that acknowledgement. much of this report is what you have seen before. it's a refresh in stats and i'll take on the highlights beginning with the number of planned participants and the plan does continue to grow so we're at a high at 3,000 participants with an account balance. and the growth has changed a little bit. you'll see in the later stats, the number of eligible have decreased but we're still enrolling new employees in the plan and retaining participants as they retire or separate from service as it has grown in number of participants in the plan. assets typically follow generally the, you know, market, the broader market so for this past quarter, asset decreased about five percentage points from january 1st through march 31st. so we 5 billion with a b. it decreased since then, again, reflecting changes in the over, broader market. nonetheless, we have seen positive net cash flow in the quarter so $11 million. cash in is contributions into the plan by participants and outflows would be distribution by participants, so you know, while the market can move the needle much more, seeing positive cash flow overall helps the plan grow over time. i won't spend too much time on the individual asset analysis but i'll point out that as we've seen, the most popular invest. in the plan are the stable value fund. the live cap equity, s&p 500 index and the target date fund. but we see good diversification across different investments. what's of note for this, this committee is, where we see some of the transfer activity, we see, we've seen more flow in this past quarter into, save haven and index and bond. you can see it visually represented on this slide but it's easier on the slide here to see the actual dollars. stable value funds, you know, $19 million net flows into there instead of flowing out and we saw net and bond flows. representing a flight to safety and a volatile or negative market environment. let me hit on a couple of other things within the participation and contribution analysis. this slide does a good show seeing what's happening at an aggregate level in materials of the employee -- in terms of employee base. over two years we have seen the total number of eligible city and county and san francisco employee decrease by over two thousand since the beginning of 2020. nonetheless, the number the participants had opinion growing, but we saw a decrease in this past quarter, so the net result of that is a bit of a dip in our participation rate in an environment where we're seeing less employees hired, less overall eligible employees. with that said, our team and i'll talk about the accounts later n. addition to the outreach programs that was just mentioned, i'm looking for more opportunities to get out in person across the city and engage more eligible employees to participate in the plan. i'll skip ahead, if i jump ahead a few sections into participant service, customer service here, this is a reporting on our service levels for our call center. we're meeting our targets here. we try to keep advantage speed of answer under 30 secs and we have done a good job over the past year so nothing new and no concerns to report. and maybe i'll finish off on our local counselor activity. as we reported last quarter, since the dull terms of the pandemic, we saw an increase with activities with our counselors last year virtually but we had security month in october where we saw an increase in outreach and activity and as we move into this year into second quarter, we're starting to see more of an increase in group meetings that we hasn't seen in a while as our employees, our counselors are able to get out in the field a bit more. in addition to that, we started tracking reflecting here, other active we had including phone calls and e-mails that counselors handle from planned participants, just holistic represent the range of interaction that our counselors have with sfdc planned participants so this is something we'll continue to report out on. for the last several slides here are more around digital engagement. i won't spend time on that as you reflected that on prior calls. maybe i'll stop there and see if there's initial questions or comments from the board on anything i have presented or anything i might have passed over that you might have looked at or had a question on. >> i just have one question which may come up more in-depth at the next deferred compensation committee meeting. the issue of success at the targeting, i know there was one major group. i know corporations spent a lot of time targeting customer basis because it drives the sales. my point is we have several metrics of success we're trying to pursue. and we were never focused on helping them improve their investing though there's tools out there, et cetera. i just point that out about targeting, whether perhaps voya has a lot of targeting information worth sharing with us? and maybe you're doing that already but i have never heard of it. >> okay. i think that's something that -- i'll talk to diane. we have options around that. we can talk about what is most appropriate for this program. happy to take that as a follow up. >> okay. >> yeah. absolutely. yeah. and to add, we have done targeted messaging in the past before and we continue to do so, right. in the past, we have done the state campaign or restart campaign. that's when we identified those folks who have stopped or who should be increasing their contributions over $100. but there's other ways that we can certainly look at our population and we will continue to look for opportunities there, commissioner. >> thank you for that add on, diana. i appreciate that. >> thank you. >> any other questions, commissioners? okay. thank you. >> okay. i'll stop sharing. thank you. >> thank you bryan, is that the end of your presentation? >> this concludes what i prepared here, thank you. >> great. diane, anything else for your presentation? anything else to add? >> no, thank you, president safai. that concludes my report. >> wonderful. any additional questions, commissioners? okay. seeing none, we will open it up to in-person public comment first and we'll open the phone lines for public comment callers on this item. madam secretary, please call the first speaker. >> thank you. we have no in-person public comment at this time. a reminder to callers to press star three to be added to the queue. moderator, do we have callers? >> madam secretary, there are no callers on the line. >> thank you. hearing no calls, public comment is now closed. >> great. public comment is closed. madam secretary, please call the next item. >> item no. 13, discussion item. retirement system travel expense report for the period beginning january 1, 2022, through march 31, 2022. >> commissioners, you have before you a list of the travel expenses for the first quarter and you'll notice they're somewhat modest and i can assure you that now the restrictions have been lifted, investment staff and sfers staff and the attorneys are traveling more as well as some of the board members and in the future, we'll see this is an expanded list. i'm happy to take any questions. >> i'm sorry. commissioner -- >> a picture is worth a thousand words and the travel budget was a million and 30. and we did a million, we've spent remaining a million 20. >> but we never spent that -- >> i know. >> before the pandemic. >> i have a question. the number of the location were virtual so it was a fee to get on to a virtual session? >> yes. >> okay. and then that's it. sounds good. >> thank you, commissioners. >> any additional questions or comments? all right. madam secretary, we'll take public comment at this time and start with in-person comment and go to virtual comment. >> thank you. we have no in-person comment at this time. >> public in-person public comment is closed. call anyone online. >> callers, if you haven't done so, press star three to be added to the queue. moderators, are there callers in >> madam secretary, there are no callers on the line. >> thank you, hearing no calls, public comment is now closed. >> public comment is closed at this time. secretary, please call the next item. >> item no. 14, discussion item. executive director's report. >> commissioners, on behalf of mr. huish i have four item to present that's included in this report and the first is a copy of the press release that was sent out announcing the hiring of sfers new ceo and cio, alison romano. she should be starting on june 13th. she has, she was here last week and met with some staff and i believe some of the board members. you've also got information regarding the mandatory -- mandatory harassment training and the deadline is december 31, 202. all board members must complete it and if you need assistance, let us know but we have instructions in the report that should help you logged in and complete the training. we have provided a copy of our operations or retirement services dashboard. this was something that we had started prior to the covid shutdown and we are reinstituted it now. we will provide -- we will be providing this to be quarterly with updated numbers. and then finally, we're going to report a little bit about our return to office plans. i think mr. huish reported in the past that the staff is in the office two days a week and is working remotely three days a week beginning july 1st. we understand there is a proposal that will require all employees to be in the office, a minimum of three days a week and assuming that it is finalized, we'll follow that guideline and i'm happy to answer any questions. >> thank you, madam bortnick. >> we proposed a minimum. >> are you going to commit to those three days or do they float? >> my understanding is the specific days will be left up to the department. and so we will -- when one stat is finalized, we'll work on that with staff. >> okay. >> i wanted to say from the city's side, being a commissioner here and also a member of the board of supervisors, one of the way is the conversation -- so employee were listening, there's flexibility in hours, too. the if the question is to be in-person, minimum three days a week, but there's also, i think there's flexibility around the hours and there's a lot of people that have concerns about the commitments that they've made over the last couple of years in adjusting their life schedule. that's something that should be discussed with supervisors as things move forward. >> good point. >> thank you. >> city attorney is looking at me to make sure i didn't say anything incorrectly. [laughter] >> i think three days minimum doesn't mean you know, eight hours -- there's flexibility in the way that that can be negotiated and worked out moving forward until and then if we get additional guidance from human resources. >> thank you. >> did i say that okay, madam city -- >> i haven't heard about the flexibility but if that's in the works, great. >> i'm putting that out in the universe. [laughter] >> so, you know why i bring that up is because i have a lot of concerns with a lot of people that say, you know, can i come in earlier, do i have a little more flexibility in my schedule in terms of the hours i'm there? i might have to pick up a child or, i think that's an important piece of what we've kind of evolved to here as we've gotten to a more remote schedule and remote living over the last couple of years. we want to remain competitive in the industry. there's a lot of folks that we employ that also have counterparts in the private sector that have a more flexible way of approaching the job and i think we are being asked to, on city's side, look at it from a flexibility point of view. that's what i wanted to put out. >> if i might respond. >> commissioner heldfond. >> we experienced that here at sfers. not only with our fix day san francisco teams but our investment team, are doing it in all-time zones across the world in terms of investments they're doing and due diligence and liking and keeping us competitive. >> i think that's an important point. >> yep. >> and i would just say just from the other side, just so people don't think the city is being cruel or cal this is a lot of the vibrancy of the city which makes up a vast majority of our local economy, they rely on individuals coming in and being a part of the local economy, so i think we're doing it in a measured way but it also is important for the vibrancy of our city. so, that's another important factor to think about when we, as people understand why we're promoting coming back into the office. it's not just abouten -- about ensuring to see you and interacting with staff but thinking about the city as a whole and how important it is for our overall city. thank you. -- i have one observation and one question. >> commissioner -- commissioner driscoll. >> thank you for the website. it looks like one hundred percent if i'm reading the main chart correct and it's not the main question i have. >> it's not one hundred percent. why maybe it should be changed or maybe i should understand it better. the retirement pin number looks higher than historical but we are at a bigger system. and the question is the flow and what are the attorneys and doctors, is there anything we can do to control reduce that number and it's continuously high which goes to me a service question but the more important question is looking at the retirement numbers and maybe because we're bigger and there has been so many retirements and that number should go higher. the question is, we wanted and or helped staff go through the hiring process to hire the number of people we need. it's a productivity service question and it's a lot for one meeting but i'm figuring out if this data indicates we're going in the right direction in getting the resources we need? >> frankly, that picture does not reflect the fact that in last few months, for example, city attorney's office has hired two full-time attorneys to clean, to move the cases that were sitting and they are, i can tell you they're moving very quickly and you will see in the next few months, they have gone to hearing and you'll have designs to approve. we've also people on the disabilities side to help manage the flow of the cases and finally in workers compensation which i'm not sure you're aware of, we were having some difficulty in getting the documents from them because they were short staffed. workers compensation has recently been able to hire someone who is dedicated to helping us get these materials and they've started to do so. and the cases are starting to move very quickly. so i think in the next quarterly report, they're still seeing improvement. >> thank you. we can use it as a baseline for the next three months to see which direction the numbers are good. >> great. any other questions or comments? wonderful. we'll move to public comment. we'll take in-person public comment first. seeing there aren't any in pesh, public comment in person is closed. madam secretary, please call up public callers at this time. >> press star three to be added to the queue if you aren't done so already. moderator, any callers in >> madam secretary, no callers on the line. >> thank you. hearing no calls, public comment is closed. >> thank you, madam secretary. public comment is closed. call the next item. >> item no. 15, discussion item, retirement board member good to the order. >> commissioners have items for good of the order? commissioner thomas. >> i just wanted to ask a question so we can address at the next meeting but we got an e-mail from a member who had concerns regarding benefits for their spouse and in the event they pass away and what the rules are. i'm not familiar with the rules but if i can get a copy of that, i would love to review it and get information in the future. >> thank you. >> any other commissioners, anything for good of the order? i will say, i have one thing i wanted to comment on. just wanted to let folks know probably they knew that our incoming ceo, cioalison romano is in town as noted. she has met with staff and i've sat down with her and talked to her about her transition and she's looking for a home to re-- to reload kate her family but she's reaching out to leadership and checking with staff and get direction and really look forward to hitting the ground running next month. and her start date is june 15th, right? >> 13th. >> 13th, sorry. that was the pay period. june 13th. if anyone needs to get to her, she has talked to scott and she's happy to begin respond and communicating in advance of her start date so i wanted to put that out there, so if commissioners need to touch base with her, she's making herself available, any ideas or concerns, i had the opportunity to go over a number of things that i wanted to highlight for her and so, you all should feel free to do the same. the commissioner and vice-chair, vice-president heldfond also met with her. so i wanted to put that out there. >> thank you. >> all right. i guess the, do we have to take public comment on that as well? madam secretary, since there are no in-person public commenters, public comment can be opened but public comment in person is closed. please call any callers online for public comment. >> thank you. a reminder to callers, press star three to be added to the queue. moderators, are there callers on the line? >> madam secretary, there are no callers on the line. >> thank you. hearing no calls, public comment is now closed. >> public comment is now close. thank you, madam secretary. and i guess we are adjourned. >> you're adjourned. >> we're adjourned, thank you everyone. >> yay. >> thank you for your hard work today [adjourned] >> i am iris long. we are a family business that started in san francisco chinatown by my parents who started the business in the mid 1980s. today we follow the same footsteps of my parents. we source the teas by the harvest season and style of crafting and the specific variety. we specialize in premium tea. today i still visit many of the farms we work with multigenerational farms that produce premium teas with its own natural flavors. it is very much like grapes for wine. what we do is more specialized, but it is more natural. growing up in san francisco i used to come and help my parents after school whether in middle school or high school and throughout college. i went to san francisco state university. i did stay home and i helped my parents work throughout the summers to learn what it is that makes our community so special. after graduating i worked for an investment bank in hong kong for a few years before returning when my dad said he was retiring. he passed away a few years ago. after taking over the business we made this a little more accessible for visitors as well as residents of san francisco to visit. many of our teas were traditionally labeled only in chinese for the older generation. today of our tea drinkkers are quite young. it is easy to look on the website to view all of our products and fun to come in and look at the different varieties. they are able to explore what we source, premium teas from the providence and the delicious flavors. san francisco is a beautiful city to me as well as many of the residents and businesses here in chinatown. it is great for tourists to visit apsee how our community thrived through the years. this retail location is open daily. we have minimal hours because of our small team during covid. we do welcome visitors to come in and browse through our products. also, visit us online. we have minimal hours. it is nice to set up viewings of these products here. >> good morning. this meeting will come to order. welcome to the june 2, 2022, regular meeting of the government audit and oversight committee. i am supervisor dean preston, joined by vice chair connie chan and supervisor>> supervisor mandelman:. the -- mandelman. and i want to thank our crew at sfgov tv for staffing this meeting. madam clerk, do you have any meetings? >> the board of supervisors are convening hybrid meetings. the board recognizes that equitable public

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