tv Retirement Board SFGTV November 13, 2021 4:00pm-6:16pm PST
thank you. would you kindly read the admonition, please. >> clerk: due to the covid-19 public health emergency and given the public health recommendations issued by the san francisco department of public health mayor breed has lifted restrictions on public teleconference. today, we're participating via teleconference. this will ensure the safety for the board, for the staff, and members of the public. this technology allows us to hold these meetings via
teleconference, it may not employ as seamless as we'd like it to be. a reminder to board members and staff to mute themselves while not providing comment to minimize background noise. >> thank you very much. role call, please. >> clerk: [roll call] thank you. we do have a quorum. >> president: call the next
item, please. >> clerk: item number two, communication. through the covid-19 health emergency and to protect board members, city employees, and the public, san francisco employees retirement system is closed. however, members will be participating in the meeting remotely. this precaution is taken pursuant to local state orders and directives. board members will attend the meeting through video conference and participate in the meeting to the same extent as if they were physically present. public comment will be available on each item on this agenda. each speaker will be allowed two minutes to speak. comments or opportunities to speak during the public comment period are available via phone by calling (415) 655-0001 access code 14666804497 and then pound and pound again. when connected, you will hear
the meeting discussions, you will be muted and in listening mode only. when your item of interest comes up, press star three to be added to the speaker line. best practices are to call from a quiet location. speak clearly and slowly and turn down your tv or radio. >> president: okay. at this time, we'll take l public comment. >> clerk: thank you. callers if you have not already done so, please press star three to be added to the queue. for those already on hold, please continue to wait until the system indicates you have been unmuted. moderator, do we have any callers on the line? >> madam secretary, there are no callers on the line. >> secretary: thank you. hearing no calls, public comment is closed. >> president: next item. >> secretary: item number three, action item. review and approval of the november 2021 board resolution to continue to meet remotely for at least 30 days pursuant
to california government code section 54953e. >> commissioners, as we presented to the board last month to approve a continuing remote access for board members to participate in board meetings so that we can hold this meeting as well as any other board meetings for the next 30 days remotely. again, based on the current health orders and executive orders that are in place at the state and at the local level. i'd be happy to answer any
questions. >> president: commissioners? any questions. all right. is there any discussion? madam secretary, are there any public callers. >> secretary: thank you. please wait until the system indicates that you have been unmuted. moderators, do we have any callerses on the line? >> madam secretary, there are no callers on the line. >> thank you very much, role call vote, please. >> secretary: [roll call]
thank you, we do have 5 ayes. motion passes. >> president: okay. at this time, we're going to readjust the closed session, we'll take 4b first and then 8 andc at this time, is there any public comment regarding the closed session? >> secretary: callers, please press star three to be added to the queue. moderator, do we have any callers on the line? >> secretary: thank you. hearing no callers, public comment is closed. >> president: thank you. now we'll go to closed session and have everybody move to that
needs to be in 4b. >> 4b is the investment? >> president: >> we will resume open session of the november 10, 2021 meeting at this time. roll call. commissioner bridges. commissioner bridges, we are taking roll call. not arrived yet. commissioner driscoll. >> here. >> commissioner gandhi. absent. commissioner heldfond. >> here. >> commissioner safai. >> here.
>> president casciato. >> here. >> we have a quorum. >> we are back in open session. i will entertain a motion to disclose or not. >> move we do not disclose. commissioner heldfond. >> is there a second? >> second safai. >> okay. public comment, please. >> members of the public who wish to provide public comment call 415-655-0001, access code (146)680-4497. pound and pound again. if you have not done so press star 3 to speak. the system prompt will indicate you have raised your hand. wait until you are unmuted to begin your comments.
state your name. you have two minutes to provide comments. do we have callers on the line? >> madam secretary, there is one caller on the line. >> thank you, please state your name. your two minutes begin when you speak. >> hello. i am richard halstead calling on behalf of my wife who retired as a nurse at san francisco general hospital and son developmentally disabled. will he end up homeless and hungry? how will he access healthcare and basic needs. a portion of my wife's pension reduced to my son. the system requirement that payments be made directly to him not to a special needs trust
severely under mines the effectiveness of the benefit. survivor immunity by adults with disabilities can cause disastrous consequences for individuals that receive such benefits as supplemental security income, medical and low income section 8 housing with this monthly income can result in complete loss of benefits that can be barrier to affordable healthcare, community support services and much more. many public retirement systems including teachers, university of california and defence accounting service changed to designate payment of survivor immunity to subpoena mental needs trust rather than to child. on behalf of my son and other individuals affected i implore
you to bring the policy in line with other retirement systems. you will be ensuring your beneficiaries receive equal treatment. thank you very much for your consideration. i would hope you agendize this for an upcoming meeting. thank you very much. >> roll call, please. >> commissioner bridges. >> can you hear me? we are taking roll. >> commissioner bridges. >> here. commissioner gandhi. >> aye. >> commissioner heldfond. >> no. >> commissioner safai. >> here. >> this is a roll call vote. commissioner stansbury absent.
president casciato. >> aye. >> we have six eyes. motion passes. >> at this time i will call item 10 out of order. >> update on strategies to address climate risk on the sfers portfolio oil and gas sector. >> i make a motion to continue for one month, please. >> thank you. motion to continue the item. can i hear a second. >> second. >> seconded by commissioner gandhi. any discussion from the board members? public comment, please. >> thank you. callers press star 3 to be added the queue.
do we have caller on the line? >> there are no callers on the line. >> thank you. no calls, public comment is closed. >> roll call vote, please. >> commissioner bridges. >> aye. >> commissioner driscoll. >> aye. >> commissioner gandhi. >> aye. >> commissioner heldfond. >> aye. >> commissioner safai. >> aye. >> president casciato. >> aye. >> we have six ayes. motion passes. >> thank you. >> which item? >> back to the calendar. >> 5 general public comment.
>> we receive an e-mail from john stenson. our pension fund is more than $300 million over funded use this money to purchase the san francisco office building because if you don't you will lose it in the upcoming market crash. san francisco office building will be a much better investment than hedge funds. if you want to attract top investment talent they want to work out of an office not a cubicle. trump will need cash next year. you can buy his 33% interest in bank of america building on california street. with best regards john stenson 46 year member. that is the only e-mail public comment we receive. >> press star 3 to be added the queue. if you are on hold wait until the system indicates you are unmuted. are there any caller on the
line? >> madam secretary, no callers on the line. >> thank you. public comment is closed. president casciato. >> the deferred -- item 6. >> discussion item. san francisco deferred compensation plan quarterly report. q3 of 21. >> thank you. can you hear me okay? >> yes. go ahead. >> good afternoon, commissioners. thank you so much for being here and thank you president casciato. today i will tell you why the deferred compensation plan matters. i come from a line of public servants. mother counselor at city college. ph.d. for 30 and aunt works as a
nurse at the va. i come from a line of physicians my sisters and cardiologist uncles and not my extended family. when i chose my step in the career i strucked with pursuing medicine or life of public service. i spoke to people about this. many would say, wow, city job, take that one. give me some salary potential later and you willry it back in the golden years. this would be true for some. i am not true for the majority or for those retiring today. in fact, we recently worked with on actuary. 90% of the employees receive only 45% of salary in pension benefits. rule of thumb you need 80% of
income to live comfortably in retirement. this is inching upward with the cost of living and healthcare increasing. you would prefer to live on 80% rather than 45% of salary. the plan matters. it fills the gap. employees need to comment the pension benefits to live comfortably in retirement. this is designed to deliver an exceptional program with empowering education and add vance tools to help employees reach their financial retirement goals. this is their mission statement and guiding light for the initiative and effort. they take the jobs seriously. as you can see from the attached report we had another big quarter. i am delighted to show highlights of the plan. investment, marketing, operations and the record keep person. you have probably noticed the market movements this year.
to start as our investment consulttant to discuss the recent performance numbers with the board. feel free to share your screen. >> thank you very much. i hope you can hear me and see my screen. thank you everyone. good afternoon. i am not going to spend too much time. this isn't our normal semi-annual performance but we thought we would highlight a few things using your quarterly dashboard, if you will. as you are familiar you can see the fund names on the left-hand side. balances of the assets. at the bottom are the total assets of the plan increased to
$4.8 billion as of september 31st. make assessments of performance for the funds for the trailing one quarter ended september 30th and the year-to-date performance. out of the eight active fundings i am pleased to report six of eight outperformed and seven out of eight at least matched the index for year-to-date. strong returns, particularly in year-to-date column with the largest performance from the real estate fund up 21%. each individual fund managers continues to offer a very diversified approach within their style and something we pay close attention to. in the funds that had been challenged in previous year when growth was very much in favor
have bounced back nicely in the pockets when value has come back in favor. particularly the after equity fund in some of the value managers within international in the small mid cap fund. the necessary result is shown in the target date fundings on the bottom portion of the page. you can see from the most conservative retirement to the 2060 buy fund with the most equity exposure. from a big picture standpoint on the year to date basis all funds are outperforming respective benchmarks. strong relative results. most importantly, very strong absolute results for participants with a longer dated funds returning close to 12% on a year-to-date basis. i will stop there. you can certainly peruse the rest at your leisure.
i will turn it back over. >> thank you, greg. if there are no more investment questions we will move to marketing. as you can see this has been a rather intense period with targeted outreach, outbound calls and national retirement security campaign. you can see the portfolio. i will highlight a couple areas. another successful e-mail campaign with exceptional conversion rate during the first and third week of october. the average conversion rate is 2.5% above all industries. for government it is a little higher at 3.5. we beat those at over 5% and sometimes 5.5%. we continued the webinars and
saw record attendance p.100% found them helpful and convenient. it is on page 4 of the memo. we launched the raffle game plan and play. it generated a lot of traffic. 100 won a stainless steel travel mug and weekly prize. two in hsa, a newer partnership and other own winner allo martin. overall this campaign was the most successful and we have receive over 150 enrollments and 800 contribution increases in october alone. we also did two direct mails over this quarter. this did very well.
for context. forbes did an article how direct mail is still effective 4.4% response rate compared to less than a half percentage for e-mail. when you compare those numbers to the campaign of nearly 14% taking action the numbers should speak for themselves. i want to extend my deepest appreciation to the marketing consultant, five counselors and our dedicated staff for spearheading these accelerated efforts this past quarter. operations. if you haven't heard yet. the office is open for in person appointments. on tuesday and thursday from 8:00 a.m. to 5:00 p.m. the hours could change. staff has been coming into the office at least two days each week since november 1st. according to city policy first
in person pointment was on november 2. we have to live with coronavirus we have to meet participants in desired communication channel when it is safe, of course. the office has receive around 10 appointments since we re-opened. it appears participantses an feeling normalcy going forward. thanks to tony chu for conducting these meetings. last but not least is the record keeper. you probably heard of the great resignation and the city has been experiencing an unprecedented number of retirements as the pandemic caused many to push up retirement to enjoy life earlier. as such we introduced some marketing for those nearing retirement on the transactional
website to guide them on the path to retirement. staff attended the proprietary initiative and goals to align with the past. i asked brian to share with you today a plan review that we have designed together over the last few months. this replaces the quarterly statistics you have been receiving and is an extensive look to the nuts and bolts what we do and the scale in which our team, which is small but mighty is responsible for. he will spent 15 minutes with this presentation. please share your screen. >> my pleasure. can you hear me okay? great. if i could be granted access to share my screen. i will go ahead and do that.
sharing your screen. very good. you should be seeing a screen that says quarterly plan review. can you see that okay? i will get started. there is a lot of information here. i will try to summarize and highlight the key information that is presented within. beginning with executive summary. what we have seen really over the last couple years since we began the partnership. the plan has grown. you can see we measure growth with number of plan participants with any individual with an account balance in the plan regardless of employment status. this information is through september 30th. we have over 32700 in total. there was a decrease in 2020
with the information just referenced in terms of hiring trends in the city and elsewhere. that overall asset growth is growing steadily since the end of the first quarter of 2020. reflecting the increase in market valuations of assets overall as well as general positive net cash flow. in other words, more money flowed into the plan than out of the plan overall. for example we look at the one quarter. net cash was negative this quarter. it fluctuates from quarter to quarter. since 2019 overall we have seen $31 million more come into the plan than leave the plan. we break down -- i won't spend too much time on asset analysis.
she did a nice job. overall you can see the majority of assets are in the stable value fund, large cap equity as well as target date funds. detailed breakdown is provided here on slide 9. this information was in earlier presentation. we look at how plan participants allocate investments. one way to look at that is to see those with all money in single fund and target date funds are designed to be single investment. we look at the other funds. we see over 4,000 participants with stable value funds. that might be an opportunity to educate on diversification. i will move on to the next section. participation and contribution analysis. if there is any questions feel
free to comment. i will move along. some interesting information. you may know plan participants have the opportunity to save in the plan utilizing a fixed dollar amount per paycheck. for example, an individual can put in $500 per paycheck or the opportunity to do so as percentage of pay. i want 3% of my income to go into the plan. historically the dollar per pay is more popular in the graph on the left. three-quarters of plan participants utilize dollar per pay. 80% of new employees take advantage of the percentage per pay. there is benefit to that for new employees, young employees, in that as income grows those contributions can grow with that. there is benefit to that option.
despite the fact we have seen fluctuation in perhaps hiring and increase in retiring in plan, we have seen overall participation increase. eligible population, number of city employees eligible for the plan has decreased over the past couple years to a low point of 35403. we realized the high point in the number of participants, number of employees who participated in the plan. this is overall driven out participation rate up over this time acceding 60% for all eligible city employees. our hope is that as the local counselors return back out and meet more people in person going forward that will help us further enable and encourage people to enroll in the plan going forward. that is one of our key plan
goals. the next several slides outline some of the volumes of distributions out of the plan both by month and quarter. as well as the loan activity that you can see by quarter as well. one of the things i will highlight we do a breakdown of those out of the plan where they go to. we see here some of the retail shops charles schwab, edward jones, wealth managers to roll money out of the plan. we are tracking and we can see over time with your plan as well as others. moving quickly through participant services. we look at how your plan participants engage with the plan and your service provider.
2020 was a very busy period for our call center staff, given the covid pandemic, volatility in the markets. 2021 is more stable and that is in the decrease in the number of calls and we have done a good job of meeting that service demand in terms of staying within our 30 second benchmark of answering and realizing high customer satisfaction. it is something we track very closely month-to-month. next couple slides show ways of illustrating those volumes and average speed of answer metrics. the other area that i will focus on is the local counselor activity. this slide 27 does a pretty good job illustrating the life cycle of our local activity since the
transition of the plan to voya. you can see during the initial first several months reflect increase in activity as we build out our team, starting to penetrate the city and build relationship there. the covid pandemic had a immediate effect on the ability to meet with people in person. we quickly were able to pivot and offer the virtual one-on-one sessions and replace in-person meetings with webinars to pick up activity through the rest of our relationship. the activity over the last month, october, national retirement security month where those activities we talked about really resulted in good spike of activity there. to find creative ways to meet with plan participants where they are and by what means are
available to us. we look to continue to adjust as we move forward. >> the next several slides i will refer to as digital engagement. we will look at how your plan participants engage with our digital properties, going on line, tracking what actions they are taking as a result of that. what effect that has on behavior in terms of savings and projected retirement income. here we can see year-to-date through september 30th. 17,000 plan participants logged into the website. of those we track how many engaged, took action, utilized loan tools and viewed personal video we put out there alongside quarterly statements. to take a deeper dive, as an
example, i mentioned that we can track how many people have engaged or interacted with the thetools. this is an illustration of projection of future retirement monthly income based on information we have for the plan participants provide. when they log in we prompt them to enter in salary to do the projection. we know how much they saved in 457. how much they are currently saving. we also allow individuals to enter other retirement savings they may have. pension income, brokerage account or some other savings. based on that we can do calculation for them of what that future retirement income is against the goal they can personalize. they have a goal of trying to reach 70 or 80% of current income in retirement we can show
how they are progressing against that goal. you can see here is an example. 7% of those interacted with these tools took some action. in general, in overall we see those who take action tend the increase savings in terms of percentages or in dollars per paycheck. we can do a breakdown snap shop overall participant base looking at this information by gender, age, we can look at savings rates and balances by each demographic, both in terms of percentage savings rates as well as dollar savings rates. we can see and realize the
savings trend differences as those get closer to retirement they tends to be more likely to want to save more and have ability to save more at that point. importantly to us, we also track what percentage of the population are engaging with us. we think engagement is important. those who engage with us tend to save more. my apologies. can you hear me okay? >> i knocked my headphones out of my phone. sorry about that. we can see here about 60% of plan participants engaged by the
web, mobile app or the phone. we can also see the demographic break down. those younger tend to more heavily concentrate online or through the mobilian. closer to retirement have more complex questions or needs pick up the phone to speak to us. we can track that. it helps understand the demographic groups to support them properly. i mentioned earlier how we calculate income. what we refer to as income replacement based on the information we have. we tends to have a benchmark of looking for participants to generate at least 70% of the income. each person can customize that as an individual's choice in terms of their goals. we can track those individuals who are entering outside assets
versus those who haven't seeing how that income replacement is benefited by entering outside information. we can track this over time as we look to engage with with plan participants to select pension information on the tools we rolled out last year for a more holistic view of what that future income looks like. lastly, we can track this engagement over time. also see how that engagement results in improved or higher average income replacement as well as overall higher savings rates. i covered quite a bit of information fairly quickly. i will stop and take a breath and entertain any questions or comments from the committee. >> i know we were short on time
so we moved quickly. if you could go to the beginning of the presentation where we showed allocation of investments. i want to share the evolution of investments over the last few years. it is that piechart with stable value. when brine mentioned to you that stable value was a large portion 20%. i wanted the board to know we have drastically reduced that number over the years. in fact, when i came on board, i think it was almost 35% allocated to stableval law. there are great that is about stable value. it is guaranteed. it is conservative. it is like hiding cash under the mattress. not forward looking. we have been scaling back by promoting targeted funds, making changes to investment to better meet needs of investors who
is there some counseling about it because these other groups are coming in and pitching very strongly. >> yeah. i can say a little bit and we can chime in on acquisition efforts and mr. merit can talk to any efforts we've put in to stop some of these gaps. i would just say these are sort of the big sigh. we color coordinated the numbers. so we color coordinated the numbers -- not the numbers, the firm so you can see the movement of the chairs and usually it's the same five or ten which you've seen here. you know, i think schwab has always been the largest grabber
and someone who previously worked at schwab, i know all the acquisition efforts. and we would have these campaigns where if you roll over your old 401ks will give you $2,500 and as people are looking for pays to consolidate their 401k plans. we would love them to consolidate with us as we work hard to promote rollovers into the plan. but i have to say that these firms that you see here, they are going in full force. these are people who have existing clients. like, i don't know anybody who doesn't have a charles schwab account. and vanguard, a lot of people have vanguard funds in their ira and fidelity is enough said. so we can do our best i think to continue to track these and
we do our best by launching other things, like we launched managed accounts. managed accounts recently, we did specifically to target hopefully those nearing retirement or in retirement to give them a draw down strategy. i suspect that a lot of these rollovers are results, you know, of our retirees moving the money out and consolidating. our hope is that the introduction of these types of white glove service will give retirees some choice, you know, in staying with us knowing that somebody would help them draw down their assets. i think one of the reasons why we chose managed accounts too was they offered a service. i think it was incomplex. i'll let mr. mayor talk about that. greg, do you have any comments about the investment managers
and then we can ask mr. mayor about efforts. >> sure. the only additional observation i would make, is when you look at the universe, fidelity is the largest. and their business model is very much on what ms. julie justin was focused on is rollovers. that's when a participant's balance is the largest. they're an asset manager, you know, and we've seen in power just for provincial, there's a lot of m.m. a. in consolidation and a lot of that is all driven on the business model of rollover assets. you've built a grass mouse trap. you've built institutional pricing investment vehicles participants would not have access to outside. so i think you're doing a great job as a plan. it continues to highlight the need for participants to be educated on the great bells and
whistles that you offer that they're going to be hard pressed to build outside the plan in the rollover situation and i think that's the evolution of the industry we've seen so far. >> if you'd like, i can speak to a few comments there as well. this is kind of an industry challenge. clients want to try to retain their participants. they've put these great plans in place and that's one of the reasons that we actually offer, you know, rolled out the new retiree resource stage. that's something we introduced to all of our clients just trying to put on the forefront more education about what their options are. we hear time and time again from individuals who take the money out of their plan because they were misunderstood or misinformed and thought they had to take the money out of the plan. part of this education when you
put that on the forefront. some of our local counselors actively talked to planned participants about it. to proactively reach out to make sure that they know we're here for them and that they had the opportunity to keep their assets in the plan and talk to them about what their options are which includes not only keeping assets in the plan, but also the ability to draw income out of the plan whether it's the managed account income plus solution offered before. so as an organization, we are continuing to try to find creative ways of keeping down the forefront as well as the plan. >> actually, you hit it exactly on what motivated my question was i did get a call from one retiree and she said, i'm turning 72, and i have to take all my money out.
i said you've got to call the plan. and she said i've been on the website trying to figure out if i have to take all my money out at 72. so i think maybe that would be something that says, you know. there is confusion and the change from 70 to 72. i told her make an appointment without a counselor, that kind of stuff, but that was exactly what was her belief. so she wanted to know what should i do? where should i go with it, you know. so that's i think a question and we're going to have a lot more of those in the next -- with quite a number of retirees that have moved up their retirements. so there's that. >> okay. thank you very much. any other commissioners who have any other questions or feedback or comments?
>> commissioner: question. is this chart for roll-outs or roll-ins or both? >> roll-outs. >> yeah. >> okay. that's what i was going to ask. okay. thank you. >> only roll-outs. >> yeah, this is the money going out. >> okay. thank you. thank you very much. >> thank you. >> yeah. anything further, diane? >> no. the only thing that i would just touch on too is the fact that we had about a 55% to 60% participation rate and we're always driving to increase those numbers and right now we have a couple items in flight in hopes to inch that number forward, you know, whether or not we could actually get auto-enrollment off the ground. that's by far the most successful way for us to increase enrollment and auto
enrollment doesn't mean forever enrollment, it just means enrollment and they can opt out if they'd like to. one of the things is that at least everybody knows about it. if they choose to not want to participate, that can be their choice, but i want them to actually have that option. when i first came to the city, i remember doing meetings for departments to better understand their retirement needs and i remember some librarians would come to me and say i didn't know about the plan. i'm 55 now, i wish i knew about this earlier. and they would know enough that compounding and the value of that is something they wish they started earlier. so i'm pleased with the way we've modernized the plan, by making things virtual and reaching a younger audience and you can see by the feedback, the younger people are listening. and i think i'll stop there for giving us a time to talk
through the plan. >> you said increase. does that increase year over year. i'm looking back at your numbers. that's a big increase year over year. >> yes. thank you. brian, do you want to talk about that. obviously, you see we've been very busy and we also know that there's been some retirements as well with the great resignation. and i know that the city is still hiring, but, you know, brian, if you want to talk a little bit out to the success of our efforts. >> yes, that's important. i can see the difference in the year to year numbers. >> thank you. >> yeah. i'd be happy to. and we have a few things in place. certainly, that's early. once our team ramped up and we're able to get further penetration into the plan, i think the other maybe new enhancement that we're starting to realize is that the online enrollment capabilities that didn't exist there before. so historically, the plan
required paperwork. we now have the ability for individuals to go directly online even before we get information from them. so they can go online, initiate their enrollment, but that's expedited the ability for someone to get into the plans. i think there's a couple of different factors in place here that have helped move some of those numbers. i think we have even loftier goals that we've realized so far, but i think that's contributed to the increase and we're committed to continue to drive that forward. i guess the other thing that is contributing to essentially the recent spike in the numbers is the campaigns and to adjust and mention earlier. we saw, you know, several hundred increases in new enrollments from the direct marketing campaign in estimates and security month combined and so that's obviously contributed to the increase in
participation as well. >> and, if i could just add, you know, that number 60% or 60.6% is a number i feel the board should be proud of. the fact we are 100% voluntary plan, it's truly a high percentage, truly a high percentage. and i think brian and greg could talk to that. i know in talking to some of the other plans, it's not nearly as high. when you think about all the deferrells. it's that residual income after pension, after health care. after all the other things. after social security, you know. and so, there's just so many things and when you have about, you know, 28% of your salary already gone, that residual amount is what our participants put into the plan and that is why we work so hard and why we are so dedicated to what we do.
>> yeah. >> thank you. public comment please. >> thank you, callers. if you've not already done so, please press star three to be added to the queue. >> madam secretary, there are no callers on the line. >> secretary: thank you. hearing no calls, public comment is closed. >> president: next item, please. >> secretary: item number seven, action item. approval of the minutes of the 2021 retirement board meeting. >> president: moved by commissioner driscoll. >> commissioner: seconded, mr. president. >> president: seconded by
commissioner bridges. any comments? public comment, please. >> secretary: thank you. reminder, callers, press star three to be added to the queue. moderator, do we have any callers? >> madam secretary, there are no callers on the line. >> secretary: thank you. hearing no calls, public comment is closed. mr. president. >> reporter: roll call, please. >> secretary: [roll call] thank you, we have five ayes.
motion passes. >> president: next item, please. >> secretary: item number eight, action item. consent calendar. >> commissioner: i move acceptance of the consent calendar. >> president: moved the by commissioner driscoll. is there a second? okay. commissioner bridges seconds. any commissioners? public comment? >> secretary: moderator, do we have any callers on the line? >> madam secretary, there are no callers on the line. >> secretary: thank you. hearing no calls, public comment is closed. mr. president. >> president: okay. roll call vote, please. >> secretary: [roll call]
thank you. we have five ayes. motion passes. >> president: yes. thank you. next item, please. the. >> secretary: item number nine, discussion item. annual, environmental, social, govern answer, est platform update. >> good afternoon, commissioners. i'll give a brief introduction to the next five items. i'll set the stage for the afternoon, make one introduction, and then offer some highlights for our esg program. as has been our policy over the last couple of years, andrew and adrienne will provide a local update to include a platform update focusing on our three pillars esg management and collaboration and communication. we'll also touch upon our climate action plan and update on our utilities sector frame work. that update will then be
followed by action items to recommendations to changes regarding the different sectors and these include tobacco, firearms, and coal. before i get started, i do want to introduce adrienne von consult who hasn't had an opportunity to present to the board that often. she's a san francisco native. she joins after the role in the carbon lighthouse association where she led research on u.s. sustainable agricultural and carbon. she has a degree or bachelor's in political science and in her spare time getting her mba at u.k. berkeley's school of business. andrew is not necessarily one
to promote him, but we've made astonishing progress over the last three years in terms of each of the three pillars of our esg program. in terms of active ownership, we had no engagement with companies four years ago. today, in this past year, we participated and led a number of engagements through the climate action 100 with the likes of kyle phillips and our gm. we significantly expanded our gender racial ethnic and lgbtq plus diversity efforts joining with 17 companies. in terms of esg investment minute, all investment recommendations across all asset classes now include detailed esg due diligence processes complies of
questionaires. and we've developed esg score cards for each asset class and every one of our large relationships. we've participated in a variety of advisory groups including those with p.r.i. series. we've worked with the likes of msdi and the development of new toolses around private equity. spurs has become a leader in the esg movement and she'd be very proud of what we've developeded over the last two years. you wouldn't say that about yourself, henry, so i thought i'd say it for you. i'll turn it over to andrew and adrienne to provide some of the updates. >> thank you, kirt. appreciate that intro. good afternoon, commissioners. very pleased to be presenting our annual esg update today. as kirt said, we'll sort of do this in two parts. i'll go through an overview of the esg platform and what we've
worked on through 2021 thus far and then i'll also present our climate action plan which is attached to this item, item nine here. then, we'll pass to the voting items, before voting items. adrienne's going to walk through those for our investment restrictions on tobacco, firearms, and thermal coal with the investment restriction being calendared at a later date. so we've provided an update on the platform. as a reminder, our esg strategy really begins with that investment belief that incorporating environmental and social governance factors should give us better insight into the respiratory characteristics of those investments. but, at the same time, what we do acknowledge that it's not a
one-size-fits-all approach and we've developed a differentiated and nonprecipitationive approach to esg expectations for each asset class, different investment geographies. different sectors and even different investment styles that our managers on our behalf. our work is not new. it's pretty long standing. it's been on the agenda here since at least 1988 when we first introduced social investment policies. we really progressed a lot of this work recently like the rest of the discipline where i would say previously there was maybe more of a values based approach to these issues. we now have a more value-based approach and what i mean by that is we've really focused on how esg factors create investment value rather than bring social or ethical values
into play. our esg and organizer on these three pillars. each of them has their own work stream, but they do intersect with one another and contribute to work and this engagement has been shown to to contribute to long term performance the second relates to how we incorporate it into due diligence and ongoing monitoring of our investments. our belief here is this will give us a more complete view of
risk and opportunity as we consider investments. in the third pillar, esg collaboration and communication for sustainable economy. this is really how we work with the broader financial services within the system, with different peers, our managers, service providers to advance our objectives and also communicate with our stakeholders. this is important to create a market, a financial market, contribute to a financial market that focuses on sustainable long-term value. i'll skip here for slides 3-6, but just put them up briefly. they really highlight the key actions that we've taken since 1988 as part of our esg platform. it was in 2018 when we formalized our efforts and the past three and a half years, we've seen an increase in the
breath and depth of our work in this area. really, at the same time when i think the market was paying increasing attention to esg issues. over the past year, we've made progress on each of the three pillars and i'm going to highlight a few actions under each of them starting with the first pillar active ownership. we continued, you know, through 2020 and 2021 to enhance our corporate governance guidelines regarding our activities. including some updates we made in february to hold boards accountable for their racial and ethnic diversity composition in addition to their gender balance and so we introduced a voting guideline to vote against certain directors if the boards fail to acknowledge the importance of diversity, failed to have
diverse slades of candidates that they considered for nomination to the board. we also introduced the voting guideline to vote against directors of companies that they failed to manage a material esg risk and that could include a risk like climate change. we supported a variety of shareholders on climate change as well as informational equity audits and what's interesting about both of those cases is there's examples of climate and diversity related shareholders proposals where management of company has supported proposals and this is pretty atypical most of the time. management recommends voting against shareholder proposals. an interesting evolution in shareholder activism over the past year. we, you know, joined a majority
of shareholders in voting out three directors and exxon, so this is a pretty news worthy event in terms of investor activism where a san francisco-based hedge fund proposed an alternate slate of board candidates with experience in innovation and despite having an overall position, it garnereded the shareholders support. competition continuing to be another area of scrutiny. in light of the covid-19 impacts compensation. so this marked an increase in a number of proposals we opposed
year on year. the second area there in terms of engagement, how we've continued our engagement really prioritizing these topics of climate risk and board diversity. we continue to be active and climate action. this puts together over 600 global investors we also expanded our focus and with u.s. airlines over the past year. as kirt said, we have a
collaboration with california to engage with companies that lack and over the last year, we had success in sees 14 diverse directors added at nine of the companies for that engagement activities. and, lastly, we continue to support esg related policies through public comment mechanisms, this included request for comment by the sec as well as on the chai mate portion of the build back better bill. moving to esg and investment management, we really focused the last year on expanding the breath and depth of the way we integrate into our investment
due diligence underwriting and also the ongoing monitoring of our investments. as kirt mentioned, we put in every recommendation that goes to you, the board outlining risk opportunities so that's for all new investment remgszs. we implement that process, but we also sort of took a step back and work with each asset class to manage our relationships and conducted deep dive reviews of these managers, really outside of a specific fund commitment, but the goal here was to better understand what they're doing, understand amongst these managers that are currently
important in our portfolio and likely will continue to be important relationships for us. these conversations focus on two things. one was how well they integrate factors into the investment before they run and then, two, what is their approach and so we introduced internal. review these results and the goal here is to update these on an annual basis. of this is part of our approach to recognize that each manager is at a different point in
new relationships this year which is the leading framework for real estate. we also joined the opa private equity working group and a few other initiatives. we're awaiting those rules and that's where we've attached this item and really communicates our problem and plans towards net 0. so i won't spend a lot of time talking about this or rather
fit within them and it includes the ways that we integrate climate into our active ownership and engagement actives. our climate as well as external collaborations and commentary related to climate and climate risks. i think all three of these areas aren't specific. so rereally need progress in all of these areas as well as the progress on the regulatory front and technological development front.
in measuring and addressing climate risk, but ultimately, it's to achieve our net 0 emission and make our investment across the port foal combroe that are consistent with net 0 by 2050 pathway. what this means is that we're comfortable that each of these investments is resilient or positioned for supervisor risk adjusted returns in a world that's decarbonizing and needs to further decarbonize. we think that this means that there's going to be certain portions of the portfolio that may be in climate it also
report we're introducing what we think are two aggressive goals and one is 50% reduction by 2025. this succeed, we're following that is a 65% reduction by 2030 and the goals currently until data becomes available for other asset classes. you can see from the chart there on the left, on the blue line representing that public equity and fixed income
portfolio. it's increased by 37%. it sits below our policy benchmark the data availability and other asset classes is a priority for us. one of our 2022 objectives is to really work within the broader alternatives investment industry. it's working on a variety of frameworks, on measurement tools, recording tools to get carbon footprint data for assets and classes. we can estimate the carbon footprint for our private equity portfolio and this is work we've done using resources. we're able to estimate this to
be about 44 equivalent per million dollars in revenue generated by a portfolio. this would sit about 66% lower than our public markets combined footprint. so based on our rates to technology, in that portfolio, you can see here we can estimate it's a very low carbon intensity portfolio currently. but we do want to get better data to have a more exact number there. so the full time action plan is attached. additional details on all these areas. it is meant to be a dynamic burden for us and something we will revisit each year and make updates to and attach as a similar item for that annual
update. i will pause here and we can take any questions on the esg program before we move on. >> president: any questions? as you know, we took item 10 moved to next month and items 11, 12, 13, and 14 are continuations of the existing policy, correct? >> so the only new one was 10 and we're going to get a little more information on that. >> just a quick clarification. >> president: okay. thank you. i think there was so that's over until next month.
again. any questions from the commissioners? >> this process will be going on -- it's been going on for a couple years now with many more years of work to be done. i'm trying to determine how much risk in our overall investment operations may be affected by when we decide not to invest in a particular area. it's something we're going to have to figure out and measure and monitor. it's a great clause. we just have to realize if there's an unexpected effect. if there's a cost, we just have to acknowledge that upfront. it's a measurement we're going to have to work on over the next many years. thank you.
>> okay. thank you. >> president: if there's no question from commissioners, call for public comment. >> secretary: thank you. callers, if you have not already done so, please press star. moderator, do we have any callers? >> madam secretary, there is one caller on the line. >> secretary: thank you. caller, please state your name. your two minutes begins when you speak. >> caller: hi everyone. this is david paige. i'm glad to get to hear your voices if not see you in person again. my comments are pretty much the same like the last year and the previous year. i'm sorry to sound so critical, but i know you guys have done a lot of work and it's obvious you're really putting a lot of
effort into your job. but there's just too little too late with the fossil fuel die vestments and not enough focus on the 's.' in the esg. i think i'm maybe being too critical and if we took a poll of all my fellow retirees, they would say, we don't want any of that esg, sri stuff, we just want the roi and we don't care how unethical we get, you know, the investments involved and just bring us the money. so what i would like to propose is that the deferred comp people gave us an example earlier about how to do outreach. why not do some outreach to retirees and active employees about is there some type of
interest or concern about these issues and set up some way of taking comments, you know, from people money is involved in this, retirees and employees. i'm sure you can figure out how to do it. you know how to do outreach as you demonstrated earlier in the meeting. anyhow. that's my two cents. more outreach and more education about what is considered socially responsible and what's considered unethical. thank you very much. >> secretary: thank you for your call. moderator, are there any other callers? >> madam secretary, there are no more callers on the line. >> secretary: thank you. hearing no calls, public comment is closed. mr. president. >> president: yes. i'm going to ask the board, do
any of the board members have anything on items 11-14. ? do you want to take them as a group or individually? i'll entertain a motion on that. >> commissioner: let's do them as a group. >> president: is there a second? >> commissioner: second that. >> president: okay. moved by commissioner helfod seconded by commissioner gundy. any other commissioners? public comment, please. >> secretary: a reminder to callers, press star 3 to be added to the queue. >> there are no callers on the line. >> president: role call. >> secretary: [roll call]
and positive leadership. i appreciate it. >> thank you very much. all echo those sentiments very strongly. >> secretary: thank you. item number 15. discussion item, chief investment officer report. >> commissioners, i'll be very brief here because i know there are some very important action items ahead. including the s&p 500 and dow and nasdaq. and despite the appreciation and russing assets, the u.s. economy did slow during the third quarter as a consequence of the ongoing spread of the delta variant along with lingering supply chain bottlenecks. meanwhile, the backdrop energy prices rose over the end of the month with oil crusting about $85 a barrel. with that as a backdrop spur
assets in the aagree gate positive 1.67% in october. returns were led by public equity which we learned approximately 4.12% for the month. absolute return and real assets were all positive for the month. private credit and fixed income were down modestly for the month. i won't focus on the fiscal year to the date. however, for calendar year to date, ten months finished with the calendar year and estimated 24.4%. results to date have been led by private equity which has returned an astonishing 51.1%. however, real assets, public equity and private credit have all produced double digit returnses over 15%, 16%, and 14% . asset return is up 3.7% while fixed income is down.
for reference, this is an important reference, this is a 16.4 portfolio are estimated to have returned about 7.1% and 10.8% respectively. again, we've returned 20.4% over the year. at the end of october, assets are estimated to be about $36.6 billion. the report itself has more data in terms of the actual composition among asset classes. turning to updates on board approved investments. i have six announcements. five of which are noted in the text. the sixth however closed after the cio report. at its meeting on october 8th, 2021, the retirement board approved and closed investment up to $21 million co-invest fund of $20 million in project
metal co-invest fund 2021. investments classified as a co-investment in spurs third co-investment. next, at this meeting on closed on october 15th. next, at the same meeting, an investment of up to $300 million trust funds. initial investment of $50 million. staff in conjunction to traufrj into this investment.
the investment is classified within the spurs public equity portfolio. is third overall investment with arrow street capital our source investment of 25 closed and october 29th. adventure aptal project. next at its meeting on october 13th, the retirement board up to $25 million to eclipse early goeth fund. finally, this is not in a document, it was closed after the document was produced on its meeting on october 13th. the retirement board approved
in closed investment strategic investment partners five. investment of $75 million closed on november 5th, 2021. the investment is classified as an investment with the spurs credit and third investment with hps investment partners. in august, i am pleased to announce we've made a conditional offer and i hope to be able to share more details at our next meeting and as noted last month, we are in the power for management positions within public equity, private credit. absolute return, venture capital and real assets. those recruitments are ongoing
with quantity and the quality of the applicants thus far. finally, i want to remind everyone that our next investment meeting is next wednesday, november 17th at 1:00 p.m. the focus of the meeting will be on the investment of the recent regulatory changes in china. staff will be joined by melissa ma, cofounder. and gabby santos global market strategist with jp morgan, global market insights. the two have put together some great material and will present it next wednesday. that's all i have. >> president: okay. thank you very much. public comment at this time? or any commissioners have any questions or comments? none. public comment, please. >> secretary: thank you. a reminder to any 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. >> secretary: thank you. hearing no calls, public comment is closed. mr. president. >> president: thank you very much. kurt, thank you very much. it looks like an interesting meeting. next item, item 16. >> secretary: item number 16, action item. 2021 review and selection of economic assumptions. >> good afternoon, commissioners. as you know, kyron presented their recommendations for their 2021 august meeting. they had a followup at the october meeting. they presented some negative scenarios and bill is going to bring out those august recommendations and both bill
and ann are here to answer any questions as am i and i'm looking forward to the discussion today. thank you. and action. thank you. >> good afternoon, commissioners. this is our october presentation reviewing what we had recommended in the august meeting. where we reviewed all of the economic consumptions and so our recommendations were to reduce the discount rate from 7.4 range and we gave three options. the funded status measures there are proximate because they're taking into account the access and not partaking any participant experience changes in membership. in the other economic
assumption changes were did we propose any changes. our assumptions are inflation of 2.5 wage inflation with three and a quarter and our amorization payments grow three and a quarter to match wages. we also recommended some amorization and if you adopt a significant change, we would phase in that over five years to match the assets moving so that the increased costs can be matched up with the register of the exceptional investment returns. and then, the remaining amortization, we were looking to accelerate to five years including the charter changes which are already relatively
short and look at amedical report amortizing any new changes and help us not use up the surplus as quickly as we otherwise would. in october, we presented some projections with negative investment scenarios so we can look at name packs of these different discount rates in those scenarios. with that though, i'm happy to take any questions. we can pull up any of the projections we had done if there are questions or if you would like us to illustrate any of the dynamics. >> president: any questions from the commissioners? any comments?
20 to 30 year period. we are focused on the average. the 7.4 does not fall within that range which prompted us to recommend the discounted. >> sounds like you said 7.4 is not reasonable? you do not consider it reasonable any more? >> based on this average, we are recommending that you reduce it. we haven't come out and said absolutely it is not reasonable, and partly because of the napc assumptions. >> that answers my question.
whatever you want to continue on with, police say so. i recall what was said not just what was written in april or june or july. i should say what was said by board members in the motion that was adopted. >> can you go back to that previous slide, please. there is the napc at the bottom. you are showing 6.4 to 7.2, correct? >> that is the average of the assumptions including n e.p.c. it is 6.9 to 7.89.
>> thank you. >> we are open to suggestions. >> i personally think that the reduction from 7.4 to 7.2 will be in line. happy to support that. >> are you finished? >> i concur with you. after reviewing the numbers and looking at the last two presentations, i would support reduction from 7.4 to 7.2 as well. >> is that a motion? >> i appreciate the brevity of getting to this point compared to where we have been in the
past. more than happy to make the motion to reduce the discount assumption from 7.4 to 7.2. >> thank you. >> second. if this is a motion, i second. >> okay. can we have the motion include not changing the other economic assumptions and changes to the amortization and focus in on the reduced discount rate from 7.4 to 7.2. can that be included in the motion? >> i don't see why it can't be. i would include by reference. >> thank you. >> at the requested action on the calendar sheet, there is the column that has the check marks what we were asking under the 7.2 proposal.
>> we were asking 3.25. price inflation 2.50. if discount is 7.2% reduce amortization period for the assumption changes and losses to five years and while 100% funded net surplus reamortized each year over a 20 year period. that would be the entire package, so to speak. >> the motion would be amended to include the august meeting recommendations, correct? >> yes, for the 7.2%, yes. >> 7.2 then include your other
recommended requested adjustments? >> except for the phase-in amortization, which would be triggered only at 7% or lower. everything on this sheets except for that. >> i amend my motion. jay will cleanup that. >> absolutely. the discussion was not that difficult, but certainly the motion is difficult. thank you. >> based on the amended motion to include everything except for the phase-in. i second. >> thank you very much. we have a motion. any further discussion on the
motion? if not, public comment, please. >> thank you. reminder to callers press star 3 to be added the queue. any caller on the line? >> there are no callers on the line. >> thank you, public comment is closed. >> roll call. >> commissioner bridges. >> aye. >> commissioner driscoll. >> aye. >> commissioner gandhi. >> aye. >> commissioner heldfond. >> aye. >> commissioner safai. >> aye. >> president casciato.
>> six ayes. motion passes. >> thank you, commissioners. >> next item, please. >> item 17. action item approve request to adjust industrial disability retirement allowance to 84% until qsr. jon c mcmay hon. >> discussion? i will entertain a motion on this. >> so moved. >> commissioner hell fond. >> second. >> second by commissioner driscoll. >> discussion? none. public comment? >> thank you. do we have callers on the line?
>> madam secretary, there are no caller on the line. >> hearing no calls, public comment is closed. president cassie auto. >> roll call, please. >> commissioner bridges. >> aye. >> commissioner driscoll. >> aye. >> commissioner gandhi. >> aye. >> commissioner heldfond. >> aye. >> commissioner safai. >> aye. >> president casciato. >> aye. >> thank you. we have six ayes. motion passes. >> item 18. action item. approve request to adjust industrial disability retirement allowance to 60% until qsr.
reginald prasad. >> if there is no discussion i entertain a motion. >> so moved. >> moved by commissioner driscoll. >> second by commissioner bridges. if there is no discussion, public comment. >> moderate tore any caller on the line? >> madam secretary, there are no caller on the line. >> thank you. no calls, public comment is closed. >> thank you. roll call. >> commissioner bridges. >> aye. >> commissioner driscoll. >> aye. >> commissioner gandhi. >> aye. >> commissioner heldfond. >> aye. >> commissioner safai.
>> aye. >> president casciato. >> aye. >> we have six ayes. motion passes. >> next item, please. >> item 19. discussion item. personnel committee report. stansberry is not here for the presentation. we accept as written. >> being a member of the committee i can comment that we had a good meeting. >> i concur with that. public comment. >> thank you. moderator any callers on the line? >> madam secretary, there are no callers on the line. >> thank you, public comment is
closed. >> next item, please. >> item 20. discussion item. conference expense report for the quarter ended september 30, 2021. >> this will be the last time we call it a conference expense report because we have since we returned to the office november 1st. we lifted the travel ban for business travel for staff as well as board members. as far as board members and staff are comfortable and appropriate expense and travel we intend to approve travel to interview due diligence with managers, advisory board meetings, conferences. hopefully for the next quarter we will see more activity as far as travel-related expenses. this report shows during the first quarter of our budget we had just over $2,000 that we
paid for registration for virtual conferences for staff. like i said, we will change the title of this report back to travel expense report. >> great expense management, jay. >> we have a lot of budget savings. commissioner safai should be very proud we saved so much money. i did want to basically i have had inquiries from a couple board members whether we would approve travel. it with what you are comfortable with. if it is appropriate, we certainly will register and get you to conferences that are appropriate. i just want to make sure we officially made that announcement to you and we will make it to staff, also.
i will take any questions. it is only $2,000. yes, very frugal over the last quarter. >> thank you very much. >> scrooge. >> if there is no other discussion, public comment. >> thank you. moderator, any caller on the line? >> madam secretary, there are no callers on the line. >> hearing no calls, public comment is now closed. >> next item. >> item 21. discussion item. executive director's report. >> i have two items. one is a plea to the board. under your policy you are to do a board self-evaluation survey. the governance consultant who you met with earlier has prepared the survey. we typically have that approved through the governance
committee. we would really like to have a governance committee between now and the end of the year so that this self-evaluation survey can be approved, distributed to the board from the survey is where the board focuses, the governance committee focuses on topics for the retreat. i would just basically let you know this is going to be sept out. it is now pending the governance committee meeting. >> it is way past due, right? >> it is a difficult period of time, but, yes, we definitely need to get the governance committee scheduled for a meeting between now and the end of the year. >> maybe the committee could do a single item meeting. >> well there is a laundry list
of things pending before the governance committee meeting. if they want a short meeting we could do it for this item in particular. update to the return to the office. staff has returned to the office according to city policy in office work for two days per week. that started last week. we also started this week on tuesday and thursday opening the fifth floor reception area to our members to come in and either schedule appointments to do services or to in the case of deferred comp program if they had a scheduled appointment they could do in person with a voya counselor. there is a lot of people that
have not been back in the office for 18 months. there is an adjustment we are making. we are focusing on safety. i will say that relative to how many folks have been away from the office i believe we are glad to see more people in the office. we will continue to judge or monitor the demand for in-person services like member services because we are still sensitive to the fact that we want to try to make sure members understand that there is a 24/7 access on the website to allow services they are asking for. this is an educational opportunity to drive as many of those folks over to the website
to conduct transactions. we will expand that. >> this is just an editorial comment. my personal opinion. we evidenced the back to office with the departure of xcio coker. in one of his bill of particulars what he didn't want was to go back to the office, which is how is the condition by the building and everything? >> the neighborhood has not changed. what we do have a commitment from the mayor's office that she has put additional resources to monitor from 7:30 a.m. to 7:30 p.m. monday through friday
ambassadors and city employees presence on the streets to make sure the staff can get to the office and get from the office safely. there is a commitment that unfortunately the neighborhood and the folks who hang out here have not really changed over the pandemic. that is difficult. to your first comment, i hope that the day comes when the mayor's office defers to the department to determine what the best business model is as far as remote working. right now there is a blanket city-wide required policy that ever employee work in the office in person in the office at least two days per week. that doesn't fit us very well. i am certain it doesn't fit other departments to a less extent. i am looking forward to the day where they will again sort of
the way it was pre-pandemic defer back to the department to determine what the accident model going forward -- the business model should look look as far as remote working. >> between us and health service systems, that is a major portion of our constituency we are serving from that building. >> correct. >> actually, i don't believe health service system has opened their member services area yet. we have been trying to coordinate with them as far as what our plans were, and when the city, basically, established the requirement that everyone has to return to the office two days per week, they completed open enrollment without member services. it was completed online. i believe they completed it last year successfully.
i heard it was successful this year. they are trying to the 24/7 7 access online. you are right. i don't know that there is a high demand as there was before for face-to-face counseling. it is an important decision and they want the attention but i believe anecdotes tally folkses are not complaining having interviews via teams or web ex meetings hopefully we can have the discussion as a department going forward to determine what the model would look like for all staff, hr, it, operations staff all have different requirements as far as customer
service, what the industry. i know in the investment side we are afraid that, you know, with people having the opportunity to work exclusively from home and us having two damin mum that could impact -- two days minimum that could impact joining us as new employees or stay. i hope we don't get to that point. i hope soon we have discretion back to design that model that you and i talked about and we talked about returning. >> our good friend just called me to say health services is open tuesday and thursday. >> they followed our lead or we followed their lead.
>> we lead. >> as long as we are coordinated that is all we can hope for. >> i have a question. i know our desire for good real estate space particularly for the full-time employees who work there as well as occasional visit from a member, with the office space vacancy over 20%. whether or not we have a very useful desire to execute to get control of our own office space which we talked about for many years, whether that becomes a priority asking our investment officers to look for good real estate to meet our strategic needs servicing our members as well as a good effective workplace for our staff to work at. whether we moatly or when they -- remotely or when they come to
the office including parking, bart transportation. this is a good time to look at that issue. >> i would like to concur with you, jeff. totally concur. >> we recognize there is a vacancy rate. we need to weigh that the city wrote the lease which expires in this building in 2024. we have an out without penalty after the fourth year which will pass. now we find other space to rent. we are aware that there is much more, you know, in a different setting much more appropriate space to lease. then we have no way out of the existing list unless we purchase. before there was direct assignment and i think now there
is an as signment for real estate managers to keep eyes open. it is over a year and a half since ed and i looked at the possibility of the buildings. we are seeing a lot of real estate coming up for sale and it might be the time we focus on it. i think we need to hire whoever succeeds me to get that done because i have already tried to do it twice, and that is all i have in me. hopefully we can get something going. i agree. not only for our members but for our staff in particular. >> the safety of the staff is paramount wherever we go. >> agree. >> please let our real estate friends and staff know it is a strategic acquisition.
that affects the price we would be willing to pay and negotiate. not a normal real estate investment firm. thanks, scott, i appreciate it. >> mr. president, i am happy to be part of the if you want to assign someone to work on this issue with the executive director given the work that i have done with real estate in the city. i am happy to help with that conversation. >> thank you. i think maybe you guys can sit down offline and get a historical briefing. >> i will take you up on that, commissioner. >> mr. president i have to leave now. i wanted to let you know. >> thank you very much. appreciate it.
public comment at this time. >> reminder to callers to press star 3 to be added the queue. any callers? >> madam secretary, there are no callers on the line. >> thank you. no calls, public comment is closed. >> next item, please. >> 22. discussion item. retirement board member good of the order. >> i have one item good of the order. anybody else? >> a quick one, also. >> go ahead. >> i want to encourage everyone to attend the ic on the 17th. kirk and bill, we tried to make them meaty where we are investing our money. this one is very tropical and it
has a lot of serious issues around it. hopefully, we all attend. >> thank you very much. i will be there. i would like the issue of special needs trusts to be reviewed by our administrative staff. i went through an issue this past year regarding special needs trust. i would just say publicly it is something on my mind. it is something that i would encourage staff to review because it is a very challenging time for any family and also for the person that is disabled and remains the subject of the special needs trust. thank you very much.
that is all i have. anybody else have anything? >> public comment now. >> thank you. moderator, any callers on the line? >> madam secretary, there are no callers on the line. >> thank you. public comment is closed. >> if there is no other business, we are adjourned. >> thank you. >> thank you. >> happy thanksgiving to everybody.
every single slaver has its own recipe. we have our own -- we move on from there. so you have every time a unique experience because that slaver is the flavored we want to make. union street is unique because of the neighbors and the location itself. the people that live around here i love to see when the street is full of people. it is a little bit of italy that is happening around you can walk around and enjoy shopping with gelato in your hand. this is the move we are happy to provide to the people. i always love union street because it's not like another commercial street where you have big chains. here you have the neighbors. there is a lot of stories and the neighborhoods are essential. people have -- they enjoy having
their daily or weekly gelato. i love this street itself. >> we created a move of an area where we will be visiting. we want to make sure that the area has the gelato that you like. what we give back as a shop owner is creating an ambient lifestyle. if you do it in your area and if you like it, then you can do it on the streets you like.
>> my name is marcia conraers and i'm with mission housing development. one of the co-developers for the balboa upper yard, alongside related companies. i would like to welcome everyone to the groundbreaking ceremony for the balboa park upper yard. we are excited that you have set time aside to join us and to alongside related companies. i would like to welcome everyone to the groundbreaking ceremony for the balboa park upper yard. we are excited that you have set time aside to join us and to celebrate along with us. we're standing on the ground where in about approximately two