There are no active considerations right now to reduce the indiscernible 31 , excuse me. The point is that if you thought that equity returns were not so good tactically, you could sell the futures now and buy the long treasuries without going through the option business. You could rebalance the portfolio right now. You have the discretion to do that. Just like you had the discretion to go to 6 treasuries that you didnt do for whatever reason. Well, we look at it that we are defensively positioned right now. Okay. And you dont thank we need to become more defensive tactically in the near term . No, we dont. Okay. Because in your memo you have mentioned how in the markets went down a great deal in 2007, that everybody thought it was going to bottom out and it went down greatly again. So it can happen again. I think that you mentioned how in your career and probably amongst all of us here you have the longest investment career but theres other people who said no one investing today has ever lived with the possible recession that may come. One of our managers said that at least 20 trillion has to put in the economy of the world to maybe just stop things from sliding. Umhmm. Will that occur . Will it be necessary . I believe that much, much more stimulus is going to be needed than we have spent on it so far and 20 trillion would not surprise me at all. If we look, there are right now we began this crisis with about 170 million jobs in the u. S. And comfortably 50 million to 60 million of those jobs are going away. And there was a study yesterday that indicated that 40 of the jobs that will be lost will not come back, okay . So theres going to have to be a whole lot of stimulus for quite a period for quite a period of time. At least for as long as we dont have a vaccine or a treatment is that the economy will be ailing for a while. Were not going to get back to previous base for at least several years. So tactically were going to have to find new ways of creating how we do business and how we enjoy our lives. So tactically you dont think that we need to do anything more . I mean, were always trying to do things but to reduce our exposure more, the fact that we went to 31 is the big reason why our returns by reducing the equity and bringing on the absolute return among other things, that was one of your objectives was to cut the draw down in half thats right. The question is tactically, we do not need to do more . And president driscoll, youre exactly right, we did that strategically through our Asset Allocation. You said it exactly right. We had planned for an event like this while still thinking that we could achieve 7 plus over the long term and protect us on the downside. As far as doing it tactically, something beyond what we have done strategically, which is really significant to have a 31 weight to public equity. Thats a pretty significant, strategic shift relative to our peers to protect on the downside, and to do something tactically introduces uncertainties about timing. We have thought six or seven or eight times about doing something tactically to take up treasuries more, even recommending levered treasuries and we have discussed that at least half a dozen times over the last month. Im really, really, glad that we havent done that. The stock market is up 20 in that time. Thanks for all of that. I just wanted to say consciously that were not doing anything more significantly tactically, and continuing with what were doing well now and trying to meet all of the cash calls from our private security. Let me just point out that this is not such a big issue with me, but when you and alan you do the same thing when you talk about how were doing compared to our peers, believe it or not, i think that is in one sense very irrelevant. Because when we have the problems meeting our bills were not able to ask our peers to pay. Right. This is the wrong footing. Its what i call a base bias. So i wish we would stay away from that, okay . And tactically we can do things. So whoever our really good investors, theyre different we are. And maybe we should try to find out what theyre doing and copy that. Very good, commissioner, thats a great point. And i totally agree with you that benchmarking yourself against peers is really a limited value. We have our own cash flows and our own characteristics and we have our own philosophy towards investment. And even putting aside that, to have only 49 in public plus private equity meaning, growth assets, only 49 for a pension plan, thats low. To achieve a longterm return, thats a modest number. If we had no cash flows, and we had no political sensitivities about what our shortterm returns would be, rather than that 49 to public and private equity, i recommend that it would be 100 . Yes. That is one reason why ive asked our consultant, mr. Martin, to see if he could get any kind of a breakdown of the managers and their Asset Allocations to see how theyre doing. Again, just a way of we are closer to them than we data relative to our own, but even relative to our own, 49 is light. Yeah, but again the question is relative to what can we do how much risk do we want to take. Thats why this big drop and tactically its very uncomfortable. We dont like losing i say we dont particularly like volatility and preserving capital. If we can accept it, hey, its okay. Its when it triggers a change in contributions, thats when people start asking us very pointed questions. It is with our success in being realistic about uncertainty particularly and risk that were able to then tell our sponsor this is why to please support our budget to bring on more and better talent and to compensate them accordingly. And president driscoll, youre right, we all dislike volatility. But videvolatility only matterse day of a year, june 30th. The volatility on to march 23rd is irrelevant, what is our return on june 30th is what is relevant. Thank you. One, this is a possible action item and theres no motion on the floor. If someone wants to make one. I will note. Staff has not made a recommendation. But commissioner stansbury, you asked for this to be put on the calendar and to think tactically and strategically at all times. And i will contact you if you want to continue on with this subject before we call for Public Comment. Thank you, commissioner driscoll. From my perspective, you know, i think that having purchased puts back in february before everything began to unravel and then we had sold at some point as the market kind of unraveled, it would have been very beneficial to the pension system. Trying to see those things sometimes can be very difficult. And if youre on the wrong side of it, its hard to justify 160 million loss. Of course we dont have to do the full 8 and we could do a smaller portion thereof, but im not going to make a motion for that. And it sounds like from everything that i have heard from staff today that you feel like you have the flexibility and the tools that you need to protect this portfolio. But i would say this and i want to drive this home, echoing what commissioner discoo driscoll sad what we touched on earlier is that if were only down 20 and everyone else is down 30 , thats great. But no one is going to care. Theyre only going to care that were down 20 . And 18 , 20 , 24 , it doesnt matter, the taxpayer, our sponsor, those people and, the employees and the members contributing, they are the ones that will care that were up or down 20 . Its impossible to run an Investment Fund and have down years. Its just impossible. This is a unique situation. And i again, i want to just encourage you to think defensi defensively for the portfolio. Other than that im not going to make a motion. And thank you for putting all of this together. This is probably still one of the most important conversations that we had in this fiscal year. This is helpful. I would like to note that if we bought puts 20 out of the puts on february 20th, right now markets are only down 14. 9 . And that we wouldnt have made money on that trade. But you wouldnt go 30 down and continue to sit on it. You would have closed out those positions and taken that money off the table. On june 30th we would not have touched it. I very much disagree with that. In fact, i would personally need a motion to take some of that money off the table to help to protect us. I think that indiscernible had an expiration, i think that right its not a good decision. So, anyway, thank you for putting this together. And it sounds like you have the flexibility to do other things in puts. So, again, thank you, and just please be mindful of that. I understand. Thank you. Any Board Members with a motion before we go to Public Comment which is required. Hearing no motion, madam secretary, call for Public Comment. Clerk members of the public who are currently in the queue who wish to provide Public Comment please dial 1, and 0. When it is your turn to speak, you will be prompted automatically. Those who are not in the queue, please follow the instructions shown on the screen. Moderator, do we have any callers on the line . Madam secretary, there are no callers on the line. Clerk thank you. President driscoll . Okay, there is no motion and therefore we go to item i have a question. I have a question. Its al. Yeah, to bill do you think that you need a motion . No, we would have calendared it as a recommendation if thats what we were requesting. Okay. And i am just asking based on the entire conversation that just took place. Okay, thank you. Thats it. That takes us to item 8. Board members, items 8 and 9 and 10 are almost identical, they are three terminations but they must be considered and voted on separately. Very good, Board Members, item 8 is a recommendation to terminate a. Q. R. , an International Equity strategy that weve had for about 13 or 14 years. And it has performance that has been in line with the benchmark. Almost exactly. And youre familiar with our efforts to increase the excess returns of the public equity portfolio which we have been able to do with our recent hires. Kurt . Thank you, bill. Just to reiterate, the staff is recommending and to be supportive of the termination of our Investment Management agreement with a. Q. R. Bill noted they have been managing capital for us since 2006 woo. Have written a brief memo with our rationale and if anyone would like to make comments ill simply turn back to the board for questions. Kurt, let me just this does tie together somewhat with the last discussion that we had on Asset Allocation and with the hiring of the manager that we previously hired and that is to bills point that the tools that we have to achieve the 7. 4 , joe, i couldnt agree more thats what were trying to do. It involves not only the Asset Allocation and the diversification, but the selection of managers that add value. And managers that hug the index arent going to add enough value over time. And you previously hired a number of managers that are more differentiated, higher active share in industries that have Better Future growth potentials. And so when you do that, you need to get the money from somewhere or youre going to change the overall allocations. So all three of the managers that are being recommended for termination are not bad managers and theyre not on being terminated because they havent delivered but they really dont fit the strategic portfolio which is to add more active shares. And id say the same about all three of them that were fully supportive of this because it is consistent with the longterm strategic intent for the portfolio. Board members i would add that this is in line with our reduce allocation to public equity in the last two months. So, again, its not something that is reflective of the managers, its reflective of the needs to reach an end of the staff desire to have public equity disclosure. Thank you. You both said it very well. Unfortunately, or perhaps someday the reporters who like to write up what we do only indiscernible and with that in the newspapers as opposed to the full explanation why were trying to pursue greater active share with other managers. Anyway, well said, alan. Thank you, ana. Anymore Board Members, if not, a motion is in order. I move to terminate. A second . Ill second it. Madam secretary, call for Public Comment. Clerk president driscoll, im sorry. Members of the public who are currently in the queue who wish to provide Public Comment, please dial 1, 0, when it is your turn to speak and the system will prompt you automatically. Those of you who are not in the queue, please follow the instructions shown on the screen. Moderator, do we have any callers on the line . Madam secretary, there are no callers on the line. Madam second, roll call. Clerk president driscoll . Aye. Commissioner bridges. Aye. Commissioner casciato. Aye. Commissioner chu. She had to go to another meeting. Clerk absent. Commissioner heldfond. Aye. Commissioner safai. Aye. And im sorry, i have to leave the meeting now. Clerk thank you. Commissioner stansbury. Commissioner stansbury. Hes not available. We have 52. Motion passes. I dont know that you can call it 52. You have abstention or absence. Clerk the motion passes. Next item. Clerk next is causeway and this is a recommendation to terminate a manager in the portfolio for 17 years. They have slightly outperformance and were seeking higher active share in this higher access returns. Kurt . Thank you, bill. For reasons and circumstances that weve just discussed, were recommending the termination of our Investment Management agreement with causeway. Again, we have written a brief memo that describes our rationale that we just discussed. And id like at this point to have any further input from anyone, ill turn it back to the board for questions. Ill make a motion to adopt staff recommendation. Is there a second . I move a second. Commissioner heldfond did you second . Ill second, thank you. Board members any questions . Hearing no questions, madam secretary, call for Public Comment. Clerk members of the public who you are currently in the queue who wish to provide Public Comment, please dial 1, 0, when it is your turn to speak and the system will prompt you automatically. Those of you not in the queue follow the instructions shown on the screen. Moderator, do we have any callers . Madam secretary, there are no callers on the line. Clerk thank you. President driscoll. Madam secretary, roll call vote. Clerk president driscoll. Aye. Commissioner bridges. Aye. Commissioner casciato. Aye. Commissioner chu. Not attending. Commissioner heldfond. Aye. Commissioner safai. Not attending. Commissioner stansbury. Aye. Motion passes. Be advised that its getting late and commissioner chu had to leave at 3 00. So, thank you. Next item. Very good, Board Members. Next is q. And a. And this is a core strategy that has underperformed in the 12 plus years for which we have been invested and they have increased amount of competition for Data Analytics for engineering talent like google and facebook. There are some firms that we still think highly of but its become a much more competitive space for engineering talent. So we recommend termination and were looking for more Company Specific risks than this company can provide us and higher shares as well. Kurt . Thank you, bill. Again, staff is recommending that we terminate our Investment Management agreement with 2ma. And before i turn over to the board i want to acknowledge and to thank each of the three firms for their partnership and contribution over many, many years. We have valued them. So with that, again, we have written a brief memo further describing our rationale and ill turn back to the board for recommendations. Ill make a motion to adopt staff recommendation. Leona, and i second. Calling for Public Comment. Clerk members of the public who are currently in the queue and who wish to provide Public Comment, please dial 1, 0, when it is your turn to speak. And the system will prompt you automatically. Those of you who are not in the queue, please follow the instructions shown on the screen. Moderator, do we have any callers on the line . Madam secretary, there are no callers on the line. Thank you. President driscoll . Aye. Commissioner bridges. Aye. Commissioner casciato. Aye. Commissioner chu, absent. Commissioner heldfond. Aye. Commissioner safai. Absent. Commissioner stansbury. Aye. Thank you, five ayes. Motion passes. Next item number 12. Very good. Board members this is an annual update to the indiscernible portfolios and ill just leave it for comment before turning it over to david. Oh. Can everybody hear me . Yes. Very good. Board members in a moment ill turn it over to david, with the portfolio update. Through the end of february this portfolio was doing exactly as it was intended, it was outperforming bonds at very, very low volatility in the range of about 2 annualized. And had only captured 11 of the market return, market equity return in months that the markets declined. It also had more up months than the equity market and many more up months and fewer down months than the bond market. That all changed in the month of march for reasons related that we think that are related to markettomarket pricing that do not resemble the underlying Credit Investments that we experienced large losses. We think that by Holding Tight well be money good meaning that well earn money and return of principle on these investments. And ill ask david to take it from here. Thank you, bill, thank you, commissioners. And can everyone hear me okay . Okay. Very good. We went into march of this year with about a third of our portfolio invested in credit oriented strategies and within that the meaningful allocation of about 12 to Residential Mortgage credit. This was based on solid fundamentals in an area of the credit market that has gone through a notable strengthening since the Global Financial crisis. In the weeks that followed after april 29th, after february 29th, the world changed significantly. The majority of the developed world found itself under the government stayathome orders in