San Francisco Employees Retirement System RETIREMENT BOARD MEETING MINUTES

Transcription

1 San Francisco Employees Retirement System RETIREMENT BOARD MEETING MINUTES Wednesday, 1145 Market Street, 6 th Floor San Francisco, CA :00 p.m. MISSION STATEMENT San Francisco City and County Employees Retirement System is Dedicated to Securing, Protecting and Prudently Investing the Pension Trust Assets, Administering Mandated Benefit Programs, and Providing Promised Benefits. RETIREMENT BOARD MEMBERS President Malia Cohen Vice President Herb Meiberger, CFA Commissioners Leona Bridges Joseph Driscoll Victor Makras Wendy Paskin-Jordan Brian Stansbury Jay Huish Executive Director

2 Page 2 of 17 DISABILITY ACCESS The San Francisco Employees' Retirement System is wheelchair accessible. Accessible seating is available for persons with disabilities. To obtain a disability-related modification or accommodation, including large print agendas, American Sign Language interpreters, FM sound amplification system and auxiliary aids or services, please contact Norman Nickens at (415) at least two (2) business days before the meeting. There is accessible parking in the vicinity of 1145 Market Street at Civic Center Plaza. Accessible MUNI lines are available at the corner of Market Street and 8 th Street. The closest accessible MUNI /BART station is Civic Center Station. Materials accompanying the agenda are available for public inspection and copying at SFERS, 1145 Market Street, 7th Floor. For additional information, please contact Norman Nickens, Executive Assistant, at (415) In order to assist the City s efforts to accommodate persons with severe allergies, environmental illness, multiple chemical sensitivity or related disabilities, attendees at public meetings are reminded that other attendees may be sensitive to various chemical based products. Please help the City to accommodate these individuals. The ringing of and use of cell phones, pagers and similar sound-producing electronic devices are prohibited at this meeting. Please be advised that the Chair may order the removal from the meeting room of any person(s) responsible for the ringing or use of a cell phone, pager, or other similar sound-producing electronic devices. Know Your Rights Under the Sunshine Ordinance (Chapter 67 of the San Francisco Administrative Code) Government's duty is to serve the public, reaching its decisions in full view of the public. Commissions, boards, councils and other agencies of the City and County exist to conduct the people's business. This ordinance assures that deliberations are conducted before the people and that City operations are open to the people's review. FOR MORE INFORMATION ON YOUR RIGHTS UNDER THE SUNSHINE ORDINANCE OR TO REPORT A VIOLATION OF THE ORDINANCE, CONTACT THE SUNSHINE ORDINANCE TASK FORCE. Sunshine Ordinance Task Force City Hall 1 Dr Carlton B. Goodlett Place, Room 244 San Francisco, CA (415) by fax at (415) or by at sotf@sfgov.org Citizens interested in obtaining a free copy of the Sunshine Ordinance can request a copy from Mr. Darby or by printing Chapter 67 of the San Francisco Administrative Code on the Internet, Any materials distributed to the Retirement Board (or committee) within 72 hours of the meeting or after distribution of the agenda packet to Board (or committee) members are available for public inspection at SFERS, 1145 Market Street, 7 th Floor, during regular office hours. Lobbyist Registration and Reporting Requirements Individuals and entities that influence or attempt to influence local legislative or administrative action may be required by the San Francisco Lobbyist Ordinance (San Francisco Campaign and Governmental Conduct Code sections ) to register and report lobbying activity. For more information about the Lobbyist Ordinance, please contact the Ethics Commission at 25 Van Ness Avenue, Suite 220, San Francisco, CA 94102, telephone (415) , fax (415) and web site:

3 Page 3 of 17 OPENING CALENDAR President Cohen called the meeting to order at 1:05 PM. 1. Pledge of Allegiance 2. Roll Call Commissioner Malia Cohen 1:05 PM Commissioner Leona Bridges 1:10 PM Commissioner Joseph D. Driscoll 1:05 PM Commissioner Victor Makras 1:05 PM Commissioner Herb Meiberger, CFA 1:05 PM Commissioner Wendy Paskin-Jordan 1:05 PM Commissioner Brian Stansbury Absent General Public Comment President Cohen called for general public comment. Patrick Monette-Shaw expressed his concern about the trend of the Board holding closed sessions at the beginning of the calendar, and noted the effect that had on members of the public who had to wait. He submitted the following written statement, which he represented was an accurate summary of his public comment: First, I'm disturbed about moving closed session to the top of agendas. I respectfully request you move closed session investment discussions back on meeting agendas, so members don t have to wait hours on end. Second, I want to correct the record. Last month, Kay Walker inaccurately stated the DALP investment would yield 9.4%. She misread Bob Shaw s analysis, which projected just 5.2% yield for the DALP investment. Third, as I ve testified before, ERISA prohibits inter-department investments in other City Departments. Because SFERS is supposed to follow ERISA s minimum ethical-conduct standards that apply to privatesector pension plans, this Body needs to schedule a threshold vote soon on whether investing in MOHCD is appropriate under ERISA. I believe it s a conflict of interest for this Board to invest in other City Departments. You should have that conversation as a preliminary threshold matter before considering the soundness of investing in MOHCD s DALP program. Commissioner Bridges joined the meeting at 1:10 PM. John Furlan addressed the Board in support of investing in hedge funds, including increasing the allocation to hedge funds. He also discussed reducing risk and adopting incentive fees for investment staff, to reward and encourage performance. Martha Hawthorne, SEIU 1021 and Fossil Free San Francisco, expressed her disappointment that closed

4 Page 4 of 17 session was at the beginning of the meeting, and stated that members of the public came to hear and participate in the meeting. She also spoke in opposition to investment in hedge funds, and requested an update on fossil fuel divestment and Level II engagement. David Williams, SEIU 1021, stated he was very concerned with closed session being held directly after public comment, stating members of the public had to wait to make comments on other agenda items. Sai Orr addressed the Board in opposition to investment in hedge funds, expressed concern regarding the performance and fees of the Deferred Compensation Plan, including the fees for the insurance on the Stable Value Fund, and the risk of recession. CLOSED SESSION Action Item Closed Session. Recommendations and Possible Action on Purchases of Particular, Specific Pension Fund Investments under California Government Code Section (3 investment recommendations) (Discussion and Possible Action) The Board entered closed session on item at 1:25 PM. The following individuals were present for the closed session: Commissioners Bridges, Cohen, Driscoll, Makras, Meiberger, Paskin-Jordan; Jay Huish, Executive Director; Caryn Bortnick, Deputy Director; William J. Coaker, Chief Investment Officer; Art Wang, Managing Director for Private Markets; Tanya Kemp and Edward Comerford, Senior Portfolio Managers; Justin Lo and Peter Lin, Security Analysts; Katie Porter, William Lin and Tran Ly, Deputy City Attorneys; Norm Nickens, Board Secretary; Anita Ng, Marian Kedrun, Scott McDonald (?) and Craig Beach, Cambridge Associates. Commissioner Paskin-Jordan left the meeting from 1:56 PM to 1:58 PM. Commissioner Meiberger left the meeting from 1:56 PM to 1:59 PM. The Board returned to open session at 2:40 PM and recessed from 2:40 PM to 2:50 PM. Action: Moved by Commissioner Meiberger, Seconded by Commissioner Cohen to not disclose discussion held in closed session under San Francisco Administrative Code Section 67.12(a). Ayes: Bridges, Cohen, Driscoll, Makras, Meiberger, Paskin-Jordan Absent: Stansbury Action Item Approval of the Minutes of the September 9, 2015 Retirement Board Meeting Documents provided to the Retirement Board prior to the current meeting: Draft Minutes of the

5 Page 5 of 17 September 9, 2015 Retirement Board Meeting There were no comments from the public. Action: Moved by Commissioner Meiberger, Seconded by Commissioner Bridges to Approve Minutes of the September 9, 2015 Retirement Board Meeting. Ayes: Bridges, Cohen, Driscoll, Makras, Meiberger, Paskin-Jordan Absent: Stansbury CONSENT CALENDAR All matters listed hereunder constitute a Consent Calendar, are considered to be routine by the Retirement Board and will be acted upon by a single vote of the Retirement Board. There will be no separate discussion of these items unless a member of the Retirement Board so requests, in which event the matter shall be removed from the Consent Calendar and considered as a separate item Action Item Consent Calendar a Action Item Voluntary Retirement Board List No b Action Item Decisions of Hearing Officers Michelle R. Alvis Effective Date: 6/30/14 Julia M. Angalet Effective Date: 10/1/14 Cynthia L. Haynes-Epperson Effective Date: 12/1/13 Jerry L. House Effective Date: 1/6/15 Marta M. Johnson Effective Date: 11/23/13 Ignacio T. Martinez Effective Date: 3/30/13 Q51 Sergeant II Police Q2 Police Officer Police 8239 Public Safety Comm. Sup. Emergency Comm Sewer Service Worker PUC-Clean Water 2604 Food Service Worker DPH-LHH Q2 Police Officer Police Industrial Disability Retirement Industrial Disability Retirement Industrial Disability Retirement Denied

6 Page 6 of 17 Otho M. Middleton Effective Date: 5/22/13 Armilyn H. Narag Effective Date: 5/25/13 Kevin J. Oller Effective Date: 2/1/14 Martha Y. Ortega Effective Date: PERS Sylvia A. Ortiz Effective Date: 10/1/12 David J. Rodriguez Effective Date: 10/1/14 Vivian A. Showers Effective Date: 10/20/15 Christian A. Smith Effective Date: PERS James H. Vickery Effective Date: 4/1/15 Natalie J. Wright-Araya Effective Date: 12/31/ Stationary Engineer PUC-Clean Water 2302 Nursing Assistant DPH-LHH 7540 Track Maintenance Worker MTA 8304 Deputy Sheriff Sheriff 9163 Transit Operator MTA 3279 Recreation Leader Recreation & Park 9163 Transit Operator MTA 8204 Institutional Police Officer Community College 7372 Stationary Engineer PUC-Clean Water 9163 Transit Operator MTA Denied CAL-PERS - Disability Retirement Denied CAL-PERS - Disability Retirement c Action Item Petition for Rehearing Ignacio T. Martinez Effective Date: 3/30/13 Sylvia A. Ortiz Effective Date: 10/1/12 Q2 Police Officer Police 9163 Transit Operator MTA Industrial Disability Retirement Denied Denied d Action Item Travel Requests Request Travel Approval for Commissioner Victor Makras for on-site visit to Northern Trust, September 29 30, 2015, Chicago, IL. Request Travel Approval for Commissioner Wendy Paskin-Jordan to attend Abraaj Annual forum 2015, October 20-21, 2015, Singapore.

7 Page 7 of 17 Documents provided to the Retirement Board prior to the current meeting: Voluntary Retirement Board List, Hearing Officer Decisions, and Travel Requests. There were no comments from the public. Action: Moved by Commissioner Meiberger, Seconded by Commissioner Bridges to Approve the Consent Calendar. Ayes: Bridges, Cohen, Driscoll, Makras, Meiberger, Paskin-Jordan Absent: Stansbury INVESTMENT CALENDAR Action Item Recommendation to Issue Revised Request for Proposals for Global Custody and Securities Lending Documents provided to the Board prior to the current meeting: Draft RFP William J. Coaker, Jr., Chief Investment Officer; Robert Shaw, Managing Director for Public Markets; Bo Abesamis III, Executive Vice President and Manager Trust, Custody and Securities Lending Group, and Mark Kinoshita, Vice President Trust, Custody and Securities Lending Group, Callan Associates, submitted a written report on this item. Mr. Shaw reported that in August 2013 the Retirement Board had approved the issuance of a Request for Proposals for Global Custody and Securities Lending Services. Staff issued the Custody RFP and evaluated the four Global Custody proposals received. The Board approved three finalists in January In September 2015, the Retirement Board approved the cancellation of the August 2013 Custody RFP and requested that staff present a new Custody RFP for review and approval based on changes and additional information requested by the Retirement Board at its meeting in September Patrick Monette-Shaw addressed the Board regarding past losses with Securities Lending, asserting stock had to be sold when the account was frozen in He also spoke regarding the length of time to complete the RFP process, with the RFP issued two years ago and just canceled in September. He submitted the following written statement, which he represented was an accurate summary of his public comment: I m glad Commissioner Meiberger shared the Securities Lending and Cash Management

8 Page 8 of 17 SFERS s Black Swan report with me. I m hoping Commissioners have read it. It s a jawdropping, edge-of-your-seat report. I was shocked reading Northern Trust froze SFERS cash account in 2008, and then SFERS had to sell securities to raise oh yeah, cash to pay pensions. Imagine being in a cash-crunch when a retiree wants their retirement check! In the process SFERS lost $27 million. Reading the Black Swan report, I wondered whether Commissioner Paskin-Jordan curtailed her relationship with Northern Trust, that mean-spiritedly froze approximately $250 million in SFERS assets. Was Paskin-Jordan involved in Northern Trust s decision to freeze SFERS cash account? I m hoping Northern Trust won t earn your trust again, and the relationship SFERS had with them will end. After all, how do you lose $27 million and even consider climbing back into bed with a company that screwed pensioners? Commissioner Driscoll inquired if pension fund assets had been sold to pay benefits and cover any losses in the Securities Lending program. Commissioner Meiberger requested additional information regarding liquidation of the Emerging Markets Fund to pay benefits as a result of Northern Trust freezing assets. Commissioner Meiberger inquired regarding additional pages in the RFP not provided to the Board. Mr. Huish confirmed that the contract boilerplate and required contracting documents are generally not provided in the Board materials for a RFP, but could be made available to a Board member if requested. Commissioner Meiberger discussed three areas for further inquiry in the RFP and recommended additional questions. First, he requested inquiry regarding the systems utilized to report and analyze hedge funds. Second, he requested the proposers identify whether they have hedge funds as clients. Finally, he discussed accounting for assets and inquiry regarding the process by which managers reconcile discrepancies with the custodial bank. Mr. Abesamis noted that the RFP addresses these issues through questions in the draft RFP. Commissioner Meiberger recommended reconciliation of accounts against audited financial statements. Commissioner Makras recommended additional review of the factors that delayed the previous RFP. He discussed the impact of delaying an RFP, resulting in extensions on the existing contract. He noted that the RFP resulted in firms being placed on the blackout period list and limited that Board s ability to gather information such as in the area of securities lending. Commissioner Paskin-Jordan inquired regarding information provided by Northern Trust for Commissioner Makras. Commissioner Driscoll inquired if Callan had actual experience with custodial banks that have hedge funds as clients. Mr. Abesamis confirmed that they do. Mr. Huish noted that proposers will have the option of responding on custody and/or securities

9 Page 9 of 17 lending. He further noted that the review of the hedge funds RFP is currently underway by the review team and will be completed when the Manager for Absolute Return is hired. Commissioner Makras noted that the President and the Executive Director can develop a process for reviewing the factors that delayed the previous RFP. Commissioner Meiberger recommended that Commissioner Makras be involved in the discussion. Commissioner Paskin-Jordan requested additional information regarding SFERS experience with securities lending, including any impact on liquidity. Action: Moved by Makras, Seconded by Cohen to continue the RFP at the call of the Chair. Ayes: Bridges, Cohen, Driscoll, Makras, Meiberger, Paskin-Jordan Absent: Stansbury Discussion Item Report on Investment Performance of the Retirement Fund for the Quarter Ended June 30, 2015 Documents provided to the Board prior to the current meeting: Staff Report William J. Coaker, Jr., Chief Investment Officer, Robert Shaw, Managing Director for Public Markets, and Han Pham and Vicki Owens, Senior Portfolio Managers, and Alan Martin, NEPC, submitted a written report on this item. Mr. Shaw reported that for the quarter ended June 30, 2015, the Retirement Fund was valued at $20.3 billion, providing a net of fees total return of for the quarter and for the Fiscal Year. Commissioner Meiberger requested modification of the TUCS Universe benchmark to limit it to public pension funds larger than one billion. Alan Martin noted that NEPC may have additional data for a comparison with similar large public funds, but it would be a smaller universe of funds. Commissioner Paskin-Jordan inquired if Northern Trust could develop a modified TUCS benchmark. Commissioner Driscoll noted that the TUCS universe is not owned by Northern. Commissioner Driscoll discussed the performance of Zazove. Mr. Coaker noted that staff is currently conducting additional due diligence in regard to Zazove and that process will be completed by the end of the calendar year. Commissioner Paskin-Jordan discussed the performance of Oaktree. Mr. Coaker noted that there are current issues with high yield bonds in general due to market conditions.

10 Page 10 of 17 Patrick Monette-Shaw commended staff for making materials available on the web site. He submitted the following written statement, which he represented was an accurate summary of his public comment: Listening to your discussion just now about the pre-dodd Frank banking days, Wall Street, and the Great Recession of 2008 that ushered in regulations to restrict traditional lenders from speculative lending, I m startled by what an education it is to attend SFERS Board meetings! Sometimes it s just a shocker what I hear here, which is eye-opening. Dodd-Frank? I d much prefer the good old days of the Glass Steagall Act s four provisions in the U.S. Banking Act of 1933 that limited commercial bank s securities activities and affiliations. Glass Steagall should be re-authorized! A retiree shared with me while you were in closed session, that SFERS upgraded its website and is now posting background materials online in advance of meetings. Thanks for implementing this change I suggested and nagged you about. Now you need to follow the Ethics Commission s and Public Health Commission s lead ing meeting agendas to interested-persons group lists. John Furlan discussed the performance and volatility history of stocks relative to bonds. He noted the need to rapidly address the issue of risk in the portfolio, including through the use of hedge funds. Commissioner Makras left the meeting from 4:00 PM to 4:04 PM. Action: This was a discussion only item Discussion Item Report on Managers Under Review Documents provided to the Board prior to the current meeting: Staff Report William J. Coaker, Jr., Chief Investment Officer, Robert Shaw, Managing Director for Public Markets, Han Pham and Vicki Owens, Senior Portfolio Managers, and Alan Martin, NEPC, submitted a written report on this item. Mr. Shaw reported that no managers were added to or removed from the Under Review list. Commissioner Meiberger asked about due diligence being conducted regarding Prima. Mr. Martin noted that NEPC is currently engaged in a due diligence review process, which will include a site visit. Mr. Coaker added that staff has met several times with Prima. Commissioner Meiberger asked about reporting issues with Prima. Mr. Coaker noted that staff had conveyed their concerns to Prima and Prima had been responsive and was working to satisfy those concerns.

11 Page 11 of 17 There were no comments from the public. Commissioner Paskin-Jordan left the meeting from 4:05 PM 4:09 PM. Action: This was a discussion only item Action Item Annual Report on U.S. Tobacco Divestiture and Restricted Companies: Level III of the SFERS Social Investment Policy Documents provided to the Board prior to the current meeting: Staff memorandum William J. Coaker, Jr., Chief Investment Officer, Robert Shaw, Managing Director for Public Markets, Han Pham, Senior Portfolio Manager, submitted a written report on this item. Commissioner Meiberger spoke about the risks of tobacco as a product and investment, and confirmed that the Board was being asked to approve the companies on the restricted list. Clare Zvanski, RECCSF, inquired as to what alternatives investments have been made as a result of the tobacco investment restriction, and expressed that the replacements should bring in comparable or better returns but be more socially acceptable. Action: Moved by Commissioner Makras, Seconded by Commissioner Meiberger to maintain the current policy with respect to divestment from U.S. Tobacco companies and approve the list of restricted companies. Ayes: Bridges, Cohen, Driscoll, Makras, Meiberger, Paskin-Jordan Absent: Stansbury Action Item Annual Report on Targeted Divestment in Sudan and Restricted Companies: Level III of the SFERS Social Investment Policy Documents provided to the Board prior to the current meeting: Staff memorandum William J. Coaker, Jr., Chief Investment Officer, Robert Shaw, Managing Director for Public Markets, and Eunice McHugh, Senior Portfolio Manager, submitted a written report on this item. There were no comments from the public. Commissioner Meiberger discussed the impact of Sudan divestment on the portfolios performance. Mr. Shaw noted that a comparable x-sudan benchmark is not available.

12 Page 12 of 17 Action: Moved by Commissioner Makras, Seconded by Commissioner Meiberger to maintain the current policy with respect to targeted divestment in Sudan and approve the list of restricted companies. Ayes: Bridges, Cohen, Driscoll, Makras, Meiberger, Paskin-Jordan Absent: Stansbury Chief Investment Officer Report Documents provided to the Retirement Board prior to the current meeting: CIO Report William J. Coaker, Jr., Chief Investment Officer, submitted a written report on this item. Mr. Coaker reported that the Fund was valued at $19.7 billion as of September 30, He noted there had been a difficult performance start, with -4.16% returns for the Fiscal Year to date, primarily based on the equity market but also with fixed income also having slightly negative performance. Mr. Coaker reported on the following investments that the Board approved in previous closed sessions: OrbiMed Private Investments VI, LP At its meeting on August 12, 2015, the Retirement Board approved in closed session an investment of up to $50 million in OrbiMed Private Investments VI, LP. The investment was approved by the following vote: Ayes: Bridges, Cohen, Driscoll, Meiberger, Paskin-Jordan, Stansbury Absent: Makras SFERS investment of $30 million in OrbiMed Private Investments VI, LP closed on September 15, This investment is classified as a venture capital investment within SFERS private equity portfolio and is SFERS third investment with OrbiMed Advisors LLC. More information about OrbiMed Advisors LLC is available on Searchlight Capital II, LP At its meeting on September 9, 2015, the Retirement Board approved in closed session an investment of up to $50 million in Searchlight Capital II, LP. The investment was approved by the following vote:

13 Page 13 of 17 Ayes: Bridges, Cohen, Driscoll, Makras, Meiberger, Paskin-Jordan, and Stansbury SFERS investment of $50 million in Searchlight Capital II, LP closed on September 30, This investment is classified as a buyout investment within SFERS private equity portfolio and is SFERS first investment with Searchlight Capital Partners. More information about Searchlight Capital Partners is available on SSG Secured Lending Opportunities I L.P. At its meeting on August 12, 2015, the Retirement Board approved in closed session an investment of up to $50 million in SSG Secured Lending Opportunities I, L.P. ( SSG ). The investment was approved by the following vote: Ayes: Bridges, Cohen, Driscoll, Meiberger, Paskin-Jordan, Stansbury Absent: Makras SFERS $50.0 million investment in SSG closed on September 17, SSG was founded in 2009 by Chief Investment Officer and Managing Partner Edwin Wong; Partners Shyam Maheshwari and Andrew Vourloumis; Managing Directors Antares Au, Dinesh Goel, and Tobias Damek; and General Counsel Kevin Pak. The firm is headquartered in Hong Kong. More information about SSG is available on Finally, Mr. Coaker reported on due diligence visits he and other staff were taking to China, meeting with managers, many of which are opportunistic public equity managers. Commissioner Meiberger stated he would support QFII rather than using a manager s A shares, because there would be lower fees if SFERS has its own QFII allocation. Mr. Coaker responded staff was still weighing all options. John Furlan urged caution in regard to investing in emerging markets such as China and urged the Board to continue addressing the issue of risk. This was a discussion only item.

14 Page 14 of 17 DEFERRED COMPENSATION PLAN CALENDAR Discussion Item Deferred Compensation Committee Report Documents provided to the Retirement Board prior to the current meeting: Deferred Compensation Committee Report Commissioner Driscoll, Chair of the Deferred Compensation Committee, submitted a written report on this item. Commissioner Driscoll reported that at the meeting of September 16, 2015, the Deferred Compensation Committee: Approved the minutes of the June 18, 2015 Deferred Compensation Committee meeting; Received an education session on the Self Directed Brokerage Option; Approved a proposed RFP for Target Date Fund Investment management Services and recommended approval by the full Board; Received an update on implementation of the SFDCP Loan Program; and, Received the SFDCP Manager Report. There were no comments from the public. Action: This was a discussion only item Action Item Review and Approve Proposed RFP for Target Date Fund Investment Management Services Documents provided to the Retirement Board prior to the current meeting: Angeles Investment Advisors memorandum and Draft RFP Caryn Bortnick, Deputy Executive Director and Interim Deferred Compensation Manager, and Leslie Kautz, Angeles Investment Advisors, submitted a written report on this item. There were no comments from the public. Commissioner Meiberger discussed funds available in the Target Date Funds. Ms. Kautz noted that some investments would be available only within the Target Date Funds, and were not core investment options.

15 Page 15 of 17 Commissioner Meiberger recommended inclusion of a short-term bond fund. Ms. Kautz confirmed that a Wells Fargo Fund short-term bond fund is available currently within the Target Date Funds. Action: Moved by Commissioner Makras, Seconded by Commissioner Meiberger to Approve Issuing RFP for Target Date Fund Investment Management Services. Ayes: Bridges, Cohen, Driscoll, Makras, Meiberger, Paskin-Jordan Absent: Stansbury Discussion Item SFDCP Manager Report Documents provided to the Retirement Board prior to the current meeting: Staff Memorandum and Report Caryn Bortnick, Deputy Executive Director and Interim Deferred Compensation Manager, submitted a written report on this item. Ms. Bortnick reported that at the request of Commissioner Makras she had conducted a brief survey of other large public Deferred Compensation regarding wrap insurance. Based on that survey, no wrap providers were identified who had paid out on a claim. Commissioner Makras recommended calendaring a discussion of insurance for the Stable Value Fund. Commissioner Meiberger spoke in support of the recommendation. President Cohen left the meeting from 4:36 PM to 4:44 PM. Commissioner Driscoll noted that the Board previously considered Stable Value versus Stable Income when the last RFP was issued. Commissioner Paskin-Jordan discussed reinsurance. Ms. Kautz noted that Galliard has spread the wrap between multiple providers. Clare Zvanski, RECCSF, addressed the Board regarding SFDCP investment performance, and current negative returns. Action: This was a discussion only item.

16 Page 16 of 17 ADMINISTRATION CALENDAR Discussion Item Executive Director s Report Documents provided to the Board prior to the current meeting: Executive Director s Report Jay Huish, Executive Director, submitted a written report on this item. Administrative Update: The Board of Supervisors has scheduled a Fossil Fuel hearing before the Rules Committee on October 22, Attachments for Informational Purposes: The Cortex Report of Educational Opportunities Blackout Period List Forward Calendar There were no comments from the public. Action: This was a discussion only item Discussion Item Retirement Board Member Good of the Order Documents provided to the Board prior to the current meeting: none Commissioner Meiberger discussed protecting the portfolio from risk, such as through covered options and puts. He asked NEPC to look for options to derisk the fund, particularly the equities portfolio. Commissioner Cohen noted that the Board will place a time limit on closed session and a time certain for public comment. Commissioner Makras requested additional information on Unite Here and its review of private equity managers. Herbert Weiner, retiree, spoke in opposition to investing in hedge funds, and urged the Board to seek investments that get good returns without the high costs and fees of hedge funds. Action: This was a discussion only item Discussion Item Retirement Board Member Reports and Comments

17 Page 17 of 17 Report by Commissioner Malia Cohen on her attendance at the CalPERS Diversity Forum, September 10, 2015, Sacramento, CA. Report by Commissioners Wendy Paskin-Cohen and Victor Makras on their attendance at The Carlyle Group 2015 Washington DC Investor Conference, September 15-17, 2015, Washington, DC. Report by Commissioner Joseph Driscoll on his attendance at The Hedge Fund Due Diligence Master Class, September 24-25, 2015 and Co-Investing: The Fall Summit, September 28-29, 2015), New York, NY. Report by Leona Bridges on her attendance at the CII 2015 Fall Conference, September 30- October 3, 2015, Boston, MA. Report by Victor Makras on his on-site visit to Northern Trust, September 29-30, 2015, Chicago, IL. Report by Herb Meiberger on his attendance at the PREA s Annual Real Estate Conference, September 30-October 2, 2015, San Francisco, CA. Documents provided to the Board prior to the current meeting: Conference reports. President Cohen accepted the written reports as submitted. She called for public comment. There were no comments from the public. Action: This was a discussion only item Adjournment Having no further business, the Board adjourned the meeting at 5:00 PM. Respectfully submitted, Jay Huish, Executive Director