Monday, May 9, 2016
Wednesday, March 8, 2017
1145 Market Street, 6th Floor
San Francisco, CA 94103
1:00 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
Brian Stansbury
Commissioners
Leona Bridges
Al Casciato
Joseph Driscoll
Victor Makras
Wendy Paskin-Jordan
Executive Director
Jay Huish
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) 487-7035 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 8th 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) 487-7035.
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 94103-4689
(415) 554-7724
by fax at (415) 554-7854
or by email at sotf@
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, 7th 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 2.100 – 2.160) 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 94103, telephone (415) 252-3100, fax (415) 252-3112 and web site: ethics
Meetings are recorded by SFGovTV, the Government Channel 26. For DVD copies and rebroadcast scheduling call (415) 554-4188. Video on demand is available at:
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 1:05 PM |
| | | |Commissioner Al Casciato 1:05 PM |
| | | |Commissioner Joseph D. Driscoll 1:05 PM |
| | | |Commissioner Victor Makras Absent |
| | | |Commissioner Wendy Paskin-Jordan 1:05 PM |
| | | |Commissioner Brian Stansbury 1:05 PM |
|3. |03082017-03 |Action Item |CLOSED SESSION |
| |President Cohen called for public comment. |
| | |
| |There were no comments from the public and President Cohen closed public comment. |
| | |
| |Recommendations and Possible Action on Sales and Purchases of Particular, Specific Pension Fund Investments under California Government |
| |Code Section 54956.81 (4 investment recommendations). |
| | |
| |The Board entered into Closed Session at 1:08 PM. |
| | |
| |The following individuals were present for the closed session: Commissioners Casciato, Cohen, Bridges, Driscoll, Paskin-Jordan and |
| |Stansbury; Jay Huish, Executive Director; Caryn Bortnick, Deputy Executive Director; William J. Coaker, Chief Investment Officer; Art |
| |Wang, Managing Director for Private Markets; Bob Shaw, Managing Director for Public Markets; David Francl, Managing Director for Absolute|
| |Return; Ellen Brownell, Managing Director for Asset Allocation; Tanya Kemp, Director; Glen Schwartz, Senior Investment Officer; Han Pham,|
| |Christopher Chow, Justin Lo, Vicki Owens, Ed Comerford, Senior Portfolio Managers; Cynthia Wong, Mark Coleman, Joshua Man, Dennis |
| |Esselsagoe, Kien Trinh, Joe Bates, Security Analysts; Robert Bryan and Tran Ly, Deputy City Attorneys; Norm Nickens, Board Secretary; |
| |Anita Ng and Craig Beach, Cambridge Associates; Allan Martin, NEPC. |
| | |
| |Commissioner Cohen left the meeting at 1:33 PM and returned at 1:38 PM. |
| | |
| |The Board returned to open session at 2:37 PM. |
| | |
| |Action: Moved by Commissioner Stansbury, Seconded by Commission Bridges to not disclose discussion in Closed Session under San Francisco|
| |Administrative Code Section 67.12(a). |
| |Ayes: Bridges, Casciato, Cohen, Driscoll, Paskin-Jordan, Stansbury |
| |Absent: Makras |
| | |
|4. |03082017-04 General Public Comment - Not earlier than 2:30 PM |
| | |
| |President Cohen called for public comment. |
| | |
| |Claire Zvanski, SEIU West Bay Retirees, congratulated Commissioner Casciato on his election to the Board. |
| | |
| |There were no additional comments from the public and President Cohen closed public comment. |
|5. |03082017-05 |Action Item |Approval of the Minutes of the February 8, 2017 Retirement Board Meeting |
| |Documents provided to the Retirement Board prior to the current meeting: Draft Minutes of the February 8, 2017 Retirement Board Meeting |
| | |
| |President Cohen called for public comment. |
| | |
| |There were no comments from the public and President Cohen closed public comment. |
| | |
| |Moved by Commissioner Stansbury, Seconded by Commissioner Driscoll to recuse Commissioner Casciato from voting on the Minutes as he was |
| |not on the Board in February, 2017. |
| |Ayes: Bridges, Cohen, Driscoll, Paskin-Jordan, Stansbury |
| |Absent: Makras |
| |Abstain: Casciato |
| | |
| |Action: Moved by Commissioner Stansbury, Seconded by Commission Cohen to approve the Minutes of the February 8, 2017 Retirement Board |
| |Meeting |
| |Ayes: Bridges, Cohen, Driscoll, Paskin-Jordan, Stansbury |
| |Absent: Makras |
| |Abstain: Casciato |
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.
|6. | 03082017-06a |Action Item | Consent Calendar |
| 03082017-06b |Action Item | Voluntary Retirement Board |
| | |List No. 9-16 |
| 03082017-06c |Action Item |Decisions of Hearing Officers |
|David J. Broder |9345 Sheet Metal Supervisor I |Ordinary Disability Retirement |
|Effective Date: 10/10/15 |Airport |Granted |
|John B. Daniels |9163 Transit Operator |Ordinary Disability Retirement |
|Effective Date: 11/12/16 |MTA |Granted |
|Monique Kwan |2908 Sr. Hospital Eligibility Wkr |Ordinary Disability Retirement |
|Effective Date: 6/1/14 |DPH-SFGH |Granted |
|Lee A. Martin |9504 Permit & Citation Clerk |Ordinary Disability Retirement |
|Effective Date: 9/9/15 |MTA |Denied |
|Nick G. Sarantes Jr. |7355 Truck Driver |Ordinary Disability Retirement |
|Effective Date: 12/19/15 |Port |Granted |
|Aurora Summers |9163 Transit Operator |Ordinary Disability Retirement |
|Effective Date: 7/1/10 |MTA |Granted |
| 03082017-06d |Action Item |Travel Requests |
| |
|Request Travel Approval for Commissioner Leona Bridges to attend The Pension Bridge Annual, April 18-19, 2017, San Francisco, CA. |
| |
|Request Travel Approval for Commissioner Leona Bridges to attend the 20th Annual Milken Institute Global Conference, April 30 – May 3, 2017, Los |
|Angeles, CA. |
| |
|Request Travel Approval for Commissioner Wendy Paskin-Jordan to attend NEPC’s 22nd Annual Investment Conference, May 9-10, 2017, Boston, MA. |
| |
|Request Travel Approval for Commissioner Leona Bridges to attend the Salt Vegas Conference, May 17-19, 2017, Las Vegas, NV. |
|Documents provided to the Retirement Board prior to the current meeting: Voluntary Retirement Board List, Hearing Officer Decisions, Conference Agendas|
| |
|President Cohen called for public comment. |
| |
|There were no comments from the public and President Cohen closed public comment. |
| |
|Action: Moved by Commissioner Casciato, Seconded by Commission Driscoll to approve the Consent Calendar as amended to add Commissioner Driscoll to the |
|Pension Bridge conference travel request. |
|Ayes: Bridges, Casciato, Cohen, Driscoll, Paskin-Jordan, Stansbury |
|Absent: Makras |
INVESTMENT CALENDAR
|7. |03082017-07 |Discussion Item |Investment Committee Report |
| |Documents provided to the Retirement Board prior to the current meeting: Committee Report |
| | |
| |Commissioner Bridges presented an oral and written report on this item. |
| | |
| |Commissioner Bridges reported that at their meeting of February 15, 2017 the Investment Committee: |
| | |
| |Approved the minutes of the November 16, 2016 Investment Committee meeting; |
| |Received an educational presentation on Capital Market Assumptions and the Asset Allocation Process from Allan Martin and Phillip Nelson, NEPC; and,|
| |Received an educational presentation on Macroeconomics, Security Returns, and Artificial Intelligence from Apurv Jain, Microsoft Corporation. |
| | |
| |The Committee’s next meeting has been scheduled for Tuesday, May 23rd, 2017. |
| | |
| |President Cohen called for public comment. |
| | |
| |There were no comments from the public and President Cohen closed public comment. |
| |Action: This was a discussion only item. |
| | |
| |Note: President Cohen called Items 8 & 9 together |
|8. |03082017-08 |Discussion Item |Report on Investment Performance for the Quarter Ended December 31, 2016 |
| |Documents provided to the Retirement Board prior to the current meeting: Quarterly Performance Review and NEPC Investment Performance Analysis |
| | |
| |William J. Coaker, Jr., Chief Investment Officer, Bob Shaw, Managing Director for Public Markets, Han Pham, Allan Martin presented an oral and |
| |written report on this item. |
| | |
| |Mr. Shaw reported that: |
| | |
| |SFERS' portfolio advanced 1.23% for the quarter - 24 basis points ahead of the policy benchmark - as plan assets were steady at $21.0 billion. With |
| |the exception of Fixed-Income (-1.79%), each |
| |of SFERS' asset classes posted positive returns, led by Real Assets (+6.22%) and Private Equity (+2.76%). In its first full quarter, Absolute Return|
| |(+2.38%) was in the black. Public |
| |Equities returned + 1.0 I% driven by the wide difference between US Equities (+ 3.53%) and Non-US Equities (-1.90%). |
| | |
| |Public Equities (+ 1.0 I%) lagged the MSCI ACWI IMI by 26 basis points - as poor absolute and relative results in US Large Cap Growth Equities |
| |(-5.44% vs. + 1.0 I% for benchmark) reduced public equity performance by an estimated 25 basis points in the quarter. |
| | |
| |Private Equity (+2.76%), trailed its benchmark (S&P 500 + 500 basis points), by 232 basis points, but continued its 13+ quarter run of positive |
| |absolute performance. It is common for Private Equity to lag its policy benchmark during periods of strong public equity performance - such as this |
| |quarter, which saw the S&P 500 climb 5.08%. |
| | |
| |Real Assets advanced 6.22% against the benchmark's return of 1.94%. |
| | |
| |Fixed income (-1.79%), with its significant short duration posture (4.7 vs. 5.7) coupled with an overweight to credit, was able to handily beat its |
| |policy benchmark (-2.61 %) during a quarter that saw US interest rates rise (the US I 0- year treasury rose from 1.60% to 2.44% during the quarter).|
| | |
| |Absolute Return (+2.38%), in its first quarter was ahead of the policy benchmark of 90-day T-bills + 500. |
| | |
| |Relative to peers (public funds with assets >$I billion), SFERS' results ranked in the second quartile |
| |for the quarter, Fiscal Year to Date and I Year. For all other reported time periods, SFERS ranked in |
| |either the top decile or quartile. The Fund's volatility, measured by standard deviation of returns, was below that of SFERS' Policy Index and the |
| |median peer over the trailing 1-, |
| |3-, 5- and I 0-year periods. |
| | |
| |Public Equities ended the quarter at 46.0% of plan assets (versus a policy of 40.0%). The above target allocation to equity serves to partly offset |
| |the underweight to private equity (14.1 % compared to the target of 18.0%), real assets ( 13.2% versus a target of 17.0%) and Absolute Return (2.2% |
| |vs. a target of 5.0%). Fixed income is also overweight (22.2% versus a policy weight of 20.0%). Cash (2.2% of plan assets) remains above the upper |
| |end of the allowable range of 0-1 %. |
| | |
| |Commissioner Stansbury recommended that additional comparison data (1, 3, 5, 10 year) on performance and allocation for endowments be added to the |
| |reporting format. Mr. Coaker agreed to provide the requested information going forward. |
| | |
| |Commissioner Stansbury left the meeting at 3:07 PM and returned at 3:11 PM. |
| | |
| |Commissioner Driscoll discussed the expected rate of return and impact on contributions. |
| | |
| |Commissioner Casciato discussed funding status and GASB requirements. |
| | |
| |President Cohen called for public comment. |
| | |
| |There were no comments from the public and President Cohen closed public comment. |
| |Action: This was a discussion only item. |
|9. |03082017-09 |Discussion Item |Report on Managers Under Review |
| |Documents provided to the Retirement Board prior to the current meeting: Staff report |
| | |
| |William J. Coaker, Jr., Chief Investment Officer, Bob Shaw, Managing Director for Public Markets, presented an oral and written report on this item.|
| | |
| |Mr. Shaw reported that each quarter, investment staff and NEPC, SFERS' general investment consultant, provide the Retirement Board with details |
| |regarding the current status of Public Market investment managers that have been placed under review in accordance with the Guidelines for Equity |
| |and Fixed Income Manager Monitoring and Retention. |
| | |
| |Managers added to the "Under Review" list: |
| | |
| |No Manager was added to Under Review. |
| | |
| |Managers removed from the "Under Review" list: |
| | |
| |One manager has been removed from the Under Review list. |
| | |
| |• Northern Trust Global Investors -Russell 2000 Growth Equities and MSCI EAFE Index Equities (both |
| |passive mandates). In 2014, Northern Trust Global Investors ("NTGI"}, the asset management arm of The Northern Trust Company, received a subpoena |
| |from the SEC requesting information on NTGl's securities lending activities. As a result of this action, investment staff placed NTGI under review. |
| |In November 2016, NTGI received a "No-Action Letter" from the SEC, which indicates that the matter is closed. No charges were made by the SEC. |
| | |
| |Commissioner Driscoll discussed Wellington’s performance. Mr. Coaker noted that staff is currently gathering additional data, including conducting |
| |a review of the peer universe. |
| | |
| |Mr. Coaker discussed the process of hiring and terminating managers. Mr. Huish noted that this process is under review as part of the current |
| |Funston process, and that recommendations are currently being considered for inclusion in their report to the Board. |
| | |
| |President Cohen asked about the status of Capital Guardian, Mr. Coaker noted that they are still under review by staff. |
| | |
| |Commissioner Paskin-Jordan left the meeting at 3:38 PM. |
| | |
| |President Cohen called for public comment. |
| | |
| |Claire Zvanski, RECCSF, noted that endowments are not directly comparable to public pension plans. |
| | |
| |There were no additional comments from the public and President Cohen closed public comment. |
| |Action: This was a discussion only item. |
| | |
|10. |03082017-10 |Discussion Item |Private Equity Portfolio Update |
| |Documents provided to the Retirement Board prior to the current meeting: Cambridge Associates report |
| | |
| |William J. Coaker, Jr., Chief Investment Officer, Art Wang, Managing Director for Private Markets, Anita Ng, Craig Beach, Cambridge Associates, |
| |presented an oral and written report on this item. |
| | |
| |Ms. Ng reported that: |
| | |
| |SFERS PE program has performed well on an absolute basis and relative to public markets. The program has been a strong contributor to overall Plan |
| |returns over the long term. |
| | |
| |The PE program currently stands at 14% of total Plan assets and is underweight its 18% target allocation. Cumulative distributions have amounted to |
| |$6.8 billion and have been robust over the past several years, particularly from buyout investments. |
| | |
| |On the heels of an active 2015 with nearly $1.2 billion in commitments; 2016 was another productive year for the PE program: |
| | |
| |$1.1 billion in commitments to 18 managers - nine existing managers, eight new access-constrained managers, and one direct co-investment. |
| | |
| |The fundraising market remains very competitive for the most sought after funds. SFERS has benefitted from cultivating relationships with top-tier |
| |investment managers. |
| | |
| |Most private equity markets remain frothy. SFERS continues to focus on high conviction opportunities, emphasizing manager selection and prioritizing|
| |pockets of relative value and attractiveness. |
| | |
| | |
| |President Cohen called for public comment. |
| | |
| |There were no comments from the public and President Cohen closed public comment. |
| |Action: This was a discussion only item. |
|11. |03082017-11 |Discussion Item |Real Assets Portfolio Update |
| |Documents provided to the Retirement Board prior to the current meeting: Cambridge Associates report |
| | |
| |William J. Coaker, Jr., Chief Investment Officer; Art Wang, Managing Director for Private Markets; Anita Ng, Scott Martin, and Nick Warmingham , |
| |Cambridge Associates, presented an oral and written report on this item. |
| | |
| |Mr. Wang introduced Cambridge Associates to present its annual review of SFERS' Real Assets program, including portfolio and market observations. |
| |Given the reporting lag associated with private investment partnerships, all data was presented as of September 30, 2016 unless otherwise noted. As |
| |of September 30, 2016, SFERS' Real Assets portfolio has a reported value of $2.5 billion (12.0% of total Plan assets) and has generated an 8.1% net |
| |IRR since inception. |
| | |
| |Cambridge reported that: |
| | |
| |The real assets program has outperformed by 60 bps annualized over the past 20 years. |
| |Total exposure is 12%, underweight but building up to its 17% asset allocation target. |
| |2016 was a productive year, with $1,037.5 million committed to 15 funds and coinvestments. |
| |Competition remains fierce for capacity with top funds. SFERS' proactive outreach and relationship building has been rewarded with outsized access. |
| |Valuations remain elevated for many markets. SFERS continues to focus on pockets of relative value and managers with strong in-house operational |
| |skillsets. |
| |Since inception in 1978 through September 30, 201 6, SFERS committed $8,371 million to 101 funds. Managers have called $6,367 million (~76% of |
| |commitments). |
| |The program has generated a total value to paid-in of 1.37x, creating $2.4 billion in value net of fees and carried interest. |
| |Current NAV stands at $2,523 million (12% of total portfolio assets). Unfunded commitments of $2, 116 million will be drawn down over several years.|
| | |
| |President Cohen called for public comment. |
| | |
| |There were no comments from the public and President Cohen closed public comment. |
| |Action: This was a discussion only item. |
|12. |03082017-12 |Action Item |Chief Investment Officer Report |
| |Documents provided to the Retirement Board prior to the current meeting: CIO Report |
| | |
| |William J. Coaker, Jr., Chief Investment Officer, presented an oral and written report on this item. |
| | |
| |Mr. Coaker reported that the portfolio was valued at $21.5 billion as of February 28, 2017. In February SFERS investments gained 1.27%. U.S and |
| |International Equity portfolios added to their strong returns in January, gaining 3.45% and 1.64%, respectively, in February. Fixed Income |
| |portfolio returned 0.75% during the month, an outsized gain for bonds in one month. Private Equity and Real Assets edged down by -0.03% and -0.80%,|
| |respectively. Preliminary returns in February for Absolute Return were not yet available but in January the strategy earned 1.00%, for a total |
| |return of 3.41% in its first four months. |
| | |
| |Fiscal Year: |
| | |
| |For the first eight months of the fiscal year, the portfolio has gained 8.23%. U.S. stocks have recorded a robust return of 15.52%, while |
| |International stocks have also had a strong gain of 10.97%. Private Equity has returned 5.64%, while Real Assets have gained 7.40%. Fixed Income |
| |portfolio is up just 1.44% fiscal year to date. Our Absolute Return strategy began on October 1, 2016 after the start of the fiscal year. |
| | |
| |Closed Session Disclosures: |
| | |
| |LAV Fund IV |
| | |
| |At its meeting on November 9, 2016, the Retirement Board approved in closed session an investment of up to $100 million in LAV Biosciences Fund IV, |
| |L.P. The investment was approved by the following vote: |
| | |
| |Ayes: Bridges, Driscoll, Makras, Meiberger, Paskin-Jordan |
| |Absent: Cohen, Stansbury |
| | |
| |SFERS’ investment of $40 million in LAV Biosciences Fund IV, L.P. closed on February 28, 2017. |
| | |
| |This investment is classified as a venture capital investment within SFERS’ private equity portfolio and is SFERS’ first investment with Lilly Asia |
| |Ventures. |
| | |
| |More information about Lilly Asia Ventures is available at: |
| | |
| |SG Growth Partners IV, L.P. |
| | |
| |At its meeting on February 8, 2017, the Retirement Board approved in closed session an investment of up to $50 million in SG Growth Partners IV, |
| |L.P. The investment was approved by the following vote: |
| | |
| |Ayes: Bridges, Cohen, Driscoll, Meiberger, Paskin-Jordan, Stansbury |
| |Absent: Makras |
| | |
| |SFERS’ investment of $50 million in SG Growth Partners IV, L.P. closed on February 20, 2017. |
| | |
| |This investment is classified as a growth capital investment within SFERS’ private equity portfolio and is SFERS’ first investment with Stripes |
| |Group. |
| | |
| |More information about Stripes Group is available at: |
| | |
| |Next Investment Committee meeting is May 23, 2017. |
| | |
| |President Cohen called for public comment. |
| | |
| |There were no additional comments from the public and President Cohen closed public comment. |
| |Action: This was a discussion only item. |
DEFERRED COMPENSATION PLAN CALENDAR
|13. |03082017-13 |Discussion Item |Review of SFDCP Investment Performance for 2016 |
| |Documents provided to the Retirement Board prior to the current meeting: Staff memorandum, Callan presentation and Performance Report |
| | |
| |Diane Chui-Justen, Deferred Compensation Manager, Ben Taylor and Craig Ungerman, Callan Associates, presented an oral and written report on this |
| |item. |
| | |
| |Commissioner Stansbury left the meeting at 4:54 PM and returned at 5:04 PM. |
| | |
| |Commissioner Bridges left the meeting at 4:57 PM and returned at 5:17 PM. |
| | |
| |Mr. Taylor reported that: |
| | |
| |• The Deferred Compensation Plan was valued at $2.9 billion on December31, 2016 |
| | |
| |Change in value over last quarter was $18 million due to investment gains of $13 million and a net contribution of nearly $5 million. |
| |No fund changes to the lineup occurred during the period. |
| | |
| |• The target date funds finished behind their respective benchmarks across the series. |
| | |
| |The four most conservative funds finished down for the quarter given the sharp rise in interest rates during the quarter. |
| |The funds generally fell short of their benchmark returns during the period due to the underperformance of a few of the actively managed underlying |
| |funds. |
| |Absolute returns have been good going out to the since inception period of 4 years but short of the peer group median across all funds given the |
| |more conservative glidepath and higher non-US Equity. |
| | |
| |• The actively managed funds in the Plan had a mixed quarter versus their respective benchmarks and peer groups. |
| | |
| |The international equity fund managed by American Funds EuroPacific Growth Fund fell 4% after a very good start to the year. Longer term results |
| |remain excellent. |
| |The large cap growth and value actively managed funds performed well versus peers ranking in the top third of peers yet have been challenged versus |
| |the benchmark in the near term. Longer term results remain attractive. |
| |Both Fidelity actively managed funds - Contrafund and Low-priced Stock - continue to have difficulty versus the index and peers. Valuation of the |
| |current market is their key concern yet the strong cyclical rally has left them behind. The magnitude of the underperformance has negatively |
| |impacted their longer term results. |
| |The Core Bond fund managed by Baird fell 2.4% yet outperformed the benchmark of -3.0% and ranked in the top half of the peer group. Longer term |
| |results remain excellent. |
| |The Stable Value fund had a 0.4% return for the quarter and is up 1.5% for the year, well ahead of a money market fund or 3-year Treasury. The peer |
| |group comparison is not as favorable given the limited history of this custom separate account; the peer group contains many stable value funds with|
| |much longer history. |
| | |
| |• The passive funds managed by Vanguard all replicated the indices they are intended to match during the quarter. Callan would like to perform a |
| |Plan Structure Review to verify the correct indices are being used. |
| | |
| |President Cohen called for public comment. |
| | |
| |There were no comments from the public and President Cohen closed public comment. |
| |Action: This was a discussion only item. |
|14. |03082017-14 |Discussion Item |SFDCP Manager Report |
| |Documents provided to the Retirement Board prior to the current meeting: Staff report |
| | |
| |Diane Chui-Justen, Deferred Compensation Manager, presented an oral and written report on this item. |
| | |
| |President Cohen called for public comment. |
| | |
| |There were no comments from the public and President Cohen closed public comment. |
| |Action: This was a discussion only item. |
ADMINISTRATION CALENDAR
|15. | 03082017-15 |Discussion Item |Presentation of the SFERS Audited Financial Statements and Required Supplementary |
| | | |Information and Required Communications for the Years ended June 30, 2016 and June 30, 2015.|
| |Documents provided to the Retirement Board prior to the current meeting: SFERS Audited Financial Statements and Required Supplementary Information |
| |and Required Communications |
| | |
| |Commissioner Cohen left the meeting at 5:08 PM. |
| | |
| |Jay Huish, Executive Director; Jim Burrell, Finance Manager; and Annie Louie, Macias Gini & O’Connell LLP, presented an oral and written report on |
| |this item. |
| | |
| |Mr. Huish reported that each year, audited financial statements for the San Francisco Employees' Retirement System are prepared by outside auditors |
| |selected by the Controller's Office. The 2016 audited financial statements have been released by the Controller's Office. Representatives from |
| |Macias Gini & O’Connell LLP, the external audit firm selected the Controller's Office, presented the 2016 audited financial documents. |
| | |
| |Vice President Stansbury called for public comment. |
| | |
| |There were no comments from the public and Vice President Stansbury closed public comment. |
| |Action: This was a discussion only item. |
|16. |03082017-16 |Discussion Item |Update on Status of Initiatives in the 2011 SFERS Strategic Plan |
| |Documents provided to the Retirement Board prior to the current meeting: Staff memorandum |
| | |
| |Jay Huish, Executive Director, presented an oral and written report on this item. |
| | |
| |Mr. Huish reported that in January 2011, the Retirement Board approved the Strategic Planning Policy to provide a framework for a longer-term and |
| |more strategic approach to business planning on an organization-wide basis. In October 2011, Retirement staff recommended the attached 2011 SFERS |
| |Strategic Plan to the Retirement Board. The Retirement Board approved the 2011 SFERS Strategic Plan at its October 12, 2011 regular meeting. |
| |Retirement staff has provided the Retirement Board periodic status updates on the projects and initiatives included in the strategic plan. |
| |Retirement staff has prepared this update to the Retirement Board in conjunction with a recommendation for a new 2017 SFERS Strategic Plan which |
| |will be presented in a separate calendar item at this meeting. |
| | |
| |Vice President Stansbury called for public comment. |
| | |
| |There were no comments from the public and Vice President Stansbury closed public comment. |
| | |
| |Action: This was a discussion only item. |
| | |
|17. |03082017-17 |Action Item |Presentation and Approval of 2017 - 2022 Strategic Plan |
| |Documents provided to the Retirement Board prior to the current meeting: Draft Strategic Plan |
| | |
| |Jay Huish, Executive Director, presented an oral and written report on this item. |
| | |
| |In January 2011, the Retirement Board approved the Strategic Planning Policy to provide a framework for a longer-term and more strategic approach to|
| |business planning on an organization-wide basis. SFERS' first strategic plan was approved by the Retirement Board in October 2011. |
| | |
| |As set forth in the Retirement Board's policy, Retirement staff is recommending a new 2017- |
| |2022 Strategic Plan to the Retirement Board for its consideration and approval. Working together, senior management staff has identified business |
| |risks, opportunities and needs for the department and identified priority strategic goals and objectives designed to address them. |
| | |
| |The FY2017-18 department budget approved by the Retirement Board at its February 8, 2017 meeting included both staff and other resources to address |
| |the strategic goals and objectives for this Strategic Plan beginning in the coming year. Retirement staff will provide on-going updates on the |
| |progress made over time to achieve the strategic goals and objectives outlines in the proposed plan. |
| | |
| |Commissioner Stansbury recommended that the Board consider this item again after the Funston Group has made their final report. |
| | |
| |Commissioner Driscoll discussed the importance of educating members to prepare for retirement. |
| | |
| |Commissioner Casciato spoke in support of adopting the staff report, which can be amended after the completion of the Funston review. |
| | |
| |Commissioner Stansbury: |
| | |
| |Staff should answer the phone, live person should be available. Mr. Huish will provide additional benchmarking data as described in the staff |
| |report. |
| |Track member contacts and satisfaction levels. |
| |Build out Investment staff. |
| |Protection of member privacy and data as a specific goal. |
| | |
| |Commissioner Bridges left the meeting at 5:38 PM. |
| | |
| |Mr. Huish requested that the Board members submit recommendations for additional Strategic Plan goals, and noted that the plan could be revised in |
| |light of any recommendations from the Funston Group. A revised Strategic Plan will be submitted to the Board. |
| | |
| |Commissioner Paskin-Jordan noted that the Strategic Plan could also be reviewed in the Board’s relevant committees. |
| | |
| |Vice President Stansbury called for public comment. |
| | |
| |There were no comments from the public and Vice President Stansbury closed public comment. |
| | |
| |This item was continued to future meeting. |
| | |
| |Action: This was a discussion only item. |
|18. |03082017-18 | |Item Not Used |
| | |
|19. |03082017-19 |Action Item |Approval of President’s Committee Assignments |
| |Documents provided to the Retirement Board prior to the current meeting: Committee Assignments |
| | |
| |Jay Huish, Executive Director, presented an oral and written report on this item. Mr. Huish noted that there were vacancies on committees as a |
| |result of Commissioner Meiberger leaving the Board and that Commissioner Casciato was being recommended to fill the vacancies. |
| | |
| |Commissioner Casciato declined the opportunity to serve on the ESG Committee, and Commissioner Driscoll agreed to serve as Committee Chair for ESG |
| |on a temporary basis. |
| | |
| |Vice President Stansbury called for public comment. |
| | |
| |There were no comments from the public and Vice President Stansbury closed public comment. |
| | |
| |Action: Moved by Commissioner Stansbury, Seconded by Commission Driscoll to approve the President’s Committee Assignments as amended. |
| |Ayes: Casciato, Driscoll, Paskin-Jordan, Stansbury |
| |Absent: Bridges, Cohen, Makras |
|20. | 03082017-20 |Discussion Item |Executive Director’s Report |
| |Documents provided to the Retirement Board prior to the current meeting: Executive Director’s Report. |
| | |
| |Jay Huish, Executive Director, presented an oral and written report on this item. |
| | |
| |Administrative Update: |
| | |
| |Form 700 Filing Instructions and Deadline: April 3, 2017 |
| |Recognition and appreciation lunch for former Commissioner Meiberger |
| |Board Retreat – Funston Advisory Services Board Evaluation Workshop |
| |Supervisor Kim’s legislation related to executive compensation |
| | |
| | |
| |Attachments: |
| |Public Retirement Conferences and Training Programs for SFERS Trustees listing prepared by Nossaman LLP and Cortex Report |
| |• Blackout Period List |
| |• Forward Calendar |
| | |
| |Vice President Stansbury called for public comment. |
| | |
| |There were no comments from the public and Vice President Stansbury closed public comment. |
| |Action: This was a discussion only item. |
|21. | 03082017-21 |Discussion Item |Retirement Board Member Good of the Order |
| |Retirement Board members may request that any matter be calendared at a future meeting. All such requests shall be calendared in a reasonable |
| |time. (Board Operations Policy ¶24.) The Board will not discuss any items requested to be calendared until a subsequent meeting when the |
| |matter is included on the agenda with the required public notice. |
| | |
| |Prior to leaving the meeting, President Cohen requested that the attached “Request for Executive Director Report on Fossil Fuel Investments” |
| |from Commissioner Makras be submitted to the Retirement Board under this item. |
| | |
| |Vice President Stansbury called for public comment. |
| | |
| |There were no comments from the public and Vice President Stansbury closed public comment. |
| | |
| |Action: This was a discussion only item. |
|22. | 03082017-22 |Discussion Item |Retirement Board Member Reports and Comments |
| | | | |
| | | | |
| | | | |
|23. |02082017-23 |Action Item |CLOSED SESSION |
| |This item was not heard. |
|24. | 02082017-24 | |Adjournment |
| | | | |
| | | |Having no further business, the Board adjourned the meeting at 6:13 PM. |
| | | | |
| | | | |
| | | | |
| | | |Respectfully submitted, |
| | | |Jay Huish, Executive Director |
| | | | |
| | | | |
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