DARTED I DON'T. SENATOR STILL.
IN COMMITTEE SO THAT I WELCOME
EVERYBODY THIS MORNING ON THE
JOINT HEARING OF THE SENATE
COMMITTEE. ON PUBLIC GRIEF.
EMPLOYMENT AND RETIREMENT
COMMITTEE AND THE SENATE
COMMITTEE ON PUBLIC EMPLOYEES
RETIREMENT. AND SOCIAL SECURITY.
HOUSE CALIFORNIA PENSIONS PUBLIC
PENSIONS FUNDS SUPPORT
CALIFORNIA VALUES WATCHFUL IN
THEIR FIDUCIARY OBLIGATIONS.
TODAY'S HEARING IS A PART
CONSIDER IN OUR POLITICAL AND
ECONOMIC CLIMATE ACROSS THE
COUNTRY.
IT IS MY GOTO HERE SEVERAL
PERSPECTIVE FROM MANY GROUPS
TODAY.
AS A POLICYMAKER IT IS IMPORTANT
FOR ME TO HEAR FROM YOU
REGARDING THE IMPLICATIONS OF
DIVESTMENT AND INVESTMENT
POLICIES WE MUST CONSIDER.
HOW THE IMPACT ALL PUBLIC
EMPLOYEES AND THE RETIREMENT?
AS WELL AS LONG TERM
IMPLICATIONS.
THAT THESE HAVE ON THE
SUSTAINABILITY OF CALPERS AND
CAL STIRS.
FOR A LEAST A DECADE WE HAVE
SEEN A LOT OF PROPOSALS CALLING
FOR THE SYSTEM TO DIVEST.
FROM INVESTMENTS THIS ALSO
INCLUDES PROPOSALS THAT ARE THE
IDEAS OF CALPERS MCALISTER'S
BOARDS.
I'M REALLY INTERESTED THIS
MORNING IN HEARING AND
UNDERSTANDING HOW THESE POLICIES
HAVE AND WILL CONTINUE TO HAVE
AFFECTS ON THE LONG TERM
FINANCES OF THE SYSTEM.
WHILE CONSIDERING THEIR CURRENT
FUNDED STATUS AND WHAT THIS
COULD MEAN FOR FUTURE RETIREES.
GIVEN OUR TIME TODAY I ASK AND
REMIND EVERYONE WHO IS SPEAKING
TO PLEASE STAY ON TOPIC. THAT
SHARON IS NOT ABOUT PENSION
REFORM EMPLOYER CONTRIBUTION
RATES O ABOUT THE COST OF
PUBLIC EMPLOYEES VENGEANCE.
WE HAVE AMPLE TIME TO DISCUSS
THOSE IMPORTANT ISSUE THAT LATER
HEARINGS.
SO THAT THANK YOU THIS MORNING
AND I LOOK HERE AND FOR HEARING
FROM YOU ALL THIS MORNING IN
WITHOUT ASSEMBLYMEMBER.
COOLEY DO YOU HAVE ANY WORD YOU
LIKE TO.
OKAY SO WITH THAT WE HAVE OUR
FIRST PANEL OF.
ARE SPARKING CALIFORNIA VALUES
WHY INVESTING CALIFORNIA PUBLIC
PENSION FUNDS
WITH US HERE THIS MORNING AS
KRISTIN'S BALDING. CALIFORNIA
DIRECTOR OF.
SERIES JENNIFER BAKER
LEGISLATIVE ADVOCATE OF
CALIFORNIA TEACHERS ASSOCIATION.
AND JODY NEWMAN INVESTMENT
MANAGER TRILLIUM ASSET
MANAGEMENT COMFORTABLY.
AND WE CAN GO AHEAD WITH WHO
WOULD EVER WANT TO GO FIRST.
ARE THEY HERE.
CHIN JUTTING.
OF.
GO AHEAD AND.
FIRST GO AHEAD. AND MORNING
JENNIFER BAKER THE CALIFORNIA
TEACHERS ASSOCIATION THANK YOU
VERY MUCH FOR.
PROVIDING US WITH AN
OPPORTUNITY TO SHARE SOME OF THE
PERSPECTIVES.
ON SOME VERY IMPORTANT TOPICS
THAT YOU'VE BEEN DISCUSSING FOR
QUITE A NUMBER OF YEARS.
DIS DID.
THESE TOPICS HAVE BEEN COMING
UP MUCH MORE OFTEN AND THE
CONVERSATIONS HAVE BECOME MUCH
MORE COMPLEX THAN THEY USED TO
DO.
IT I THINK MOST IMPORTANTLY.
THE CONVERSATIONS THAT HAPPENED
WITHIN THE WALLS OF CAL STIRS IN
CALPERS WHO WE REALIZE DON'T
ALWAYS.
TRICKLE OVER TO THE CAPITOL
CORRIDORS AND SO WHILE YOU MAY
NOT HEAR DISCUSSIONS THAT HAPPEN
REGARDING ENGAGEMENT OR
DIVESTMENT IT DOESN'T MEAN THAT
CONVERSATIONS ARE NOT TAKING
PLACE.
WHAT I WOULD LIKE TO SHARE WITH
YOU IS THAT THAT CALIFORNIA
TEACHERS ASSOCIATION FULLY
SUPPORTS THE WORK THAT CAL
STEWARDS DOES IN REGARD TO
ENGAGEMENT? AND WE APPRECIATE
THAT THOROUGH DIALOGUE THAT
THEY'VE HAD WITHIN THEIR
INVESTMENT DIVISIONS ON THE
CONVERSATIONS HAVE BEEN.
VERY DIFFICULT AND VERY
COLORFUL BUT WE APPRECIATE THE
FACT THAT CALCIUM'S TRIES TO
ENGAGE WITH COMPANIES.
AND TRIES TO USE THE VALUES
THAT THEY HAVE TO SHAPE CHANGE
AND SYSTEMIC CHANGES VERY
DIFFICULT AND IT'S NOT OVER
NIGHT.
CAL STIRS ALWAYS LOOKS AT
ISSUES OVER A VERY LONG TERM
HORIZON WHICH DOES NOT ALWAYS
TAKE THE PLATE TAKE PLACE AND
OTHER AREAS.
THE DIFFICULTY THAT WE HAVE
WON'T DURING CONVERSATIONS ABOUT
EITHER ENGAGEMENT OR DIVESTMENT
IN THE WALLS OF THE CAPITAL IS
THAT THERE'S NOT ALWAYS A
CONVERSATION ABOUT FUNDING
IMPLICATIONS. IT WAS ALWAYS
COMPLEX EVEN BEFORE WE HAD AB
FOURTEEN SIXTEEN I AM BUT AS YOU
KNOW JUST A FEW YEARS AGO THANKS
TO YOUR HARD WORK AND DEDICATION
THE LEGISLATURE AND GOVERNOR
PASS AB FOURTEEN SIXTY NINE. TO
FULLY FUND CAL STIRS OVER A
PERIOD OF THIRTY TWO YEARS.
NOW WHEN THERE ARE DISCUSSIONS
ABOUT DIVESTMENT SHOULD THERE BE
ANY COST IMPLICATIONS NOT ONLY
DOES IT HAVE A COST TO THE FUND
WILL MORE WORKING ON IN.
IMPLEMENTING THE LONG TERM COSTS
OF CAL STICKERS BUT THAT ALSO
CAN HAVE AN IMPACT ON
CONTRIBUTION RATES THAT OUR
MEMBERS ARE PAINTED CAL
STIRRERS.
ULTIMATELY IN THIS IS A VERY
COMPLICATED SO I CAN'T FIT INTO
THREE MINUTES.
BUT WHAT I CAN TELL YOU IS
ULTIMATELY THAT COULD LEAD TO
LONG TERM INCREASES
DISPROPORTIONATELY TO OUR NEW S.
EDUCATORS THOSE THAT HAVE BEEN
HIRED AFTER TWO THOUSAND
THIRTEEN.
SO JUST AS THE LEGISLATURE HAS
CONVERSATIONS ABOUT THE TEACHER
SHORTAGE AND WHAT CAN WE DO TO
HELP REMEDY THAT.
PLEASE KNOW THAT WHEN YOU HAVE
CONVERSATIONS ABOUT DIVESTMENT
YOU COULD HAVE UNINTENDED
CONSEQUENCES OF EXACERBATING THE
TEACHER SHORTAGE THAT WE'RE
TRYING TO DEAL WITH
SIMULTANEOUSLY. IT'S VERY
DIFFICULT TO TALK ABOUT
EMOTIONAL IN FACT BATES ISSUES
AT THE SAME TIME NEVER THE LAST
THIS IS ONE OF THE IMPORTANT
TASK THAT WE ARE TRYING TO
ACHIEVE WHICH IS WHY WE
APPRECIATE THE CONVERSATIONS
THAT YOU. AS BOTH OF YOUR
RESPECTIVE COMMITTEES AND MANY
OF THE LEGISLATORS WHO HAVE
INTRODUCED BILLS REGARDING
DIVESTMENT OR ENGAGEMENT. OUT WE
CERTAINLY APPRECIATE THE FACT
THAT YOU HAVE BEEN WILLING TO
ENGAGE WITH US OF FINDING NEW
AND CREATIVE WAYS TO MOVE THESE
CONVERSATIONS FORWARD WE
PARTICULARLY APPRECIATE THE WORK
OF ASSEMBLY MEMBER KALRA THIS.
PAST YEAR IN SHIFTING THE
DIRECTION OF AB TWENTY FROM A
DIVESTMENT TO AN ENGAGEMENT BILL
AND WE'RE HOPING THAT THIS NEW
APPROACH.
OF TALKING ABOUT ISSUES MIGHT BE
A NEW TOOL THAT BOTH LEGISLATORS
AND THEIR STAFF WORKING ON THE
ISSUES MIGHT CONSIDER IN
ADDITION EVALUATING THE LONG
TERM FISCAL CONSEQUENCES THAT
THAT COULD HAVE AND ITS
IMPLICATIONS ON MEMBERS OF THE
FUN AS WELL AS THE GENERAL FUND
WHO ALO PAYS FOR. CAL STIRS AS
WELL I APPRECIATE THE TIME THAT
YOU PROVIDED TO ME AND I'M
AVAILABLE FOR ANY ADDITIONAL
QUESTIONS.
GOING.
MORNING I CARE STERN SPAULDING
AYE.
YEAH A LOT IN CALIFORNIA PROGRAM
OF THEORIES.
THEORIES IS A NONPROFIT AND WE
MANAGE THE INVESTOR NETWORK OF A
HUNDRED AND THIRTY INSTITUTIONAL
INVESTORS WITH.
OVER TWENTY TRILLION IN ASSETS.
THIS GROUP OF AN INSTITUTIONAL
INVESTORS BOTH OWNERS AND
MANAGERS COME TOGETHER TO REALLY
THINK ABOUT OPPORTUNITIES AND.
RISKS
CROSS THE INVESTMENT PORTFOLIOS
AS THEY THINK ABOUT
ENVIRONMENTAL SOCIAL AND
GOVERNANCE ISSUES.
WE HAVE FOCUSED ON CLIMATE
CHANGE ON WATER MANAGEMENT ON
HUMAN RIGHTS AND EQUITY ISSUES.
CALPERS AND CAL STORES HAVE BEEN
VERY ENGAGED IN OUR NETWORK OVER
THE LAST TEN YEARS THAT I'VE
BEEN WITH CERES OVER THE LAST
TWENTY FIVE YEARS OF OUR.
SINCE
BOTH HAVE HAD POSITIONS ON OUR
BOARD AND BOTH THE BAND REAL
LEADERS IN THE NORTH AMERICAN
NETWORK OF INVESTORS.
I WANT TO SPEAK TODAY TO THEIR
ROLE IN ENGAGEMENT AS A STRATEGY
FOR MANAGING SYSTEMIC RISK.
WHEN WE SAY SYSTEMIC RISKS WE'RE
TALKING BOUT RISK. SO BIG THAT
THEY AFFECT EVERY ASSET CLASS
THAT THEY AFFECT EVERY SECTOR OF
THE.
AND THOSE ARE RISKS LIKE CLIMATE
CHANGE AND WATER MANAGEMENT.
HUMAN RIGHTS ISSUES IN CERTAIN
GEOGRAPHIES THAT WILL AFFECT
MANY DIFFERENT COMPANIES.
THESE KINDS OF SYSTEMIC RISK
CANNOT BE DEALT. BY ONE INVESTOR
WITH ONE PORTION OF OUR
ACCOMPANYING AND THEIR HOLDINGS
THEY REALLY HAVE TO BE DEALT
WITH COLLABORATIVELY.
COLLECTIVELY WE NEED TO HAVE A
PLAN TO REALLY IMPACT THE ENTIRE
ECONOMY AND CALPERS AND CAL
STORES OF BOTH LEAD THAT WORK
WITH US.
I WANNA GIVE JUST THREE QUICK
EXAMPLES NOTHING IS ONE OF THE.
MOST IMPORTANT EMISSIONS THAT
IS AFFECTING CLIMATE CHANGES TO
IT ON GREENHOUSE GAS EMISSIONS
AND CAO STIRS UNDERTOOK A
PROGRAM SEVERAL YEARS AGO TO
REALLY BEGIN TO ADDRESS METHANE.
IN THEIR PORTFOLIO.
THEY LED A DIALOGUE WITH THE
SERIES OF FOURTEEN COMPANIES
ULTIMATELY ON FILING RESOLUTIONS
WITH A SMALLER SUBSET OF THOSE
WHO WILL NOT RESPOND.
THE DIALOGUE
AND ULTIMATELY GETTING. FIRM
COMMITMENTS FROM THESE BIG OIL
AND GAS COMPANIES TO MANAGE
THEIR METHANE EMISSIONS
DIFFERENTLY.
THOSE COMMITMENTS LED TO THE
WITHDRAWAL OF RESOLUTIONS THEY
DIDN'T ACTUALLY HAVE TO GO TO A
VOTE. BUT THAT SIGNAL FOURTEEN
BIG COMPANIES LED BY ONE OF THE
LARGEST INVESTORS IN THE U. S.
IMPACTS THE ENTIRE WORLD. ALL OF
THE OIL AND GAS SECTOR TAKES
NOTE THAT METHANE EMISSIONS MUST
BE MANAGED DIFFERENTLY TO
ADDRESS THIS CRITICAL RISK A
RISK THAT WILL AFFECT NOT ONLY
THOSE COMPANIES. AND THE
PORTFOLIOS OF EVERY INVESTOR BUT
OBVIOUSLY RISK THAT WILL AFFECT
OUR PLANET AS WELL.
CALPERS SIMILARLY UNDERTOOK A.
OF REAL LEADERSHIP ROLE WITH
EXXON MOBIL LAST YEAR
EXXON MOBIL AND WE DEMANDED A
TWO DEGREE SCENARIO ANALYSIS.
WHAT WILL HAPPEN TO THIS COMPANY
IF WE MANAGE TO KEEP GLOBAL
WARMING UNDER? TWO DEGREES IN
ACCORDANCE WITH THE PARIS
AGREEMENT.
CALPERS SAID WE WANT TO SEE YOUR
ANALYSIS
UP UNTIL THAT POINT EXXON HAD
BEEN SAYING WE DON'T THINK WE
NEED TO DO ANY ANALYSIS BECAUSE
THAT'S NOT IN THE RANGE OF
POSSIBILITIES.
THEY WERE REFUSING TO CONSIDER
WHAT WOULD HAPPEN IN THE LONG
RUN IF THAT IF THAT REALITY
BECAME TRUE.
AND FINALLY CALPERS FILED THE
RESOLUTION LED THE PROXY
SOLICITATION AND SIXTY TWO
PERCENT OF THE SHARE OWNERS
VOTED FOR IT REQUIRING
EXTOLLING.
TO DO THAT ANALYSIS
WITHOUT ANALYSIS NOW THERE'S
TRANSPARENCY AND THE MEAN
FESTERS LIKE CALPERS AND CAL
STIRS CAN EVALUATE THE REST.
TO THEIR PORTFOLIO AGAIN SENDING
A SIGNAL TO OTHERS IN THE SECTOR
AROUND THE WORLD TO OTHER
INVESTORS BUT GIVING US CRITICAL
INFORMATION FOR ACTIVELY
MANAGING OUR PORTFOLIO IN
ACCORDANCE WITH OUR FIDUCIARY
DUTY.
THAT'S THE SECOND EXAMPLE IN THE
THIRTY EXAMPLE CALPERS HAS.
RECENTLY STARTED AN INITIATIVE
WITH SIRIUS AND OTHER INVESTOR
NETWORKS AROUND THE WORLD A
EUROPEAN NETWORK
STRAND HIS NETWORK. AND THEN
ASIAN THAT WORK TOGETHER ON
ADDRESSING ENGAGING. THE HUNDRED
HEAVIEST DEMENTORS IN THE
CALPERS AND OTHER PORTFOLIOS FOR
YOU KNOW UNIVERSAL INVESTORS
MANY OF THESE HEAVIER MEMBERS.
GREENHOUSE GAS EMITTERS ARE THE
SAME.
SO WE HAVE DECIDED TO WORK WITH
THESE HUNDRED COMPANIES TO BEGIN
TO ADDRESS THEIR MISSION ASKING
FOR TRANSPARENCY ASKING FOR
MANAGEMENT PLANS TO DEGREE
SCENARIO ANALYSIS AND ULTIMATELY
GETTING TO SCIENCE BASE OR GETS.
TO A REDUCE THE EMISSIONS.
THAT PLAN WE WE BELIEVE WILL
AFFECT ALL OF THESE COMPANIES
AROUND THE WORLD IT WILL
CERTAINLY CHANGE THE WAY
INVESTORS ARE ABLE TO EVALUATE
THESE RISKS.
AND AGAIN REMEMBERING THAT THESE
RISKS ARE SYSTEMIC WHAT HAPPENS
IN THE OIL AND GAS SECTOR WILL
HAVE A RIPPLE EFFECT VERSIONS SO
MANY OTHER SECTORS OF THE.
SO THIS IS FOR FROM OUR
PERSPECTIVE A VERY EFFECTIVE
IF THE HOUSE. OF ALSO ON THE
SENATE EDUCATION
COMMITTEE IN THAT HEARING WAS
CONTINUING R. OR THE QUESTIONS
FROM COMMITTEE MEMBERS OF OUR
PANELISTS.
WELL I'M ACTUALLY BEFORE YOU EGO
AYE. ARM
SO IT IN TERMS YOU KNOW I THINK
WE.
ONE OF THE REALLY IMPORTANT
ISSUES.
FOR ME IS WE'RE LOOKING AT THIS
A AT THE.
BUT IT'S THE BEST ENGAGEMENT O
FORCES US TO RECOGNIZE THAT.
NO OUR PENSION FUNDS
ARE.
REALLY HELD IN TRUST FOR. OUR
THAT THAT THE RETIREES RIGHT.
WE'VE MADE OUR.
LOCAL GOVERNMENT SERVICES SCHOOL
THIS YEAR MADE PROMISES.
THAT WE NEED TO KEEP AND.
AND IN FACT.
DAY MAY HAVE GIVEN UP THINGS AT
THE BARGAINING TABLE IN ORDER TO
MAINTAIN THEIR PENSIONS SO.
ULTIMATELY.
THESE THEIR YOU KNOW FUNDS WHAT
WE WILL CERTAINLY.
AND IT'S IMPORTANT THEIR LOOK
LINE OF THEIR VALUES BUT. ALSO
WE NEED TO RECOGNIZE THEY ARE
HELD IN THAT TRUSTS
FOR ARE. FOR WERE OUR RETIREES
BILLS CURRENT ANY AND AND AND
FUTURE RETIREES BASED ON THOSE
FOR THOSE PROMISES.
.
WAS.
TERMS OF FIVE AND.
WELL YOUR DO YOU REPRESENT AN
ORGANIZATION THAT HAD THAT AS A
FUTURE RETIREES AS WELL.
IDIOTS IN TERMS OF.
LOOKING AT.
.
YES WERE TRYING TO MOVE FORWARD.
HOUSE OUT BECAUSE
AND I APPRECIATE YOUR
TESTIMONIES ARE HOW DO YOU THINK
IN TERMS OF.
.
WE GOT STIRS AND PURRS PURRS
EVEN LARGER RIGHT ANA HOW LARGE
PSYLLIUM IS BUT IN TERMS OF YOU
KNOW GIVEN THE SIZE OF THE THAT
THOSE BUT THOSE FUNDS.
THAT.
THIRD OF
BALANCE BETWEEN SAYING WELL YOU
BECAUSE YOU MADE REFERENCE TO
YOUNG DIVESTMENT IS BEING ONE
WAY TO PUT SOME PRESSURE BUT
ALSO ENGAGEMENT.
YEAH THAT IF YOU'RE NOT ACTUALLY
A STE.
SHAREOWNER.
YOU HEAR IT OUT OF YOUR ABILITY
TO ACTUALLY ENGAGE THEREFORE
DIMINISHES AS WELL I MEAN
CERTAINLY YOU SENT A SIGNAL BY
SAYING WE'RE JUST HOPE OUR MONEY
THERE BUT. MAYBE WE CAN PERHAPS.
R. MIGHT TOUCH ON THAT.
THAT WE.
ILLEGAL.
THEY'LL FIND.
AND HIS RIGHT.
HOMEOWNERSHIP.
IBM.
PUBLISHED BECAUSE YOU ARE.
WAY.
BUT THAT'S WAY HIGH ALSO. HOMES
BROWN.
IF NEW EVENYOU SAY OKAY OUR
ATHLETES. ALL BETTER TIME.
BUT YOU DON'T KNOW.
OKAY MAKING FUNNY BUT WE MONITOR
PASSED.
I HARDLY THINK.
MOBILE AS PART OF THE WHOLE
THING.
ALLEVIATE ONE ASPECT THAT HAS
NOT BEEN
CONTINUOUSLY CONSIDERED IS
EVALUATING THE EFFECTIVENESS OF
THE PREVIOUS PROPOSALS SOME
DIVESTMENT MEASURES.
FOR EXAMPLE SUDAN YOU NO LONGER
HAVE ONE SUDAN ANYMORE BUT YET
THERE HASN'T BEEN A MECHANISM TO
REEVALUATE SHOULD THAT BE CHANGE
SHOULD BE ELIMINATED ACCEPT IRA
SO. IF YOU HAVE A POLICY
MECHANISM WHERE YOU'RE LOOKING
AT DID YOU TO ACHIEVE THE POLICY
GOAL THAT YOU SET OUT TO
ACHIEVE.
IN ADITION WHERE THERE ANY
FISCAL IMPACTS OF THAT AND WHO
IS PAYING THE PRICE
SO IF YOU'RE ABLE TO LOOK AT
THAT FROM A LONGER TERM
PERSPECTIVE FROM AS A BODY THAT
MIGHT HELP. THIS INSTITUTION TO
FIND A WAY THAT MIGHT BE THE
MOST EFFECTIVE IN HAVING NOT
CONVERSATION PROVIDED THAT. THE
FIRST STEP IS ENGAGEMENT AND
THAT YOU'VE SUCCESSFULLY I USE
ALL THE TOOLS THAT YOU HAVE IN
THAT TOOL BOX AND THEN EVALUATE
IF YOU ARE GOING TO TO PULL THAT
TRIGGER WHO'S GOING TO PY THE
COST IN IS THERE AGREEMENT THAT
THAT'S THE APPROPRIATE PLACE TO
PLAY DOT. COSTS
THE DILEMMA THAT WE HAVE IS THAT
YOU USED TO HAVE.
DIVESTMENT ISSUES SPORADICALLY
DISCUSSED THAT IS NOT THE CASE
ANYMORE WHICH IS ABOUT CREATING
A BIT MORE PRESSURE SO IF THERE
IS A WAY THAT THIS BODY CAN PULL
ALL OF THOSE DISCUSSIONS INTO
ONE'S SO INSTEAD OF HAVING
NUMEROUS BILLS INTRODUCED
REGARDING DIVESTMENT. IF THAT IS
GOING TO BE THE TREND IS THERE
AN OPPORTUNITY FOR YOU TO SAY
LET'S EVALUATE ALL OF THESE RANK
ALL OF THESE AND ALSO ASSESS THE
CUMULATIVE COST. AND THEN DECIDE
WHICH DIRECTION YOU WANT TO GO
IN THAT MIGHT AT LEAST HELP THIS
BODY TO FIND A MORE EFFECTIVE
WAY TO HAVE A MACRO DISCUSSION
ON WHAT IT IS THAT YOU'RE TRYING
TO ACHIEVE.
I WOULD JUST ADD THAT THOUGH I
THINK OUR MEMBERS REALLY THINK
ABOUT DIVESTMENT FROM A RISK AND
OFFER TO.
SO AS I DESCRIBED R. ENGAGEMENTS
ARE OFTEN REALLY FOCUSED ON
GETTING MORE INFORMATION ABOUT
HOW RISKY. THE BEHAVIOR OF THIS
COMPANY IS IN A MATERIAL WAY IN
A WAY I THINK IMPACT THE VALUE
OF THE COMPANY. AND THE VALUE OF
OUR LONG TERM HOLDINGS FOR THE
PENSIONS.
IF YOU THINK FROM THAT RISK
PERSPECTIVE THEN IT FELL OVER
TIME OUR ENGAGEMENTS LEAD US TO
THE CONCLUSION THAT THESE
COMPANIES FOR EXAMPLE THE OIL
AND GAS COMPANIES. REALLY ARE
NOT MOVING IN THE WAY THE WHOLE
ECONOMY IS MOVING THEY'RE GOING
TO BE STRANDED ASSETS THEY'RE
GOING TO BE LEFT BEHIND. SOME
COMPANIES ARE MUCH WORSE THAN
OTHERS WE MAY WANNA UNDERWEIGHT.
AND SO RATHER THAN SAYING A
BLANKET DIVESTMENT WE MAY SAY
WELL THESE ARE JUST TOO RISKY
FOR THE PORTFOLIO WE REDUCE OUR
HOLDINGS IN THESE.
WE OP OUR HOLDINGS IN
OPPORTUNITIES AS JODY DESCRIBED
LOOKING FOR COMPANIES THAT ARE
REALLY GOING TO PRODUCE VALUE IN
THE LONG RUN AND THAT'S. THAT'S
THE WAY MANY OF OUR MEMBERS TALK
ABOUT THIS THEY DON'T TALK ABOUT
A ONE TIME GET OUT AND STAY OUT.
BUT RATHER REALLY THINKING ABOUT
RISK MANAGEMENT ACROSS THE
PORTFOLIO A FROSTED.
YES THAT IS AMERICAN DOWN I I
HAVE A QUESTION MAYBE IT'S BEEN
ASKED IN A DIFFERENT MANNER AND
MAYBE IT'S NOT FOR THIS PANEL
MAYBE IT'S FOR SUBSEQUENT PANEL
MAYBE IT'S ARGUMENT ANSWER.
BUT JOE YOU COME FROM A CONCORD
SOCIALLY RESPONSIBLE FUND. IS
THAT CORRECT.
SO WHAT'S WHAT I WANT TO KNOW IS
WHAT'S THE COST OF GOING THAT
DIRECTION.
FIRST A FUND THAT REALLY DOESN'T
LABEL ITSELF.
SOCIALLY RESPONSIBLE WHAT'S THE
IMPACT.
S. STIRS AND PURRS INDIVIDUALLY
ON THAT HAS THERE BEEN ANY IN
MAYBE MAYBE THIS FOR ANOTHER
PANEL MAYBE THIS CHANCE QUESTION
CAN'T BE ANSWERED TODAY. BUT HAS
THERE BEEN A REPORT PRODUCES
SHOWS.
WHERE WOULD WE BE HAD WE NOT
GONE THIS DIRECTION VERSUS?
THAT'S ACTUALLY BEEN ONE OF THE
QUESTIONS THAT.
THAT WE'VE ASKED.
THAT'S THE QUESTION THAT ARE IN
IN ILLINOIS IS HAS BEEN ANSWERED
OF IT IT IS YOU KNOW MAYBE I
JUST.
CERTAINLY THAT'S SOMETHING THE
BOARDS OF SISTERS AND PURRS HAVE
LOOKED AT.
AND.
SO IN THEIR DISCUSSIONS
THEY'VE ASKED ME.
SO IN I THINK THERE'S ARE SOME
ANALYSES AVAILABLE WE WILL WE
WILL HAVE THE INVEST THE
THE DIRECT THE THE DCS AND AND
AND AND AND ADDRESS IMPRESSIONS
FROM FROM BOTH FUNDS. IN THE
FUTURE ENOUGH PANEL LATER ON SO
I THINK YOU MIGHT YOU COULD ASK
THEM THAT.
AS WELL IT THEY MAY ACTUALLY
HAVE MORE SPECIFIC NUMBERS AND
OTHER THEY MAY BE NODDING THEIR
HEADS RIGHT. THOUGHT PAT ARE NOT
I DON'T KNOW THAT ONLY BLACK BUT
CERTAINLY THERE'S BEEN SOME WORK
DONE IN THAT AREA IS IS REALLY
THAT'S. WHAT WILL WANT TO KNOW?
WHAT I WANNA?
YOU A MORE.
FOCUSES
COST.
THAT IF YOU'RE INVESTING
ENVIRONMENTAL SOCIAL GOVERNANCE.
MATTER AND IF YOU'RE.
THANK YOU MY TAKING IT TO RISK
ADJUSTED PERFORMANCE.
LIKE I THINK THERE'S AN AREA
THAT NEARLY OUT OF STUDIES OUT
THERE THAT HAVE PROVEN THAT
THAT'S NOT THE CASE. BUT THE
OTHER IDEA OF COST IS THE COST
OF ACTUALLY THEIR VESTING THE
FUNDS AND THE PROCESS OF DOING
MATH AND ROLLING INTO MORE
ENVIRONMENTALLY SOCIALLY
RESPONSIBLE.
INVESTMENT AND THE IDEA THERE IS
THAT THERE ARE TYPICAL
REBALANCING SESSIONS TO FUNDS
THAT ARE MANAGED SO THERE WOULD
BE A MORE NATURAL WAYS OVER A
PERIOD OF THREE TO FIVE YEARS.
TO DIVEST FROM CERTAIN POOR
PERFORMERS AND INVESTING GOOD
PERFORMANCE.
AND WITH THE AVAILABILITY OF ALL
DIFFERENT KINDS OF WAYS TO
MANAGE IN A SOCIALLY RESPONSIBLE
MANNER NOW THERE'S TONS OF.
MASSIVE PRODUCTS OUT THERE
THERE'S A LOT ACTIVE PRODUCTS
THERE'S A LOT OF WAYS TO MANAGE
IT BUT IN TYPICAL REBALANCING.
THE COSTS OF SWITCHING THAT
PORTFOLIO SHOULD BE FAIRLY.
BUT BUT STILL THAT THE LONG TERM
INVESTMENT IS MY QUESTION IN AND
THAT'S ONE OF THE QUESTIONS THAT
THAT WE'VE BEEN WORKING WITH AYE
CAL STIRS ON FOR QUITE A NUMBER
OF YEARS AND WE'VE BEEN ASKING
FOR FOR EXAMPLE. A GIVEN ALL THE
CURRENT DIVESTMENT DISCUSSIONS
THAT ARE TAKING PLACE NOW THAT
HAVE TAKEN PLACE OVER THE LAST
NUMBER OF YEARS WE'VE ASKED CAN
YOU PUT TOGETHER IF THESE
DISCUSSIONS HAD. TAKEN PLACE A
DECADE AGO AND YOU WERE TOLD TO
DIVEST WHAT WOULD HAVE BEEN THE
COST IMPLICATION WHAT WOULD THE
RATE OF RETURN HAVE BEEN BECAUSE
AT THE END OF THE DAY. IF
DIVESTMENT AND X. Y. OR Z. MEANS
THAT YOU'RE NOT GOING TO BE ABLE
TO ACHIEVE A SEVEN PERCENT RATE
OF RETURN THAT DOES HAVE A
DIRECT IMPACT ON THE
CONTRIBUTION RATES THAT
EMPLOYERS ARE PAIN. THAT ARE NOT
ONLY OUR MEMBERS BUT
PARTICULARLY NEW MEMBERS THAT
WERE HIRED AFTER TWO THOUSAND
THIRTEEN OUR PAIN AND THEN
ULTIMATELY IN ADDITION BECAUSE
OF THE COMPLEXITIES OF AB
FOURTEEN SIXTY NINE. THE GENERAL
FUND ALSO PAYS FOR THAT SO IN A
SENSE YOU'RE TAXING EDUCATORS IN
YOUR TAX IN THE STATE TO MAKE
THAT DECISION WHICH IS WHY WE'VE
ENCOURAGE A FISCAL DISCUSSION.
SO THAT THERE'S A TRUE
UNDERSTANDING OF WHERE THOSE
COSTS MAY BE OUT WHICH IS WHY WE
WOULD ENCOURAGE ANYTIME YOU'RE
HAVING A DISCUSSION ABOUT
DIVESTMENT. TO ENSURE THAT
YOU'RE ASKING IF THERE WERE TO
BE LOSSES
WHO WOULD COVER THOSE LOSSES IS
GOING TO HELPED US HAVE A BETTER
SENSE IN IT MAY NOT EVEN BE. A
MEDIA BUT TO ENSURE THAT YOUR
CHECKING WITH THE INVESTMENT
DIVISIONS OF COUNSELORS AND
CALPERS AS THOSE DISCUSSIONS ARE
HAPPENING TO KNOW WHAT THE
ULTIMATE CONTRIBUTION RATE
IMPACT WHICH SHOULD BE THE STATE
BUDGET.
WELL WE HAVE WE HAVE ARGUED FOR
US WOULD YOU GO YOUR YOU CAN'T
WE HAVE ARGUED ARE PER OUR
PERSPECTIVE FOR THE CALIFORNIA
TEACHERS ASSOCIATION IS.
WE WOULDN'T HAVE A PROBLEM WITH
DIVESTMENT DOES IF THE
LEGISLATURE WOULD INDEMNIFY THE
FUNDS.
BUT DOT CONVERSATION HASN'T HAS
NOT ALWAYS MOVED THE DIRECTION
THAT WE WOULD LIKE.
BUT IF THE IF THERE IS A
REALIZATION THAT THERE'S A COSTS
AND.
AND THE GENERAL FUND WOULD PICK
IT UP THAT'S A DIFFERENT
CONVERSATION BUT SOME OF THESE
COSTS ARE EXTREMELY LARGE WELL I
HOPE AS WE AS WE MAY SEE MORE
THESE BILLS WILL SEE. THIS YEAR
THAT THAT CONVERSATION IS HEAD
OF THE TABLE AT THE AT THE
HEARING LEVEL. IN EVEN EVEN ON
THE BUDGET SIDE AS TO HOW.
THESE YOU KNOW THESE BILLS ARE
GOING TO BE PAID FOR
THE STATUTES ARE GOING TO BE
PAID FOR.
THANK YOU.
BUT COOLEY.
I'M OR JUST WANT TO COMMENT ON
THE GENERAL TOPIC A LITTLE BIT.
I THINK THIS IS A VERY IMPORTANT
HEARING I'M VERY APPRECIATIVE OF
OPENING THIS SUBJECT MATTER.
ARM.
BUT INTELLECTUALLY I FEEL IT'S
IT'S JUST A START.
YOU KNOW THE PICTURE COMES TO
MIND TO ME IS YOU KNOW. YOU'RE
WEARING THAT SWEATER AND HASN'T
LOSE
LOSE.
BETTER.
THREAT ON NEW GRABBED IT JUST
KEEPS COMING.
I THINK THIS IS A PART OF MUCH
LARGER WHOLE.
ARE VOTERS A COURSE IN JUNE OF
NINETEEN EIGHTY FOUR ADOPTED
PROPOSITION TWENTY ONE BY FIFTY
THREE PERCENT THE VOTE.
IMPOSING AN EXCLUSIVE AND SOUL
FIDUCIARY DUTY ON PENSION
SYSTEMS.
COULD MINISTER THE FUNDS.
FOR THE BENEFICIARIES.
SOLE AND EXCLUSIVE.
THEIR JOB.
SCREW SIMPLY SOLELY
I THINK WE NEED TO RECKON WITH
THAT FACT IN OUR STATE
CONSTITUTION.
I WON A POINT OUT THE TO PRODUCE
JURY DUTY IS ABOUT PRUDENCE.
AND IN THAT NINETEEN EIGHTY FOUR
BALLOT PROPOSITION IT WAS NOT
SIMPLY THE CRUDENESS OF ORDINARY
INVESTOR.
WAS APPROVED SEVEN INVESTOR
FAMILIAR WITH THESE MATTERS
WHICH IS ACTUALLY COULDN'T.
EXPERT STANDARD.
SO ON THEIR BACKS.
IS THE PRUDENT EXPERTS STANDARD
AS TO HOW THEY ADMINISTER THESE
FUNDS.
I THINK WE NEED TO RECOGNIZE
THAT THE WORLD HAS CHANGED
DRAMATICALLY SINCE NINETEEN
EIGHTY FOUR.
S. ESCALATES THE COMPLEXITY OF
THIS PAST.
THE NATURE OF SYSTEMIC RISK IN
THE ECONOMY THE GLOBAL ECONOMY.
ARE.
THE RISE THANK YOU TROLLING FOR
BEING PRESENT YOUR SORT OF THE
THE MARKER FOR THIS PIECE THE
CONVERSATION.
A GREAT RISE IN SPECIALIZED
SERVICE PROVIDERS TO BRING.
BRING SKILL SETS
THAT THEY WISH TO MARKET A
PENSION FUNDS TO ASSIST THEM.
PENSION FUNDS IN THEIR WORK BUT
NONE THE LESS IT IS THE JOB OF
THE PENSION FUNDS.
TO EXERCISE OWN DISCRETION IN
THE WHO ARE THE EXPERTS SAY
HIGHER.
AND COURSE THE GREAT RULE OF
EXPERTS IS EXPERTS SHOULD BE ON
TAP BUT NEVER ON TOP.
SO ONCEAGAIN WE'RE LEFT WITH
THE PENSION SYSTEMS AS HE SOLIS
WHO SERVED
RESPONSIBLE PARTIES.
AND THEN MORE GLOBALLY.
DRAMATIC DRAMATIC INCREASES THE
COMPLEXITY INVESTMENT
ENVIRONMENT.
CONFRONTING THESE ENTERPRISES
GLOBALLY IN OUR INVESTMENT
PROTOCOL.
SO HONESTLY I THINK IS THE
LEGISLATURE THIS WHERE MY THREAD
STARTS COMING UNDONE.
IF WE'RE ASK OURSELVES WHAT IS
THE RESPONSE ALLEGED TO SUPPORT
PENSION SYSTEMS.
CALPERS CALPERS THE COUNTY
SYSTEMS
OTHERS AROUND THE COUNTRY.
IT OUGHTA BE MAKING SURE THAT
THE. CALPERS CAL STIRS
OUR FREED UP TO INVESTED
INTELLECTUAL LABOR THAT IS
REQUIRED.
TOO MAKE SURE THEY'RE INVESTMENT
STRATEGIES ARE WELL ADAPTED.
THE GLOBAL INVESTMENT
ENVIRONMENT.
SO I PERSONALLY FEEL THAT THE
THIS APPEAL THAT WE WE.
TAKE A CLOSE LOOK AT SOME OF
THESE ONES THAT WANNA.
YOU KNOW HE JUST QUIT.
POOR FOLLOW THIS WAY TRIGGERED
THIS WINTER FOR SOME PURPOSE.
THOSE ARE NOT JUST BILLS
ENUNCIATED POLICY THOSE ARE
BILLS INVITED AN OPPORTUNITY
COST ON THE PENSION FUNDS TO
DIVERT THEIR INTELLECTUAL
ASSETS.
FROM THESE GLOBAL THINGS INTO
VITAL FOR THEM TO ADDRESS IS A
PART OF THEIR FUTURE
RESPONSIBILITY.
ARE.
AND AND TO GET DOWN THE WEEDS OF
OR SMALLER THINGS WHICH A
RESPONSIBILITY OF IN FARM.
WHEN I ACTUALLY THINK THE GAME
IS ELSEWHERE EVER PENSION FUNDS
ARE GONNA BE WELL ADMINISTERED.
AND.
AS I SAY YOU KNOW THIS.
COULDN'T STUDIO WHICH IS A PART
OF THE DUTY OF A FIDUCIARY DUTY
WHICH IS THE CONSTITUTIONAL
STANDARD.
THE FIDUCIARY DUTY ALSO INCLUDES
THE DUTY OF LOYALTY.
WHICH MEANS YOU WILL NOT GET
YOURSELF DIVERTED FROM FOCUSING
ON THE BEEN FISHERIES.
AND THAT OUGHT TO BE HAD
MONITORING THE LEGISLATURE THAT
THEY HAVE A DUTY OF LOYALTY.
ALSO IMPARTIALITY.
THAT THEY SHOULD CONDUCT THEIR
WORK AS A FIDUCIARY IMPARTIAL.
FOCUSED ON THE RESULT WHICH THEY
ARE CHARGED WITH.
AND I JUST FEEL THAT THE.
THIS IS A VERY CRITICAL TIME
FOR.
ARE PENSION SYSTEMS.
IT IS A CRITICAL TIME FOR THE
ACTUAL QUESTION HOW DO WE GIVE
THOUGHT LEADERSHIP ON HOW TO.
OPERATE IN THE GLOBAL ECONOMY.
EXTREMELY CRITICAL.
AND NOT JUST FOR THE BOTTOM LINE
OF THESE PENSION FUNDS FOR OUR
TAXPAYERS.
BUT YOU KNOW I'M ALWAYS REMINDED
THAT IN THE.
IN THE NINETEEN EIGHTIES WHEN I
WAS ACTUALLY SENT THE WHARTON
SCHOOL OF BUSINESS BY THE STATE
ASSEMBLY ON POTENTIAL INVESTMENT
WORK.
.
YOU KNOW FIFTIES SIXTIES MOST
AMERICAN WORKERS WERE COVERED AS
YOU KNOW BY PENSION FUNDS.
WE THEN HAD A RESEARCH ADOPTED
IN NINETEEN SEVENTY FOUR.
THE DUTY OF LOYALTY OF PENSION
FUNDS BECAUSE A RECIPIENT OF THE
PRIVATE SECTOR PENSIONS.
AND THE DUTY OF LOYALTY FOR
PRIVATE PENSION ADMINISTRATORS.
WAS EXPRESSED IN A.
I FORGET THE DATE I'LL COME UP
WITH THAT A NINETEEN NINETY
EIGHT ADVISORY LETTER FOR THE US
DEPARTMENT LET LABOR THE AVON
LETTER.
WHICH TOLD PRIVATE PENSION
SYSTEMS.
THAT THEY COULD NOT RESPOND IN
THEIR INVESTMENT STRATEGY.
TO THE PROTOCOLS REQUESTED BY
THE GOVERNING BOARD A
CORPORATION.
BECAUSE OUR DUTY OF LOYALTY WAS
TO THEIR PEOPLE.
WE JUST WE JUST DID A KIND OF
FOCUS ON HOW WE SUPPORT. PENSION
FUNDS.
WELL EQUIPPED TO DEAL THE MODERN
INVESTMENT ENVIRONMENT.
BECAUSE FRANKLY IN THE ECONOMIC
DOWNTURN IS THE PENSION FUND
WHICH IS THE FLY WILL HELP CISCO
FAR AWAY BACK.
THE EXISTENCE OF SECURITAS
HOMELESS PEOPLE LADEN THEIR
CAREERS RETIRAR.
RETIRE IF THEY WISH.
TO OPEN UP ENTRY LEVEL POSITIONS
FOR NEW COLLEGE GRADUATES.
AND OF THOSE PEOPLE IN
RETIREMENT WHO HAVE PENSION
SECURE PROJECT AND SPEND MONEY
AND SUPPORT OUR ECONOMIC
RECOVERY.
SO THEY ARE UNIQUE FLY WE. AND I
THINK THIS CONVERSATION'S HOW DO
WE PERPETUATE THAT FI WILL.
OPERATE IN IN OUR ECONOMY EVEN A
DOWNTURN. FOR A LONG TIME SO
THANK YOU VERY MUCH SHELVE THANK
YOU.
THANK YOU HUBS.
SO THEY KNOW THE QUESTIONS AND I
THINK VERY MUCH THANK THE SAP
PANEL THANK YOU VERY MUCH FOR
YOUR PRESENTATIONS.
JUST BELOW HOUSEKEEPING BEFORE
WE MOVE ON AND I KNOW I'M.
SIGNIFICANTLY TO BLAME.
BUT WE DO HAVE TO FINISH UP BY
NOON.
IN THIS ROOM BECAUSE ANOTHER
COMMITTEE IT'S HAVING A HEARING
AND WE ARE FOLLOWING A QUITE A
BIT BEHIND.
SO.
ALTHOUGH IT'S PROBABLY MORE OUR
FAULT APPEAR THEN THE
PRESENTERS.
ASK PEOPLE TO BE CONCISE AND I
THINK ACTUALLY THE MORE CHANCE
WE HAVE FOR DIALOGUE I THINK.
THE WE'RE GOING TO PROBABLY GET.
MORE OUT OF THE HEARING AS WELL
SO I'M HOPING THAT.
.
MAKE THAT HAPPEN AS WELL SO.
.
YEAH I THINK WHETHER THINGS
THAT.
BELLSOUTH DEPRECIATE IS IS THAT
I HEARD LOVE THE STRATEGIES
WERE.
FAIRLY NEW ONCE I SEE THAT
PERHAPS BEING PURSUED BY THAT
BOARDS AND THAT AND THAT AND THE
PEOPLE ADMINISTERED RESPECTED
PENSION FUNDS WHAT HAPPENS HERE
IS THAT WE HAVE SOMEONE YOU KNOW
WE HAVE STAKEHOLDERS TO WRITE A
BILL AND THEN.
IF SO THEY DON'T KNOW WHAT
ENGAGEMENT HAS R. HAPPENED YET
ARE THAT DID NOT WRITING BILL
SAYING LET'S ENGAGE IN A DON'T
ENGAGE THAT WILL THREATEN TO THE
VAST THEN WILL THREATEN TO THE
IS OF OURS IS LIKE JUST GOING
PLEASE THEY BEST.
SO THAT'S FUN THE CHALLENGES
THAT WE HAVE TO DEAL WITH HERE
AND.
SO THEY APPRECIATE MY
COLLEAGUES YOU'RE TALKING ABOUT.
YOU KNOW HOW DO WE BETTER TREAT
PROCESSES THAT.
ABSENT THAT KEEPS R. IT KEEPS US
IN MIND AND THE LEGISLATURE
ABOUT WHAT WHAT YOU KNOW.
THE RESPONSIBILITIES WE HAVE IN
TERMS OF.
OVERSEEN THE PENSION FUNDS AND
THAT'S WHY. I CHAIR RODRIGUEZ
AND I FELT THAT THIS HEARING WAS
SO IMPORTANT TO HAVE SO WITH
THAT LET'S GO WE GO AHEAD BRING
UP.
R. NEXT PRESENTER. BUT HEALTHY
CALIFORNIA ACTUAL ADVISORY
PANEL.
I KNOW WE.
GIVE YOU A BIT MORE TIME IN
WHICH SO I TO FOR THAT TO YOU
SIDE AGAIN.
CAN HELP US AT THE TIME
APPRECIATED AND DESK EARLIER
WORDS OF A VERY IMPORTANT
VALUABLE TO US NO NO PROBLEM
THANK YOU VERY MUCH I'M GONNA
APOLOGIZE IN ADVANCE I'M GETTING
THEM AT THE END OF THE COLD. FOR
I'M HOPING YOU ALL CAN NOW HEAR
ME JUST FINE CHAIRMAN PAN
CHAIRMAN NOT RODRIGUEZ.
MY PLEASURE AND MY HONOR TO DE
TO SPEAK TO YOU AND OTHER
MEMBERS OF THAT COMMITTEE.
I'M GOING TO BAB BUT BE
RELATIVELY QUICK IN GOING
THROUGH THE INFORMATION THAT I
HAVE I I CERTAINLY WOULD
ENCOURAGE SHOULD.
QUESTIONS AS AS WE GO I'M
REALLY GONNA TALK ABOUT FIVE
THINGS RELATIVELY QUICKLY A VERY
BRIEF HISTORY OF THE CALIFORNIA
NATURAL ADVISORY PANEL.
WILL TALK ABOUT THE REASON I'M
HERE WHICH IS GOVERNMENT CODE
THAT SECTION.
TWENTY TWO TWO NINE WILL TALK
ABOUT THE MAIN VALUATION RESULTS
PROVIDED BY CALPERS THE ROLE OF
THE INVESTMENT RETURN AND THEN
THE RULE OF THE GUY IMMUNIZATION
AREA. SO FIVE THOUGHT CALIFORNIA
ACTUAR LIVE FIVE THREE PANEL WAS
ESTABLISHED BY SB ELEVEN TWENTY
THREE BACK IN TWO THOUSAND AND
EIGHT.
AND DOW WERE HOUSED IN THE
STATE COMPTROLLER'S OFFICE OB
HISTORICALLY WE HAVE.
GUN AYE SEVERAL THINGS BUT MOST
NOTABLY FOR THINGS.
.
THE.
WE PREPARED A MODEL DISCLOSURE
ELEMENTS FOR ACTUARIAL
VALUATIONS WE'VE PREPARED. BY
ACTUARIAL FUNDING POLICIES AND
PRACTICES FOR BENEFIT CHANGES WE
PREPARED. A DOCUMENT AYE HELPING
OUR PUBLIC AGENCIES ABOUT YOUR
WEIGHT.
PUBLIC SECTOR ACTUARIAL
SERVICES AND ARGUABLY MOST
NOTABLY WE PREPARED A DOCUMENT
THAT HAS ACTUALLY BEEN USED
AROUND THE COUNTRY AS I DIED
FOR.
ACTUARIAL FUNDING POLICIES AND
AND PRACTICES FOR PUBLIC PENSION
AND AND OPAP.
.
THE.
THIS PARTICULAR YEAR WE.
TOP PROVIDED RESPONSES TO THE
STATE COMPTROLLER'S OFFICE.
ON QUESTIONS RELATIVE TO THEIR
HIGH COMPENSATION DATABASE I
FAMILY REPITE UP PREPARED
RESPONSES TO THE DEPARTMENT OF
FINANCE ARE RELATIVE TO SB
EIGHTY FOUR.
AND THEN ANNUAL PAP FOR.
COMPENSATION LIMIT LADDER.
GOVERNMENT CODE SECTION TWENTY
TWO TWO NINE.
THAT REQUIRES THAT A CALPERS
BOARD TO PREPARE A REPORT WITH
SOME SPECIFIC INFORMATION IN IT.
OUGHT THAT REQUIREMENT WAS MET
WITH THE PUBLIC PUBLICATION OF
THE JUNE THIRTY TWO THOUSAND AND
SIXTEEN VALUATION REPORT I PUT
UP. A LINK IN THE HANDOUT TO DO
THAT REPORT I'M NOT.
NOT GOING TO GO THROUGH ALL
HUNDRED AND WHATEVER IT IS
THIRTY FIVE PAGES OF OF THAT
REPORT.
AND BUT IT ALSO REQUIRES THAT
CALIFORNIA ACTUARIAL ADVISORY
PANEL CHAIR OR DESIGNEES FIVE
I'M THE DESIGNEES. ARE. BAD TO
Y. PROVIDE INFORMATION TO THE.
JOINT HEARING A EXPLAINING THE
ROLE OF THE INVEST RETURN IN THE
VALUATION DESCRIBING THE
CONSEQUENCES OF FUTURES TO
FUTURE STATE BUDGETS IF THE
INVEST FOR ATTORNEYS NOT THAT.
AND REPORTING WHETHER OR NOT THE
BOARDS IMMUNIZATION PERIOD
EXCEEDS THE ESTIMATED AVERAGE
REMAINING SERVICE PEER YOU HAD.
FOR THE FOR THE MEMBERS.
FOR ALL ALL PLANS COMBINED.
HUNDRED AND SEVENTY ONE BILLION
DOLLARS.
THE OFF.
THANK YOU THANK YOU SO MUCH I
APPRECIATE BOTH.
BOB.
THE JOB MARKET VALUE OF ASSETS A
HUNDRED ELEVEN BILLION DOLLARS
FOR A NET UNFUNDED LIABILITY OF
FIVE FIFTY NINE AND A HALF
BILLION DOLLARS. THE PLAN IS
SIXTY FIVE PERCENT FUNDED
CALPERS IN THE REPORT PROJECTED
THE UNFUNDED ARE EXCUSE ME THE
FUNDED RATIO USING A SEVEN
PERCENT DISCOUNT RATE. TO BE
SIXTY FIVE PERCENT AT JUNE
THIRTIETH SEVENTEEN AND THEN.
THE JOB I CONTRIBUTION RATES
VARY BASED ON PLAN THE COMBINED.
CONTRIBUTION RATE AS A
PERCENTAGE OF PENSIONABLE WAGES
IS THIRTY POINT FIXING TO SAY
THAT AMOUNT ACTUALLY VARIES
QUITE A BIT.
FROM.
ONE ONE PLAN TO THE NEXT.
.
THE GUIDE CHANGES FROM PRIOR
VALUATION AND IN. DECEMBER TWO
THOUSAND AND SIXTEEN THE CALPERS
BOARD.
DECIDED TO REDUCE THE DISCOUNT
RATE FROM SEVEN A HALF DOWN TO
SEVEN AND THEY'RE REALLY DOING
IT INCREMENTALLY WITH THE IMPACT
OF EACH OF THOSE CHANGES THINGS
STAND OVER A FIVE YEAR PERIOD
SOME FOR EXAMPLE. THE JUNE
THIRTY SIXTEEN REPORT USED TO
SEVEN AND THREE EIGHTHS
DISCOUNT RIGHT.
INITIAL IMPACT AND SEVENTEEN
EIGHTEEN FULL IMPACT ONE TWENTY
ONE TWENTY TWO FISCAL YEAR.
AND THEN IT JUNE THIRTY
EIGHTEEN THEY WILL GET TO A
SEVEN PERCENT DISCOUNT RATE I'M
INITIALLY IMPACTING NINETEEN
TWENTY FULL IMPACT TWENTY THREE
TWENTY FOUR. FISCAL YEAR I SAW
THE ROLE PLAYED BY THE
INVESTMENT RETURN I'M GOING TO
APOLOGIZE I'M TRYING TO TALK AS
QUICKLY AS I CAN HERE.
THAT SAID I'M AT LET'S YOU KNOW
IF EVERYBODY SHOULD UNDERSTAND.
.
I ASSETS TO PAY BENEFITS COME
FROM TWO SOURCES
AND THOSE TWO SOURCES ARE
CONTRIBUTIONS INTO THAT SYSTEM
INTO THE PLAN. AND INVEST FOR
RETURN ON THE INVESTMENT
STUTTERING THAT ARE THERE ARE
THERE IS NO THIRD EDITION ALL
FLOORS.
SO I'M WHEN ACTUAR A SIGNAL LOOK
AT WHAT THE ARM GOT AVAILABLE
ASSETS ARE GOING TO BE WHAT THEY
DO IS USE AN ASSUMPTION FOR WHAT
FUTURE INVEST FOR RETURN IS
GOING TO BE THAT'S REALLY WHAT
WE. I JUST TALKED ABOUT CALPERS
IS IS ASSUMING DROPPING TO THAT
SEVEN PERCENT ASSUMPTION BUT
EVERYBODY. EVERYBODY SHOULD
UNDERSTAND. IF INVESTMENT RETURN
IS HIGHER THAN EXPECTED THAT
MEANS CONTRIBUTION CAN BE LOWER
ON THE OTHER HAND IF INVESTMENTS
ARE LOWER THAN EXPECTED. THAT
MEANS CONTRIUTIONS HALF TO BE
HIRED SINCE.
PART OF THAT ARGUABLY.
ZERO ZERO SUM GAME HERE.
.
IT IS ALSO IMPORTANT UNDERSTAND
WE TALK ABOUT AN ACTUARIAL
LIABILITY WHAT WE'RE TALKING
ABOUT IS THE PORTION OF THE
BENEFITS EXPECTED TO BE PAID
FROM CASH SO. IT ARGUABLY WOULD
NOT INCLUDE.
AYE ANTICIPATED INVESTMENT
RETURN.
THERE IS IN THE REPORT OP
PROVIDED BY CALPERS AYE SEVERAL
PAGES ON MY MY. MY MY OPINION I
DON'T WORK AT CALPERS CERTAINLY
MY OPINION IS THAT SECTION OF
THE REPORT IS QUITE WELL DONE
EYES ON PAGES THIRTY SIX TO
FIFTY I WOULD ENCOURAGE YOU ALL
TO LIVE. I TAKE A MINUTE AND AND
TAKE A LOOK AT THAT.
.
THE. GOAL OF ANY RETIREMENT
SYSTEM ARGUABLY SHOULD BE TO
MOVE TO A HUNDRED PERCENT
FUNDING. AND BOB THE THE WAY IT
WORKS IS THE AMORTIZATION PERIOD
IS THE TIME ANTICIPATED TO GET
TO THAT HUNDRED PERCENT FUNDING.
ARM AND AND.
THE SHORTER THAT THE SHORT OF
THE IMMUNIZATION PERIOD THE
HIGHER THE CONTRIBUTION RATES
THE LOWER THE INTEREST THAT THAT
WOULD BE PAID WHAT THAT REALLY
IS DOING IS SET MEANS.
CURRENT TAXPAYERS ARE PAYING FOR
THE UNFUNDED LIABILITY THE
LONGER THE AMORTIZATION PERIOD.
MORE INTEREST IS PAID AND
CURRENT AND FUTURE TAXPAYERS ARE
PAYING FOR MORE OF THE UNFUNDED
LIABILITY FATHER IF THIS.
THAT THE RED STATES BOB PUSH AND
PULL IF YOU WILL AS TO WHO'S
RESPONSIBLE FOR THAT UNFUNDED
LIABILITY WILLIE IMMUNIZATION
PERIOD. REALLY DRIVES THAT IF
YOU TAKE A LOOK AT THE VERY LAST
SLIDE YOU SEE THE. BOB EVERY
GENERALIZATION PERIOD GENERALLY
SPEAKING WE'RE TALKING ABOUT
IMMUNIZATION PERIODS THAT ARE
ARE IN THEIR TWENTIES TO THIRTY
YEAR PERIOD. THE.
THAT GENERALLY SPEAKING THE COT
ESTIMATED.
AVERAGE REMAINING SERVICE
PERIOD SUBSTANTIALLY BELOW THAT
TEND TO TEN TO TWELVE YEARS
FELLOW THE. CURRENT.
AIM IS ASIAN PERIODS ARE ALL
NOTICEABLY LONGER THAN THE
AVERAGE REMAINING AYE SERVICE
PER IT.
FAX MATTER IS IS I CAN KEEP
TALKING BUT I WILL LOUDLY LEAVE
IT UP TO YOU ALL.
APPRECIATE THANK YOU SO MUCH FOR
YOUR PRESENTATION.
QUESTIONS FROM COMMITTEE
MEMBERS.
IT WILL ALSO BY JESTING A BIT
BUT LET ME LET ME ASK YOU.
.
THERE.
COUPLE QUESTIONS US SO.
DO IT S. OF CAN YOU JUST
ELABORATE PERHAPS JUST BRIEFLY
ON THE TALK ABOUT THE
AMORTIZATION PERIOD THE AVERAGE
AVERAGE A SPIRIT BEING
POTENTIALLY TWICE AS LONG AS.
THE AVERAGE
MAY SERVICE PERIOD SO.
BUT.
BUT DOES THAT MEAN I HAVE FOR
ALL OF US VIA YEAH WHAT WHAT IT
MORE LIEVENS TERMS YEAH WHAT IT
WHAT IT WHAT IT MEANS
PARTICULARLY SENSE GENERALLY
SPEAKING HE IMMUNIZATION.
APPROACH IS A LEVEL PERCENTAGE
OF PAY WHAT THAT MEANS IS ARE
THE LONGER THE IMMUNIZATION
PERIOD THE MORGUE THAT IS BEING
SHIFTED TO OUR FUTURE TAXPAYERS
SO. IT IT ALSO MEANS.
CURRENT BUDGETS ARE A LITTLE BIT
EASIER TO LA ALTHOUGH IN MOST
MOST MOST OF MY CLIENTS MOST
PUBLIC AGENCIES WOULD DISPUTE
THIS.
CURRENT BUDGETS ARE A LITTLE IT
EASIER WITH A LONGER
IMMUNIZATION PERIOD THAN WITH A
SHORTER. PERIOD BUT YOU'RE
REALLY SHIFTING THAT THAT TO
FUTURE TAXPAYERS.
OKAY I'M SOMEWHAT MORE TONTO TO
QUESTION ON YOUR WHAT YOUR
PERSPECTIVES ON VALUE BASE
INVESTING.
PHIL LET ME GIVE YOU MY CAVIAR.
BOB I'M AN ACTUARY NOT AN
INVESTMENT ADVISOR.
POT SO I HAVE A.
SIGNIFICANT AMOUNT OF INTEREST
IN THAT QUESTION.
BOB BUT I'M NOT SURE SHOULD PAY
ATTENTION TO MY ANSWER.
I THINK SAID THAT.
I'M NOT PARTICULARLY BASHFUL
ABOUT GIVING AN OPINION ON STUFF
I'M NOT QUALIFIED TO GIVE AN
OPINION KNOWN AS LONG AS
EVERYBODY UNDERSTANDS THAT.
AYE FIELD.
I AS AN ACTUARY I FEEL AS A
LIFETIME RESIDENT OF THE STATE
FAMILY WHO HAS WATCH CALPERS AND
CAL STURGE FOR A LONG TIME.
THAT OUGHT TO THE EXTENT THAT
YOU CAN. DO THAT SORT OF
INVESTING WITH OUT HAVING AN
ADVERSE IMPACT TO THE TAXPAYER.
I'M A BIG FAN OF THAT I I. I AM
NOT SMART ENOUGH TO UNDERSTAND
HOW YOU CAN DO THAT SORT OF
INVESTING WITH OUT HAVING AN
ADVERSE IMPACT ON THE DISCOUNT
RATE THAT.
AND SO I WILL ADD.
JUST MAKE ONE MINOR CORRECTION
TO THE TO THE STATEMENT THAT WAS
MADE IN THE FIRST PANEL. YOU
SHOULD NOT LOOK AT WHETHER THIS
HAS AN IMPACT.
BOB RELATIVE TO THE SEVEN
PERCENT DISCOUNT RATE IF THE
INVESTMENT RETURN WILL BE LOWER
IF THERE IS A COST ASSOCIATED
WITH DOING MASS.
BUT MADISON COST THE TAXPAYERS
MUST BEAR THAT'S INDEPENDENT OF
WHETHER THE INVEST FOR RETURN IS
FIVE PERCENT OR WHETHER THE
INVEST FOR RETURNS FIFTEEN
PERCENT. AND SO MY MY COMMENT IS
TO THE EXTENT THAT YOU CAN DO IT
WITHOUT A COST.
BUT BUT AGAIN PLEASE REMEMBER MY
CAPITA.
AS AN ACTUARY SO YOUNG.
THE BOARD HAS SAID SEXUALLY
INVESTMENT GOALS RIGHT WE'VE
LOWERED DOWN TO SUFFERS AS A
DISCOUNT RATE.
IT IS SO IS YOUR DOING ACTUARY
ANALYSIS
YOU JUST TAKE THAT.
GOAL OR DO YOU HAVE A QUESTION
LIKE WELL ACTUALLY THE AND AND
IT'S THIS CHALLENGING BECAUSE
RETURNS OF COURSE CHANGE EVERY
YEAR WERE KINDA LOOKING LONG
TERM I KNOW THAT'S WHAT THE
INVESTMENT FOLKS ARE LOOKING AT
WE.
WELL THAT PENSION FUNDS ARE IN
THE LONG TERM.
.
AND IT CERTAINLY ANY TIME WHICH
IS A DISCOVERY HAS SIGNIFICANT
CONSEQUENCES.
CONTRIBUTIONS AND SO FORTH.
SO WHAT'S YOUR PERSPECTIVE ON.
THE SETTING OF THE DISCOUNT RATE
BOB. BACH I'LL GIVE YOU COUPLE
OF COMMENTS AS QUICKLY AS
POSSIBLE COMMENT NUMBER ONE IS I
THINK IT SHOULD BE AS
TRANSPARENT AS POSSIBLE. THAT'S
NUMBER ONE NUMBER TWO.
AYE IVAN.
BUT DOING ACTUAR WORK FOR A LONG
TIME.
DISCOVERED IS. BAD NEWS ALWAYS
HURTS MORE THAN GOOD NEWS IF YOU
PUT THOSE TWO ON A TEETER
TOTTER.
BAD NWS WAYS MORE PHIL I AM A
FAN OF HAVING A SMALL MARGIN FOR
I REFER TO IT AS KIND OF A
MARGIN FOR ADVERSE DEVIATION SO.
MARGIN FOR BAD NEWS IF YOU WELL
FELLOW.
WIDE PERSONALLY OF LOOKED AT
CALPERS DEVELOPMENT OF THE
DISCOUNT RATE WE ARE FIRM. DOES
NOT IN ANY WORK WE DO WE DON'T
PAY ATTENTION TO WHAT CALPERS
DOES BUT IT'S OUR RESPONSIBILITY
INFLECTED DISCOUNT RATE UP ON ON
ON ON OUR SHELF.
A.
I M. A LITTLE NERVOUS ARM. THAT
WHAT CALPERS HAS DONE IN
SELECTING THE DISCOUNT RATE IS
RELY A LOT ON. ANTICIPATED
INVESTMENT RETURN BEYOND THE
NEXT DECADE SO A INVESTMENT
ADVISORS.
ARE.
INCREDIBLY RELUCTANT TO LOOK AT
INVESTMENT RETURN BEYOND THE
BEYOND THE NEXT COUPLE OF YEARS
BUT THEY ALL GIVE. AND EXPECTED
RETURN OVER THE NEXT DECADE KIND
OF THE ACTUARY'S JOB TO TAKE
THAT AND SAY WELL.
WHETHER OR NOT WE WERE NOT
EXPECTED TO BE AROUND FOR THE
NEXT DECADE WERE EXPECTED TO BE
AROUND FOR THE NEXT.
WHEN THIRTY FIFTY A HUNDRED
YEARS.
AND SO IT'S THEIR JOB TO TAKE
THAT INFORMATION AND ANTICIPATE
WHAT THE RETURNS ARE GOING TO BE
NOT JUST IN THE NEXT DECADE
BEYOND THAT.
I'M A LITTLE WORRIED THAT
CALPERS IS BEING.
IT IS RELYING AYE TOO MUCH ON.
ANTICIPATION THAT MARKETS WILL
RETURN TO HIS. AVERAGES WHICH
GETS TO WALK HIGHER ANTICIPATED
RETURN YOU CAN KIND OF SEE THAT
IN WHAT THE INVESTMENT ADVISORS
ARE TALKING ABOUT THEY'RE
TALKING ABOUT A. SIX POINT ONE
PERSON EVER TO RETURN OVER THE
NEXT DECADE CALPERS OF USING SAP
AND THEN AND WHAT THAT REALLY
MEANS IS CALPERS SIX PACKS
INVEST RETURN BEYOND TEN YEARS.
TO MAKE UP THAT DIFFERENCE. I'M
I'M JUST PERSONALLY WORRIED.
THAT THAT IS.
BEING MORE OPTIMISTIC
THEN.
MIGHT BE APPROPRIATE IN THE
INTEREST OF FULL DISCLOSURE BUT
MOST OF MY CLIENTS WANT THE
DISCOUNT RATE TO BE AS HIGH AS
POSSIBLE SO THEY CAN FIT INTO
THEIR BUDGETS.
SOMETIMES THE JOB AN ACTUARY IS
TO TELL PEOPLE WHAT THEY DON'T
WANT TO HEAR THOUGH.
JUST ASK.
ALRIGHT ANY OTHER.
ALRIGHT WELL THANK YOU THANK YOU
SO VERY MUCH I HOPE YOU COVER
FROM NICOLE THE HEAD SO I DO
THINK NIGHT THANK YOU. SO MUCH.
OKAY SO I'D LIKE TO BRING UP
BURDEN NEXT VOLKOFF PANEL. WE
ADD MISTER DEREK WHEN EXCEL IT'S
COUNCIL CAPTIVE VISORS GROUP
PROVIDING THE PLAY PERSPECTIVE A
POTENTIAL EFFECTS OF PENSION
PUBLIC PENSION INVESTMENT A
POLICY. WELCOME.
AND YOU THINK YOU CHAIR.
GOOD AFTERNOON OR GOOD MORNING
CHAIR MEMBERS DEREK CLINICS ON
BEHALF OF A HANDFUL OF SCHOOL
EMPLOYER ASSOCIATIONS AND
AGENCIES INCLUDING THE
ASSOCIATION OF CALIFORNIA SCHOOL
ADMINISTRATORS. THE SCHOOL
EMPLOYERS ASSOCIATION OF
CALIFORNIA IN THE SMALL SCHOOL
DISTRICTS ASSOCIATION.
BEFORE GETTING INTO THE HARD THE
TOPIC I WANNA PUTTING CONTACTS
CONTEXT WHITE SO IMPORTANT FOR
US AS SCHOOL EMPLOYERS TO ENGAGE
ON THIS ISSUE.
WE ALL KNOW THAT A QUALITY
EDUCATION ARE PARTICULARLY A
QUALITY PUBLIC EDUCATION IS ONLY
AS STRONG AS THE EDUCATORS AND
STAFF AT THOSE SCHOOLS.
MANY OF THOSE PEOPLE ENTER THE
PROFESSION FOR THE LOVE OF THE
WORK BUT A MAJOR REASON WHY MANY
STAY OR FOR THE BENEFITS.
AND SO THAT'S NOT LOST ON US IN
THE CONNECTION BETWEEN PUBLIC
EDUCATION.
AND PENSIONS SPECIFICALLY GOES
FAR BEYOND JUST CONTRIBUTION
RATES AND DISCOUNT RATES FOR US
IT COMES DOWN TO RETIREMENT
SECURITY BECAUSE THAT'S WHAT
WE'RE OFFERING OUR EMPLOYEES.
TO STAY IN A FIELD FOR HOPEFULLY
THEIR ENTIRE CAREERS WHETHER
IT'S AS AN EDUCATOR A STAFF
MEMBER OR ADMINISTRATOR AND THIS
HELPS US DO THAT.
NOW THEM MOTIVATIONS BEHIND MANY
OF THE DIVESTED HER.
MEASURES THAT WE'VE SEEN IN THE
LEGISLATURE ARE VERY
UNDERSTANDABLE FROM OUR
PERSPECTIVE WERE MEMBERS OF THE
CALIFORNIA COMMUNITY WE SHARE A
LOT OF THOSE VALUES. AND OUR
SCHOOL EMPLOYER CERTAINLY AREN'T
IMMUNE TO THOSE PLEASED TO WORK
ON THESE PARTICULAR ISSUES BUT
THERE ARE TWO REASONS IN
PARTICULAR THAT I WANNA
HIGHLIGHT TODAY.
FOR WHY WE FAVOR ENGAGEMENT OVER
MANDATED DIVESTMENT.
IN THE FIRST IS THAT WE BELIEVE
THE LONG TERM SUSTAINABILITY OF
OUR PENSION FUNDS MUST BE
PRIORITIZED OVER.
INVESTMENT MANDATES THAT MIGHT
HAMPER WITH THE ABILITY FOR THE
SYSTEMS TO MAXIMIZE RISK
ADJUSTED RETURNS
AND RISK ADJUSTED IN OUR VIEW IS
A REALLY KEY PHRASE HERE.
BECAUSE IT DOES MEAN THAT WE
SHOULD JUST INVEST IN EVERYTHING
SIMPLY BECAUSE OF WILL MAKE THE
MOST MONEY I'M OF COURSE NOT A
AS THE FIRST PANEL DESCRIBERS
ALWAYS GOING TO BE RISKS
INVOLVED.
WE HAVE TO BE COGNIZANT ABOUT
THAT IT'S JUST THAT OUR OPINION
IS THAT THE PEOPLE MOST
QUALIFIED TO MAKE THOSE RISK
ADJUSTMENT ADJUSTED DECISIONS
ARE THE FOLKS THAT SIT IN THE
BUILDINGS THAT CALTRANS AND
CALPERS. AND THE VARIOUS
CONSULTANTS AND CAN BY ADVISERS
THAT THEY USE NOT NECESSARILY ON
THE ONE OFF INVESTMENT MANDATES
THAT WE SEE FROM YEAR TO YEAR.
IN FACT IT'S THOSE MANDATES THAT
OF COST THE CALPERS SYSTEM IN
PARTICULAR.
OVER EIGHT OR EIGHT POINT FIVE
BILLION DOLLARS IN COUNTING
NOW SCHOOL EMPLOYERS REPRESENT
ABOUT FORTY PERCENT OF THE
CALPERS SYSTEM IN TERMS OF
MEMBERSHIP SO THAT'S A REALLY
BIG NUMBER FOR US.
I'M IN AS EMPLOYERS THIS MEAN
SIGNIFICANTLY HIGHER COSTS
FOR OUR EMPLOYEES IT REALLY
EXPANDS ON THE QUESTION MARK
AROUND RETIREMENT SECURITY.
SO ULTIMATELY WE IN THE
STAKEHOLDER COMMUNITY NEED FOR
FROM A COUPLE OF US TODAY WERE
ALL IN THE SAME BOAT WHETHER
YOUR EMPLOYERAND EMPLOYEE.
APPARENT OR RETIRE RE THE GOAL
AROUND STAYS DISCUSSION IN OUR
VIEW SHOULD REALLY BE ABOUT THE
QUESTION OF RETIREMENT SECURITY
AND WHETHER DIVESTMENT MANDATES
ON A ONE OFF BASIS.
ADVERSELY AFFECT OUR ABILITY TO
ACHIEVE THAT FOR EMPLOYEES
BECAUSE AGAIN IT ALL GOES BACK
TO OUR ABILITY TO PROVIDE
EDUCATIONAL SERVICES FOR
STUDENTS ACROSS THE STATE.
NOW I KNOW THAT I'M THE FIFTH
PANEL THE PARTICULARS GONNA
REALLY I TOUCH ON THIS ISSUE SO
I'M ONLY GOING TO MENTION IT A
WHICH IS THAT WHEN WE LEAVE THE
TABLE WE WHO HAVE THOSE
CALIFORNIA VALUES WHEN WE SELL
THOSE SHARES. WERE OFTEN SELLING
IT TOO INVESTORS WHO ARE.
MAYBE AGNOSTIC TO THOSE
CALIFORNIA VALUES AND THAT'S A
BIG CONCERN FOR US BECAUSE WE
SHARE THOSE VALUES AS WELL AND
SO WE WOULD MUCH RATHER SEE THE
LEGISLATURE FOCUS ON. HELPING
THE SYSTEMS MAXIMIZE THOSE RISK
ADJUSTED RETURNS
SO TO CONCLUDE DIVESTMENT
MANDATES HAVE A DIRECT IMPACT ON
THE ABILITY FOR SCHOOL EMPLOYERS
TO RECRUIT AND RETAIN THE BEST
EDUCATORS. AND ALSO IMPACTS OUR
ABILITY TO PROVIDE EDUCATIONAL
SERVICES WHEN WE PAY TO MAKE UP
THE DIFFERENCE ON THOSE
INVESTMENT LOSSES THAT I
MENTIONED EARLIER. SO I REALLY
ENCOURAGE THE COMMITTEE TO
CONSIDER A POLICY THAT WILL
HOPEFULLY REPLACE THOSE ONE OFF
DIVESTMENT MANDATE MEASURES
WITH AN APPROACH THAT WEIGHS THE
OPPORTUNITY COSTS AND KEEPS IN
MIND THE IMPACT. A CALIFORNIA'S
EDUCATIONAL SYSTEM.
THANK YOU VERY MUCH.
I THANK YOU THANKS VERY MUCH FOR
PRESENTATION.
IT'S BEFORE.
WE ASK QUESTIONS IT'S ALSO WANT
TO WELCOME US THEIR LEYVA WHO
SERVED WITH ME ON THE EDUCATION
COMMITTEE SO THAT IT FAR REASON
ALL OF US WERE LATE.
INNOVATIVE.
A ARE ALSO JUST A BRIEF COMMENT.
THAT REALLY APPRECIATE YOU
BRINGING UP.
.
THE FACT THAT.
RECOGNIZING NOW ONLY OF COURSE
WE HOLD THESE FUNDS IN TRUST FOR
PROMISES THAT WERE MADE THAT WE
HAVE A PUBLIC POLICY VERY POOR
PUBLIC POLICY REASON FOR
MAINTAINING. THE PUBLIC TRUST IN
THESE PENSIONS WHICH IS IS THAT.
THE RETIREES INITIATIVE.
.
BE ABLE TO KNOWLEDGE COURTS UP
TO RECRUIT BUT ALSO A IF THE
RETIREES THEMSELVES DON'T HAVE A
SOLID. SECURE RETIREMENT.
THAT SHE BECOMES A FUTURE COSTS
FOR US IN STATE GOVERNMENT WE
ARE FINE WE WILL BE FINE
YOURSELVES DEALING.
WITH THE CONSEQUENCES OF
POVERTY AND OTHER TYPES OF
THINGS.
WHEN AT AT AND FRANKLY MOST OF
THE PENSIONS THEMSELVES
THE CIRCUIT PEOPLE ABOVE WATER%
NOT THEIR NET NET IS NOT BIG
PAYDAY IT'S VERY MODEST SO. THAT
IT DOES SERVE A VERY IMPORTANT
PUBLIC POLICY GOAL WITH AID
TENET COST IRWIN IF IF WE DON'T
MAINTAIN STABILITY IN OUR
PENSIONS IS
AS WELL IN THAT. COST WILL BE
BORNE BY TAXPAYERS SO WOULD YOU
LIKE TO TALK ABOUT THE TAXPAYER
COST FOR THE PENSION THE LET'S
TALK ABOUT THE TAXPAYER COST.
THE FUTURE AS WELL FOR ARE THE
CONSEQUENCES OF OF OF OF HAVING
OURS STATE EMPLOYEES ARE
TEACHERS THAT MANY OTHER PEOPLE
COVERED BY THESE PENSIONS ARE.
NOW HAVING TO BE ON THE PUBLIC
DOLE POTENTIALLY SELL.
SHE DIED.
DO QUESTIONS FOR PANELISTS.
BUT
AS OUR LEYVA.
I WOULD JUST OF MAKE A COMMENT
THAT YOU KNOW I I TO WORRY ABOUT
THE DIVESTMENT.
BECAUSE I THINK OUR FIRST
OBLIGATION IS TO THE PENSIONERS
THE RETIREES ARE WHILE WE ALWAYS
WANT TO BE MINDFUL OF PEOPLE
THAT ARE.
YOU KNOW TOBACCO OR WHATEVER
INDUSTRY THAT WE CHOOSE AT THE
TIME THAT.
THAT WE DON'T LIKE TO BE
AFFILIATED WITH
WHEN WE DIVEST FROM ONE COMPANY.
I JUST THINK WE SHOULD ALWAYS
HAVE SOMEONE ELSE THAT WE'RE
GOING TO INVEST IN OR WIND UP
HURTING THE PEOPLE THAT WERE
TRYING TO PROTECT AND TO CENTER
PANTS POINT. IT WILL COST US IN
THE LONG RUN SO APPRECIATE YOUR
COMMENTS AND HAPPY TO BE HERE
AND HE.
THANK YOU THANK YOU VERY MUCH.
OKAY SO LET'S BRING UP OUR NEXT
PANEL.
WHICH ARE ACTUALLY.
YOU HAVE THE.
IS THERE A. MISTER JACQUI THIS
SO.
WELL NO ACTUALLY THOUGH DO WE
HAVE ENOUGH WE DO HAVE ENOUGH
CHAIRS FOR A FOREIGN.
NEED TO KILL US SIR IS THERE DO
YOU HAVE ANOTHER CHAIR WE CAN
BRING IN.
OUT THERE WE GO WE HAVE THERE'S
ANOTHER CHAIR.
ALRIGHT.
BECAUSE YOU KNOW WE'VE I HAVE
QUESTIONS FOR ALL FOUR OF YOU
ETCETERA.
SO FIRST ALIVE BUT I THINK.
JACQUI THE CEO OF FAT COW STIRS
AS WELL AS CHRIS ALMOND CHIEF
INVESTMENT OFFICER. AND THEN
MARS FROST THAT CEO OF CALPERS
WITH.
AND SIMPSON.
WHO'S THE.
IF INVEST IN OFFICE NOT A YEAR
THE STATE OF. I HAVE. A FULL
BLOWN.
OKAY.
AND I SAID LISTEN DIRECTORS THE
INABILITY FOR A CALPERS AS WELL
WELCOME. I WILL GO AHEAD WHAT
WILL WE GO AHEAD START WITH THAT
MISTER ENOS FIRST THEN WE'LL DO
CASTERS AND THEN A WHOLE WHICH
OVER TO A CALPERS SENDS A LOCAL
THANK YOU MISTER CHAIRMAN. AND I
THINK YOU COMMITTEE FOR DE
SCHEDULING THIS A VERY TOPICAL
ISSUE IT'S A ISSUE NOT JUST
BEING DISCUSSED HERE IN
SACRAMENTO BUT SPRINGFIELD IN
ALBANY AND.
TALLAHASSEE BECAUSE ALL PENSION
FUNDS ARE.
STRUGGLING WITH LIABILITIES AND
TRYING TO MAKE SURE THEY STAY
HEALTHY SO WE APPRECIATE THAT
VERY MUCH. OF THE LEGAL
FRAMEWORK THAT A SUBMARINE
COOLEY OUTLINED FOR ALL OF US IS
ABSOLUTELY BUT WE LIVE BY.
OF THE SYSTEM EVERY DAY.
SO I WON'T I WON'T REITERATE
THAT THAT WAS A PERFECT A LEGAL
HUNT DESCRIPTION OF WHAT WE DO.
AND YOU KNOW THE WORD I THINK I
WOULD LIKE TO LEAVE YOU WITH IS
WHAT YOU SAID MISTER CHAIRMAN A
MINUTE AGO AND WHAT WE THINK
ABOUT EVERY DAY AS THAT WORD
LONG TERM.
AND I HOPE WE'LL JUST KIND OF
ABSORBED THAT WHEN WE THINK
ABOUT THE ISSUE AND HOW TO FRAME
THE ISSUE HOW TO STRATEGIZE THE
ISSUE AND I. I GUESS I WOULD
LIKE TO PUT JUST A A HUMAN FACE
ON THIS RELATIVE TO CAL STIRRERS
WHEN WE TALK ABOUT LONG TERM
WE'RE. ONE THE OLDEST PENSION
FUNDS IN THE ENTIRE COUNTRY OVER
OVER A HUNDRED YEARS OLD IN WHAT
WE DO. OUR AT.
TWO HUNDRED TWENTY SEVEN
BILLION DOLLARS IN ASSETS THIS
WEEK
BUT MOST IMPORTANT ABOUT THE
PEOPLE THE SYSTEM TIS IS A
SYSTEM THAT IS PREDOMINATELY
FEMALE.
OB SEVENTY TWO PERCENT FEMALE
AND.
HERE'S A NUMBER TO TAKE HOME TO
YOUR FAMILY WE HAVE OVER THREE
HUNDRED RETIREES.
THAT ARE OVER A HUNDRED YEARS
OLD.
SO.
WELL IT IS YOU SHOULD APPRECIATE
THIS BUT I GIVE YOU THE NEXT
NUMBER IS THAT IS THAT WOMEN
BECAUSE BECAUSE OUR OLDEST
MEMBER IS A HUNDRED AND NINE.
YEARS OLD.
SO WHEN YOU THINK ABOUT THE
DECISIONS WE'RE GOING TO TALK
ABOUT TODAY AND HOW YOU AFFECT
OUR ABILITY TO FUND THOSE
PENSIONS.
THAT IT'S ABSOLUTELY FROM THE
CENTER ONE OF THE BIG WE GIVE
YOU TALKED A LITTLE BIT ALREADY
THIS MORNING BUT INVESTMENT
ASSUMPTIONS YOU DIDN'T TALK
ABOUT. CHANGES IN MORTALITY
ASSUMPTIONS AND WE JUST ADJUSTED
THOSE AT CAL STIRS.
AND AGAIN FOR WOMEN.
WOULD BE A NOW EXPECTED LIFE
EXPECTANCY FOR A WOMAN WHO
REACHES AGE SIXTY TWO WAS DOWN
NINETY YEARS. OLD.
IT'S NOT JUST A REMARKABLE
NUMBER BUT WHAT MOST OF
EVERYBODY ESPECIALLY PHYSICIANS
KNOW THAT WOMEN LIVE LONGER THAN
MEN BUT WHAT MOST PEOPLE DON'T
KNOW. IS THAT FEMALE TEACHERS
LIVE LONGER THAN FEMALES RIGHT
NOW THE ACTUARIAL ASSUMPTION
AROUND A FEMALE IN OUR SYSTEM.
IS SIX YEARS HIGHER.
BEEN A FEMALE IN THE GENERAL
POPULATION
SO WHEN YOU THINK YEAH I I WHO A
WE HAVE WE SHARE SO MANY THINGS
IN COMMON WITH CALPERS BUT WE
ALSO HAVE DIFFERENT DEMOGRAPHICS
AND
ACTUARIAL ISSUES BETWEEN THE
SYSTEM.
AND I I SAY THAT BECAUSE LONG
TERM IS ABSOLUTELY CHRIS AS
CHIEF INVESTMENT OFFICER WHAT I
THINK ABOUT EVER EVERY SINGLE
DAY.
NOW CREEK CHRIS AND I ARE THAT
OLD BUT I DO WANNA SAY THAT
CHRIS IS BEEN WITH US IS CHIEF
INVESTMENT OFFICER EIGHTEEN
YEARS I'VE BEEN IN
S. REALISTIC IO SIXTEEN YEARS.
SO WE HAVE BEEN THROUGH A LOT OF
ISSUES A LOT OF UPS AND DOWNS.
AND THE POINT YOU MADE
ABSOLUTELY. THE RECESSION HAS
REFRAINED RISK MANAGEMENT AND
HOW WE THINK ABOUT THAT IN THIS
BUSINESS NEWS SO RELEVANT OF
YOU'RE GOING TO TALK ABOUT
TODAY.
WE KIND OF YOURSELVES A CALPERS
WE WEAR THREE SETS A CO CLOSE
WITH THE CAMERA WHERE FINANCIAL
SERVICES ORGANIZATION
WE HAVE TO BEHAVE LIKE THE
PRIVATE SECTOR MOST DAYS OF THE
WEEK INTERACT WITH THE PRIVATE
SECTOR EVERYDAY. BUT THEN WE
COME HERE WITH YOU.
WE'RE STATE AGENCY WE'VE GOT
PUBLIC POLICY ISSUES IN OUR IN
OUR MIDST EVERY DAY AND WE'VE
GOT TO FIGURE THAT OUT.
BUT THE MOST IMPORTANT TRUMP
CARD IN THIS IS BEING THE TRUST
FUND.
AND BEING THE FIDUCIARY AS IT
MIXES WITH THOSE OTHER ISSUES.
YOU KNOW UNFORTUNATELY AND YOU
MAY SHARE THIS VIEW THE PUBLIC
VIEW WALL STREET IS NEGATIVE.
IT IS THERE'S A WONDERFUL
DOCUMENT THAT COMES OUT EVERY
YEAR CALLED THE ADLEMAN TRUST
BAROMETER MEASURES TRUST IN
BUSINESS.
UNFORTUNATE FINANCIAL SERVICES
SINCE THE RECESSION IS THE
LEAST.
TRUSTED.
INDUSTRY SECTOR OF ALL INDUSTRY
SECTORS AND I THINK THAT PART OF
IT IS THE ISSUE YOU'RE TALKING
ABOUT. THERE'S A PERCEPTION THAT
WALLSTREET OPERATES WITH LITTLE
REGARD OF THE SOCIAL IMPACT OF
WHAT WE DO.
SO I WANT TO MAKE SURE WE
CONTRAST THAT WITH WHAT WE SEE
HOW IT FRAMES ARE BUSINESS.
SO WE IN FACT DO HAVE VALUES AND
BELIEFS THAT GUIDE THE SYSTEM
THERE FORMALLY ADOPTED BY OUR
BOARD FACT KAREN YAMAMOTO KAREN
YET REGION.
IS WEBER BOARD MEMBERS.
SHE'S A TRUSTS A DE ANNA RETIREE
THAT IS ON OUR BOARD AND THEY
HAVE ADOPTED BELIEVES THAT ALL
REGION THE ONE THAT APPLIES TO
TODAY.
CALPERS BELIEVES THAT IN
ADDITION TO TRADITIONAL* IN
ADDITION TO RADITIONAL
FINANCIAL METRICS.
TIMELY CONSIDERATION OF MATERIAL
ENVIRONMENTAL SOCIAL AND
GOVERNANCE FACTORS IN THE
INVESTMENT PROCESS FOR EVERY
ASSET CLASS.
HAS THE POTENTIAL OVER THE LONG
TERM.
A POSITIVELY IMPACT INVESTMENT
RETURNS SO RATHER THAN PUSHING
AWAY FROM THIS ISSUE THAT WE'RE
TALKING ABOUT I WANNA MAKE SURE
YOU HEAR THAT WERE FOOT BRACE
THE.
AND CHRIS WILL TALK IN DETAIL
HOUSE EMBRACED INVESTMENT
STRATEGY BUT THIS IS AN OF
RUNNING FROM THE ISSUE.
IT'S EMBRACING IT TO SEE HOW THE
RISK MANAGEMENT.
THIS CAN IMPROVE WHAT WE'RE
DOING.
SO IT'S THE INTEGRATION OF THAT
INVESTMENT BELIEF THAT THE
CHALLENGE FORECASTERS.
AND OUT I JUST TO MAKE TWO FINAL
POINTS ONE IS YOU OFTEN TALK
ABOUT.
DIVESTMENT RELATIVE TO OIL AND
GAS THAT THAT BRINGS EVERYONE
INTO THE CONVERSATION. I WANNA
MAKE SURE YOU THINK OF ANY
BUSINESS THE WATER BOTTLES WHAT
HAPPENS THOSE WATER BOTTLES
AFTER WE DRINK OF THE CLOTHING
WE WEAR HOUSE THE WATER MANAGE
THE GOT INTO THIS CLOTHING. WHO
SOURCE THIS IN ANOTHER COUNTRY
IN CHILD LABOR?
BOARDS ARE THEY DIVERSE OR DO
THEY REFLECT A MALE DOMINATED
THINGS.
YOU THINK OF ANY INDUSTRY AND
THESE RISKS EXISTED THAT'S A WE
CANNOT DIVEST AWAY FROM.
WHOLE MARKET.
IT PERVADES ALL INDUSTRIES IN
WHAT WE DO CLOSING COMMENT IS
THE FUNDING I CANNOT SAY ANY AYE
SIX UP THIS POINT.
YOU TOOK MOMENTOUS STEP WITH US
IN TWO THOUSAND FOURTEEN TO PUT
US ON THE RIGHT TRACK THE
FUNDING PLAN IS ON TRACK.
BUT WE MUST CAREFULLY PROTECT
THAT FUNDING PLAN AND WHAT WE DO
WE'RE GOING TO DELIVER TO YOU IN
TWO THOUSAND NINETEEN A FULL
ANALYSIS OF THAT FUNDING PLAN.
TELL YOU WHERE WE ARE WITH IT
BUT IN THE MEANTIME WE DO AN
ANNUAL REPORT TO OUR BOARD TO
KAREN. AND THE OTHER TRUSTEES
AND THAT BOARD ANALYZES THE
RISKS AROUND THIS.
I'M GONNA LEAVE YOU ONE NUMBER
THAT SHOULD WORRY ALL OF US
HERE.
AND THAT IS IF WE MAKE THE WRONG
DECISIONS HERE THE WRONG
STRATEGIES AND MOVE WE IMPACT
THAT. ARE RETURNED JUST ZERO
POINT ONE PERCENT ZERO POINT ONE
PERCENT LESS THAN OUR
ASSUMPTIONS.
THAT WOULD HAVE A FISCAL IMPACT
OF EIGHTEEN PLUS BILLION DOLLARS
OVER THIRTY YEARS.
STATE TO SCHOOLS EXCEPT FOR
THAT'S THE MARGIN YOU GOTTA
THINK ABOUT WHEN YOU'RE DEALING
WITH THESE ISSUES.
SO SO PLEASE RECOGNIZE THE NEXUS
OF WHAT WE DO HERE TODAY.
AND THE FUNDING OF THE PLAN.
THANKS.
THANK YOU JACK.
TRY TO KEEP.
BOSTON GLOBE DOT.
BUT ABOUT HAAS AYE WILL BE
EFFICIENT BOOK IF.
A SENATOR SETTLEMENT THANK YOU
FOR HAVING THIS HEARING OF
PLEASURE TO BE HERE.
INVESTMENT WHEN ME LEAVE YOU
WITH A COUPLE CLEAR THOUGHTS
DIVEST SPENT IS AN ACTIVE CELL
DECISION.
YOU ARE TELLING US THAT THAT
COMPANY OR THAT INDUSTRY. IS NOT
ALLOWED FOR US TO INVEST IN.
AND YOU TAKE ARE VOICE OUT OF
THE DISCUSSION COMPLETELY.
WE GIVE A THOUGHT HOPEFULLY CAN
RELATE TO IF THERE'S SOMEBODY A
LANDOWNER IN YOUR DISTRICT AND
THEY'RE NOT HAPPY WITH WHAT
YOU'RE DOING.
ARE THEY BETTER OFF COMING TO
YOUR OFFICE MAKING AN
APPOINTMENT AND RAISING THEIR
VOICE.
OR SELLING THEIR LAND MOVING TO
THE NEXT DISTRICT.
YOU DON'T CARE IF THEY SOLD
THEIR LAND THEY DIDN'T SULFUR
LOST SOMEBODY ELSE BOUGHT IT.
WE DON'T WANT TO BOTHER YOU AT
ALL THAT'S WHAT OU DO TO US
WHEN YOU FORCE US INTO DIVEST
MEANT.
WE NOW HAVE TURNED OUR BACK AND
I CAN TELL YOU BECAUSE I MET
WITH COMPANIES THEY DON'T KNOW
OR CARE WHETHER WE OWN THE
STOCKS ARE NOT.
THERE ARE TWO WAYS TO INVEST
GENERALLY ACTIVE AND PASSIVE
JODY FROM TRILLION MENTIONED
THAT.
THE MOST EFFICIENT WAY IN
EXPERTS AGREE THE MOST EFFICIENT
WAY FOR US TO INVEST BILLIONS OF
DOLLARS IS TO DO IT IN A STYLE
CALLED INDEXING WE OWN THE
ENTIRE MARKET.
MANY OF YOU HEARD OF THE SNP
FIVE HUNDRED YOU HOLD ALL FIVE
HUNDRED STOCKS.
WE EMPEROR'S OWN BOTHER INDEXES
WE ON THREE THOUSAND STOCKS IN
THE UNITED STATES.
BUT WHEN WE START TO DIVEST ALL
OF A SUDDEN WE ON TWO THOUSAND
NINE HUNDRED AND SEVENTY TWO
STOCKS.
WE CAN'T TRADE WITH SOMEBODY
ELSE AS A WHOLE UNIT WE DON'T
OWN THE ENTIRE MARKET.
AND WE'RE STARTING TO CUT AWAY
AT THAT MORE AND MORE IN GETTING
CLOSER TO THAT ONE TENTH OF A
PERCENT THE JACK MENTIONED.
THAT'S GONNA EAT INTO OUR.
RETURNS GOING LONG TERM.
WE CARE PASSIONATELY ABOUT MANY
OF THE SOCIAL ISSUES AS JACK
SAID WE BELIEVE ANY S. T. WE
CARE ABOUT THESE THINGS.
BUT WE ALSO KNOW WE NEED TO EARN
A RETURN FOR THE FOR THE
STAKEHOLDERS.
THE VESTMENT IS LARGELY
SYMBOLIC.
IT'S MAKING A STATEMENT.
BUT IT COSTS US BILLIONS OF
DOLLARS.
SO WHEN WE MANAGE THE PORTFOLIO
WE WANT TO DO IT INCREDIBLY COST
EFFECTIVE
AND WHEN I LOOKED AT THE TITLE
OF YOUR HEARING.
REPRESENTING THE VALUES OF
CALIFORNIA TO ME AND MY STAFF
ARE FIRST IMPORTANT VALUE IS TO
ACHIEVE R. ESTIMATED RETURN.
IF THE COST OF THE SYSTEM AS LOW
AS POSSIBLE FOR YOU IN THE
MEMBERS.
THAT'S RIGHT IN THE CONSTITUTION
AS YOU CITED THAT'S OUR MANDATE.
SO WE SHARE THE VALUES OF
CALIFORNIA. IF WE MEET THAT
RETURN ASSUMPTION AND KEEP THE
COSTS LOW. THE MORE WE CHANGE
HOW WERE ALLOWED TO INVEST THE
MORE YOU RESTRICT UNIVERSE.
INCREASES ARE COST NOT ONLY ARE
OPPORTUNITY COST OF NOT BEING
ABLE INVEST IN THOSE AREAS. BUT
EVEN OUR TRADING COSTS THE
INABILITY FOR US TO MOVE THOSE
BLOCKS OF STOCKS AS AN ENTIRE
WHOLE UNIT.
AS JACK SAID WE EMBRACE CSG WE
HAVE A LOUD VOICE WE GO WHEN WE
MEET WITH MULTIPLE COMPANIES
WE'VE SENT OUR STAFF AND WE
BROUGHT ABOUT CHANGE. NOT AS
FAST AS OTHER PEOPLE OF WANTED.
BUT WHAT WE DO IS WE EDUCATE.
THE LIKE MY NAM THE EXAMPLE OF
THAT MEMBER IN YOUR DISTRICT
IT'S NOT HAPPY WITH WHAT YOU'RE
DOING. THEY'RE GONNA COME IN AND
TALK TO YOU YOU'RE GONNA HEAR
WHAT THEIR CONCERN IS AND SO
WE'RE GONNA EDUCATORS WHILE.
SO I WOULD ASK YOU TO REALLY
TAKE THE TIME TO THINK ABOUT
THOSE KINDA DIVESTMENT BILLS.
YOU'RE MAKING AN ACTIVE CELL
DECISION.
BUT THEN YOU ASK THE BOARDS WHO
ARE FIDUCIARY SO TO MAKE THAT
ACTIVE DECISION. AND AS I'M
SAYING WE DON'T KNOW SO I
BELIEVE AN ACTIVE MANAGEMENT ITS
PROVEN TO BE VERY EXPENSIVE AND
VERY TOUGH.
YOU WANT TO BRING ABOUT SOCIAL
CHANGE.
THIS HASN'T PROVEN EFFECTIVE
DIVESTMENT HAS NOT BROUGHT ABOUT
SOCIAL CHANGE.
BUT IT'S COST US BILLIONS.
A QUESTION CAME UP EARLIER
WHAT'S APOSTAS.
FIVE POINT FIVE BILLION IS WHAT
IT'S COST US TODAY MCALISTER'S.
THANK YOU IT AND WE WILL HAVE
SOME WILL HAVE SOME QUESTIONS TO
SAY I'M SURE IT WILL BE MORE
OPPORTUNITIES ELABORATE AYE
VOICE START WITH CALPERS AWAY
GET NOW WELCOME A CENTER MORE
LOCKED.
BEING HERE AS WELL.
.
THE ACROSS.
GOOD MORNING SENATOR PAN
ASSEMBLYMEMBER RODRIGUEZ AND
MEMBERS OF THE COMMITTEE. I'VE
HAD AN OPPORTUNITY SINCE COMING
TO CALIFORNIA TO INTERACT WITH
SEVERAL OF YOU ON ON THIS TOPIC
AS BILLS HAVE BEEN INTRODUCED.
TO REALLY SHARE THE CALPERS
POSITION ON DIVESTITURE.
AND RATHER THAN REPEATING MUCH
OF WHAT'S ALREADY BEEN SAID
BECAUSE I KNOW THAT YOU HAVE
QUESTIONS AND I ALSO PREFER THAT
INTERACTION IN THAT DIALOGUE.
AND I WE JUST HAD IT AT A COUPLE
OF COMMENTS AND I'M GOING TO
TURN IT OVER TO HE AND SIMPSON
TO GIVE YOU SOME VERY SPECIFIC
EXAMPLES OF WHERE WE THINK WE'VE
HAD SUCCESS WITH ENGAGEMENT.
AYE MR ELEOCHARIS HE WAS
SCHEDULED TO BE HERE WITH US
THIS MORNING IS AT JURY DUTY.
OTHERWISE I KNOW HE WOULD HAVE
HAVE ENJOYED THIS HEARING AS
WELL. SO JUST A LITTLE BIT OF
INFORMATION ABOUT CALPERS WE
SERVE ABOUT TWO TWO MILLION
MEMBERS ARE NOT INCLUDING THEIR
ENEFICIARIES ARE FUND IS AROUND
THREE HUNDRED FIFTY BILLION. ON
BUT OUR LIABILITIES WHICH IS
REALLY THE THE MEMBERSHIP THE
PENSION BENEFITS FOR ABOUT A
HALF TRILLION.
SO YOU TAKE THAT MATH AND THAT
LEASES TO ABOUT A SIXTY EIGHT
PERCENT FUNDED STAFF.
THAT IS THE NUMBER ONE THING WE
HAVE ON OUR MIND AT CALPERS IT'S
ON THE MIND OF THE INVESTORS.
WOULD LIKE TO BELIEVE IT IS AND
CERTAINLY ON THE MINDS OF OUR
BOARD.
WHEN WE TALK TO OUR MEMBERS WE
TALK TO OUR EMPLOYERS THE ONE
THING THE MEMBER IS MOST
CONCERNED ABOUT IS WHETHER THERE
BENEFIT IS SAFE.
IS THAT BENEFIT GOING TO BE
THERE AT THE TIME THAT I RETIRED
SO MOST CRITICAL THING ON THEIR
MIND OUR CONTACT CENTER IS
INUNDATED WITH PHONE CALLS
BECAUSE THAT SIXTY EIGHT PERCENT
NUMBER. IS ARE ALARMING TO THEM.
FOR THE EMPLOYERS AND THEY'RE A
VERY IMPORTANT STAKEHOLDER.
I HAVE WHAT'S MOST IMPORTANT TO
THEM IS THAT THE SYSTEM REMAIN
AFFORDABLE FOR THAT IT BECOMES
MORE AFFORDABLE.
AND SO WHEN WE LOOK AT DECISIONS
LIKE ACID ALLOCATION AND WE LOOK
AT DECISIONS LIKE DISCOUNT RATE
WERE BALANCING NOT
SUSTAINABILITY OF THE FIND BOTH
FROM THE MEMBERS PERSPECTIVE AS
WELL AS FROM THE EMPLOYER.
SO JUST QUICKLY I WE DID LEAVE
YOU SOME MATERIALS THAT TALK
ABOUT OUR INVESTMENT BELIEVES
MUCH LIKE CASTERS WE DO HAVE
BELIEFS THAT GUIDE OUR
DECISIONS.
AYE WE THINK THAT THE INVESTMENT
BELIEVES CREATE MORE OF A
COMMENT EXPECTATION AS WELL AS
DIRECTION FROM THE BOARD. FROM
OTHER STAKEHOLDERS INTO THE
INVESTMENT OPERATION ITSELF.
AND SO WHEN WE THINK ABOUT
NGUYEN TO ENGAGE ON ISSUE
OFFICIALLY FOR AIR AREAS ARE
FOUR THINGS THAT WE THINK ABOUT.
ON THE FIRST IS THE ALIGNMENT
WITH THE PRINCIPLES AND THE
INVESTMENT BELIEVES THAT AGAIN
YOU HAVE A COPY OF IN YOUR
FOLDERS.
AND THE SECOND IS WHETHER THE
ISSUE HAS A MATERIAL IMPACT ON
OUR FUNDS.
AND WE CAN GET INVOLVED IN A
NUMBER OF ISSUES IN A NUMBER OF
ITEMS THAT TAKE OUR EYE OFF THE
BALL THAT THE BALL REALLY IS
CREATING THAT MATERIAL. IMPACT
AND SIDE WORKING ON GETTING A
BETTER FUNDED STATUS FOR THIS
BOND.
AND THEN ALSO THAT OUR INFLUENCE
IS LIKELY TO GENERATE AND
MEASURABLE OUTCOME OR IF WE
PARTNER WITH PARTNERS LIKE CAL
CASTERS OR NEW YORK OR.
ATTACHED.
TEACHERS CAN WE ALSO MAKE OUR
VOICE WHICH IS LOUD ON ITS OWN I
WILL TELL YOU CALPERS HAS A VERY
LOUD VOICE WHEN WE ENGAGED.
BUT IT DOES BECOME MUCH.
MORE LOUD WHEN WE CAN.
PARTNER UP WITH SOME OF THE
OTHER PUBLIC PENSION PLANS.
AND IN THE FOURTH IS THAT WE
ACTUALLY OF THE CAPACITY THE
EXPERTISE AND RESOURCES TO
ENGAGEMENT IN THE RIGHT WAY.
SIGN UP BECAUSE THEY'RE GONNA
TURN IT OVER AND BECAUSE I THINK
IT'S REALLY IMPORTANT YOU HEAR
SOME VERY SPECIFIC EXAMPLES OF
WHERE WE THINK WE'VE HAD SUCCESS
AROUND ENGAGEMENT. AND AGAIN
WHEN I THINK DOCTOR PAN.
COMMITTEE MEMBER COOLEY AND
REALLY LOOKING AT THIS FROM THAT
MEMBER PERSPECTIVE AND THAT
PRUDENT PERSON AND THAT PRUDENT
EXPERTS AND THAT'S REALLY THE
ROLE OF THE RESPONSIBILITY OF
THE BOARD AS WELL AS THE STAFF
AT CALPERS.
I'M.
THANK YOU VERY MUCH A IS VERY
GOOD TO BE WITH HIS.
S. MORNING ARM MY JAVA CALPERS
IS TO TAKE THIS.
HIGHFALUTIN IDEA I'VE
SUSTAINABILITY AND TURN IT INTO
SOMETHING PRACTICAL.
AND.
AS MOLESEY REFERENCED IN OUR
INVESTMENT BELIEVES WE DON'T
TALK ABOUT THE IMPASSE ANGIE.
WE TALK ABOUT SUSTAINABILITY OF
THE FARM.
BECAUSE THAT'S OUR PRIME
RESPONSIBILITY TO OUR MEMBERS.
AND WHEN WE LOOKING ATTIRE
INVESTMENT RESPONSIBILITIES WE
ACKNOWLEDGE THAT WHAT I'LL DO
TWO YEARS IS TO MANAGE FINANCIAL
CAPITAL.
BUT THAT'S WHEN HIS ARM DOESN'T
PRODUCE FINALLY.
FINANCIAL CAPITAL HAS TO BE
JOINED WITH HUMAN CAPITAL.
PEOPLE COMMUNITIES
CONSUMERS SUPPLY CHAINS
HUMAN CAPITAL IS VITAL TO
INVESTMENT RETURNS.
AND WE ALSO KNOW THE PHYSICAL
CAPITAL WHAT SOMETIMES WITH
NATURAL CAPITAL IS VITALLY
IMPORTANT.
COMPANIES LOOKING AT ISSUES LIKE
WATER SHORTAGE WILL THE IMPACT
OF CLIMATE CHANGE ARM OF HAVING
TO MANAGE.
MAINSTREAM BUSINESS ISSUES
SO WHAT WE'VE DONE IN OUR
INVESTMENT BELIEVES IS RATHER
THAN TALK ABOUT YES GEE WE TALK
ABOUT LONG TERM VALUE CREATION.
AND THE NEED TO MANAGE THESE
THREE FORMS OF CAPITAL.
SO WHEN WE LOOK IT'S
ENVIRONMENTAL ISSUES OR LOOK AT
HUMAN RIGHTS OR LABOR ISSUES
WHICH TALKING ABOUT HOW DO THEY
PROTECT.
THE RISK AND RETURN OF THE FUND.
CERTAIN OUR EXPERIENCE A CALPERS
THIS IS NOT A TRADEOFF BETWEEN.
DO YOU DO THE RIGHT THING OR DO
YOU GO OUT THERE TO MAKE MONEY
WHAT WE KNOWING GLOBAL MARKETS
IS THAT COMPANIES NEED TO
RECRUIT THE BEST TALENT. THE
NEED TO BEHAVE RESPONSIBLY TO
MANAGE RISK AND CERTAINLY THEY
NEED TO BE TACKLING. THE RISKS
AS WELL AS THE OPPORTUNITIES OF
THINGS LIKE CLIMATE CHANGE.
SO WE DON'T JUST I SHOTS
OURSELVES IN A ROOM AND COME TO
THAT CONCLUSION WE WHEN WE
STARTED LOOKING AT A STRATEGY
FOR THE TOTAL FUND. WE DID A
VERY COMPREHENSIVE REVIEW OF ALL
THE ACADEMIC PAPERS THAT WERE
OUT THERE ON THE FIRST TIME
WHICH AFLOAT WE FOUND EIGHT
HUNDRED. AND THE SECOND TIME WE
TOOK A LOT LAST YEAR WE WERE
CLOSE TO TWO THOUSAND PAPERS
SO WE REALLY FEEL WE'VE GONE
ABOUT THIS IN A VERY RIGOROUS
WHY WE'D BE GLAD TO SHARE THE
EVIDENCE WITH YOU.
IT'S HELPFUL
SO JUST TO FINISH TWO PRACTICAL
EXAMPLES OF WHAT DOES THIS LOOK
LIKE WHEN YOU SAY THAT YOU'RE
GOING TO ENGAGE OWN FINANCIAL
HUMAN. AND PHYSICAL CAPITAL.
NOW CLIMATE CHANGE ARM IS AN
ISSUE THAT'S GOING TO AFFECT OUR
PORTFOLIO GLOBALLY.
AND IT'S NOT ALL DOOM AND GLOOM
IT'S NOT JUST A STORY OF EXTREME
TEMPERATURE AROUND EXTREME
WEATHER EVENTS.
I'M WATER SHORTAGE AND FLOODING
IS ALSO A STORY ABOUT
OPPORTUNITY.
IF YOU THINK ABOUT THE
TRANSITION IN THE WORLD'S ENERGY
SECTOR TO GO FROM HIGH COLTON TO
RENEWABLES THAT'S A THIRTY YEAR
TRANSITION WHICH THAT'S
FANTASTIC NEED FOR INVESTMENT.
I'M WONDERFUL OPPORTUNITIES FOR
INVESTORS TO TAKE.
SO WHAT WE WANT TO DO IS ENGAGE
THE COMPANIES AT THE HEART OF
THIS TRANSITION AND MAKE SURE
THEY'RE GOING TO MAKE THAT
TWENTY FIVE YEAR TRANSITION AND
STILL BE IN BUSINESS.
NOW IF WE WALK AWAY.
TWO THINGS ONE IS WAS RIGHT HE
SAID WE SALAS SHASTA SOMEONE
ELSE WHO MAY NOT SHARE THE
VALUES OF THE CALIFORNIA
REPRESENTS.
BUT ALSO WE'VE LOST THE
OPPORTUNITY TO HAVE ANY
INFLUENCE ACTUAL.
AND THERE IS MY WORLD GOVERNMENT
WHICH CAN DRIVE THIS CHANGE.
OWNERS OF COMPANIES HAVE THE
RESPONSIBILITY ON THE RIGHTS OF
THE OPPORTUNITY TO ACTUALLY
MITCHELL THIS TRANSITION TAKES
PLACE A LOT IS GOING TO PROTECT
INVESTMENT RETURNS FROM MEMBERS.
THE SECOND EXAMPLE IS DIVERSITY
AND INCLUSION.
WE SEE EXCELLENT EVIDENCE
THAT COMPANIES NEEDING TO
ATTRACT THE BEST TALENT
AVAILABLE NOT CONFINE THEMSELVES
TO ONE TINY SECTION OF THE
POPULATION.
DIVERSITY COLLUSION IS GOOD FOR
TALENT MANAGEMENT IS GOOD
FORENSURING YOU DON'T HAVE GROUP
THINK.
AS LAWSUIT.
SOCIAL JUSTICE REASONS TO FOSTER
DIVERSITY INCLUSION BUT WE SEE
THE GOOD RESULTS THAT COMPANIES
CAN CAPTURE IF THEY HAVE OF A
DIVERSE AND INCLUSIVE CULTURE.
SO WE'RE PURSUING NOT FROM AN
INVESTMENT POINT TRIBUNE
CURRENTLY.
WITH CAO STARS ARE A WITH
OTHER-FORMS WITH ENGAGING OVER
FIVE
HUNDRED COMPANIES RIGHT NOW
WHICH HAVE ENTIRELY MILD BOARDS.
BECAUSE WE THINK THAT'S
COMPANIES RUSHING MISSING OUT ON
THAILAND IS GOING TO HELP THEM
WITH RETURNS.
SO IN CONCLUSION I THINK THAT IS
A FALSE CHOICE.
A WHAT WAS ONCE CALLED BY THE
SEA OF JOHNSON AND JOHNSON IS
THE.
TYRANNY OF THE OR.
IT'S NOT EITHER COOL IT'S ISLAND
AND AS WELL LESS
SO IN OTHER WORDS I HAVE YOU IS
THAT BY FOCUSING ON HUMAN
CAPITAL. AND LOOKING AT PHYSICAL
CAPITAL OF THE ENVIRONMENTAL
ISSUES THAT ARE IMPORTANT WE
COMBAT SUPPORT TECH PENSIONS
BECAUSE WE GOT BASS OF RISK
MANAGEMENT AND WE ALSO HAVE GOOD
EVIDENCE WITH AND TO GET BETTER.
THANK YOU.
THANK YOU THANKS VERY MUCH.
QUESTIONS FROM COMMITTEE
MEMBERS.
.
CORD OKAY CENTER MORLOCK.
THANK YOU MISTER CHAIR.
WELL CHRIS.
.
I'VE ALWAYS OF. FALL THE DICTUM
THAT.
WHICH THAT MANAGERS MANAGE.
AND IT'S YOUR JOB.
TO INVEST THE FUNDS.
AND I'M EMPOWERING YOU TO DO THE
BEST YOU CAN COULD YOU GET THE
BLOOMBERG TERMINALS IN FRONT
IDEA.
YOU'VE GOT MONEY MANAGERS THAT
YOU'VE HIRED YOU GOT.
OUTSIDE MONEY MANAGERS INSIDE.
AND SO. YOU GET THE FAA'S SO SO
I WANT YOU TO TO DO THE BEST YOU
POSSIBLY CAN.
ON BEHALF OF THE TAXPAYERS
THAT'S ALL I'M ASKING.
SO I GUESS THE FIRST QUESTION
WOULD BE.
WELL WHEN DO YOU SAY TO THE
LEGISLATURE.
I THINK YOUR BILL IS
TERRIBLE AND EVEN IF YOU VOTE
FOR IT AND THE GOVERNOR SIGNS
THAT. WE'RE NOT GONNA DO.
SO WE'VE TAKEN.
USUALLY AT OPPOSED UNLESS
AMENDED POSITION ON EVERY SINGLE
DIVESTMENT BILL.
WE'VE TRIED TO PUT WORDS INTO
THE GOVERNOR COULD SAVE
REPRESENTATIVE ON OUR BOARD THAT
WE DON'T THINK THAT'S AN
EFFECTIVE WAY TO LIMIT US.
IN THE END R. BOARD HAS CHOSEN
TO THEN RESEARCH IT. THEY HAVE
NOT BECAUSE AGAIN MOST OF THE
DIVESTITURE HAVE BEEN FAIRLY
FINITE AND IN MATERIAL.
OUR BOARD HAS CHOSEN NOT TO TO
PULL UP THAT FIDUCIARY FLAG AND
SAYING NO.
BUT I WOULD HAVE SAY WERE
ACTUALLY GETTING VERY CLOSE TO
THAT AND SOME OF THE DISCUSSIONS
THAT ARE COMING OUT.
WELL YOUR REPORT SHOWS THAT.
BEEN LOSERS SO FAR RIGHT FELLOW
THERE BEEN I'VE BEEN APART OF
FIVE DIVEST AND STIRS DONE SIX
OVERALL AND RIGHT NOW ALL OF
THEM ARE.
PRODUCING NEGATIVE RESULTS WERE
UNDERPERFORMING DUE TO THAT WE
COULD.
.
SO.
DO YOU PROVIDE.
A COMPARISON TO LET'S SAY THE
FORTUNE ONE HUNDRED.
DB PLANTS IF THEY'RE STILL
ANNIE.
AND THEIR PERFORMANCE
SAY THE ANNUAL RATE OF RETURN
SAY AN AVERAGE.
COMPARED TO YOUR GREATER RETURN
AND THE CALPERS WRITER TRAIN SO
WE CAN. SHOW THAT YOU ARE
TRENDING WITH THE PRIVATE
SECTOR.
AND THEREFORE IF YOU'RE DOING
BETTER THAN YOU'RE ADDING VALUE
TO THE TAXPAYERS IF YOU'RE
DOING.
IF YOU'RE BELOW THE AVERAGE AND
THEN MAYBE WE HAVE AN
EXPLANATION.
I'M.
IT'S S. CENTER MORE LIKE KNOWS
IT INVESTMENTS A HIGHLY
COMPETITIVE FIELD SO WE HAVE
THOSE COMPARISONS TO US TO
PRIVATE SECTOR US THE PUBLIC
SECTOR LARGE SMALL AND EVEN NINE
U. S. PLANTS.
ASSET ALLOCATION IS THE BIGGEST
DETERMINANT OR WHETHER WE'RE
SUCCEEDING OR NOT.
AND IT'S REALLY HARD TO DIS
AGGREGATE THAT WHAT'S CAUSING
THE OUTPERFORMANCE R. UNDER
PERFORMANCE
BUT I CAN TELL YOU THAT IN OUR
CASE OF OUR PORTFOLIO WE'VE BEEN
TOP QUARTILE OVER.
THREE FIVE AND TWENTY YEARS ARM
UP RELATIVE TO PUBLIC PENSION
PLANS TO HAVE A LOOK TO
CORPORATE LATELY BECAUSE A LOT
OF THEM ONTO A LIABILITY TO.
PORTFOLIO SO THEY WOULD BE UNDER
PERFORM.
THOUGH IS THAT WE DO MEASURE TRY
AND SHOW WHETHER WE'RE ADDING
VALUE.
PUBLISHED
YES.
SO YOU COULD.
WHAT OUT THERE ON THE WEBSITE
PROVIDE THAT?
THE BIG ISSUE NOW OF COURSE IS
R. UNFUNDED LIABILITIES AND SO
NOW YOU'VE GOT YOUR PLANTS BY
SAYING.
THEY WERE HAVING DIFFICULT WERE.
WE'RE WE'RE BRICK WORD ACTUALLY.
COUNTING THE MONTHS.
WHEN WE RUN OUT OF CASH SO THAT
YOUR PRESSURE. YEAH BUT YOU'RE
STILL.
MANAGING.
PER VALUE AND YOUR FOCUS IS
STILL JUST TO DO THE BEST YOU
CAN WITH THE RESOURCES YOU HAVE.
REGARDLESS OF THE OUTSIDE
PRESSURES.
IT IS AN OUR REQUEST IS DON'T
NARROW OUR UNIVERSE DON'T LIMIT
OUR OPPORTUNITY SET ALLOW US TO
MANAGE THE PORTFOLIO WE'RE
INTEGRATING THESE VALUES WE
THINK IN THE WAY WE'RE INVESTING
IN AND. TRYING TO GET THE MAX
RARE RETURN AT APPROVED LEVEL OF
RISK AND AT THE LOWEST COST
POSSIBLE.
THE COMPUTER.
GUARANTEES.
BUT QUESTION TALK ABOUT.
THE BUILDINGS OF DOLLARS ㍹
IN THESE PREVIOUS DIVESTMENT
BILLS BUT ALSO WAS THE COSTS
ASSOCIATED RIGHT TO THOSE ALSO
CAUSES SO SHOULD OWN GUARDED AYE
VAST. HOW DOES THAT WORK ON HOW
MUCH LOSS OF THAT AS WELL?
YEAH THEIR TRANSACTION COSTS
WHEN WE SELL WE WE TRIED TO BE
EXTREMELY EFFICIENT MY EXAMPLE
TO TO YOU OF THE MEMBER IN YOUR
DISTRICT THAT'S NOT HAPPY
THEY'RE NOT GONNA THROW THEIR
HOUSE ON THE MARKET AND HURT
THEM SELVES. SO WERE LIKEWISE
OUR FIDUCIARY SONIC IMAGES DUMP
THE SHARES ON THE MARKET WE'RE
GONNA SELL THEM AS EFFICIENTLY.
THAT DOES CREATE TRANSACTION
COST AND THEN WE HAVE TO
REDEPLOY THAT CAPITAL WE ALSO
HAVE TO PAY A LOT OF EXTRA FEES
TO PEOPLE THE BILE THE SPECIALTY
INDEXES AND MEASUREMENTS.
SOME OF THE BOOK OF THE BILLS
THAT HAVE BEEN PASSED HAVE HAVE
LIKE THE SUDAN BILL THE RANDALL.
AB GEOPOLITICAL ISSUES THAT WE
HAVE TO HIRE OUTSIDE EXPERTS TO
REALLY TELL US.
WHAT IF THE FRENCH OIL COMPANY
AND WHAT ARE THEY DOING IN SUDAN
WHAT IS A CHINESE OIL COMPANY R.
INDONESIAN MANUFACTURED DOING IN
SUDAN BECAUSE WE'RE NOT THERE?
SO WE HAVE ADDED RESEARCH COSTS
AND ADDED INDEX BECAUSE.
THOSE ARE SOME MUCH SMALLER THAN
THE OVERALL DOLLAR LOSS OF THE
OF THE EXCLUDING THOSE
SECURITIES.
SO.
THOUGH I THINK IT'S SO MUCH FOR
YOUR PRESENTATIONS.
SO WHERE THINGS THAT'S COME UP
IS COURSE AYE AYE AYE I'D.
MY GUESS IS IS THAT.
MIKE MAY MY COLLEAGUES WILL NOT
STOP WRITING R. DON'T BE
STAKEHOLDERS WHO WON'T TALK
ABOUT THE BEST MEN AND WHAT
CERTAINLY I THINK ON ONE LEVEL
AND THE NOSE COMMENTED WELL THE
VESTMENT ISN'T VERY EFFECTIVE
BUT PEOPLE POINT TO EXAMPLES
LIKE APARTHEID SOUTH AFRICA
WHERE TEAMS LIKE THE VESTMENT.
WAS WHAT DROVE FINALLY DROVE.
SAID THE GOVERNMENT TO FINALLY
YELLED.
THAT DERIVE APARTHEID TELLING
PEOPLE I THAT.
WE CAN THAT SOME PEOPLE HAVE
DIFFERENT OPINIONS BUT.
OKAY WELL ANYWAY DOES APPEAL
TALK ABOUT.
THAT AS WELL AND I THINK. I'M
NOT SURE WE CAN JUST SIMPLY SAY
DIVESTMENT OVERALL DOESN'T DO
ANYTHING I MEAN.
I AM NOT SURE THAT'S A
REALISTIC.
ARGUMENTS MAKE AYE THINKING TALK
ABOUT HOW EFFECTIVE IT IS AND
THEN WE'LL AND AND ALTERNATIVES
TO THAT. BUT.
MY QUESTION IS THAT WHEN ARM BUT
PEOPLE DO COME UP AND THEY HAVE
RELIGION IT REASONS FOR SAYING
ALL WHY IS THE STATE OF
CALIFORNIA INVOLVED IN. SUCH AND
SUCH OR SUCH THOSE WHATEVER.
.
IT WAS A POLICY COMMITTEE ARE
ARE POLICY COMMITTEES ON THE
BOTH HOUSES AND WE HVE TO. DEAL
IT RIGHT WE HAVE AND SO FORTH.
.
IS
I WOULD ASK EACH OF YOU ARM IS.
IS YOUR ARE YOUR RESPECTIVE
ORGANIZATIONS ABLE TO WE SAID
OKAY WE WOULD LIKE TO HAVE AN
AND OUR ANALYSIS THE BILL TO
RECOGNIZE THE POTENTIAL COST TO
BE ABLE TO. HELP YOU DO AN
ANALYSIS OR HELP PROVIDE HOUSE
BECAUSE YOU HAVE THE NUMBERS AND
YOU ACTUALLY HAVE THE CAPACITY
OR WORK WITH THAT SOME PEOPLE
MAY ARGUE THAT WELL.
YOU MIGHT BE BIASED READY SO
WILL HAVE AN OUTSIDE ANOTHER AND
TO TO YOU WILL DO IT BUT THEN
PROVIDE THE KIND OF DATA SO THAT
WE CAN ACTUALLY HAVE IT THAT
KIND OF ANALYSIS.
WHAT BEFORE BILL COMES UP SO WE
CAN HAVE THAT AS PART THE
DISCUSSION I FEEL LIKE THAT
THAT'S?
UNFORTUNATELY NOT AS PROMINENT
OF A PART OF THE DISCUSSION WE
HAVE OUR HEARINGS ABOUT THESE
DIVESTMENT DOES IT COULD BE.
SETTLE AYE SO I'D LIKE TO KNOW
WHAT EACH OF YOUR SYSEMS COULD
COMMIT YOU TO HELPING US PER
DAY.
CONDUCT THAT TYPE OF ANALYSIS I
THINK I THINK THE CURRENT SPEED
BUMP OF FOR THE FISCAL ANALYSIS
IS ISN'T HIGH ENOUGH.
GIVEN THE GRAVITY THESE BILLS A
YOU KNOW MY OWN EXPERIENCE AS A
SOMEONE COOLEY KNOWS FROM THE
INSURANCE INDUSTRY I WHEN I WAS
INSURANCE COMMISSIONER COLORADO.
I AM IN INSURANCE WORLD YOU
OFTEN HAVE MANDATED BENEFIT
BILLS COME TO CAPITALS AND
THEY'RE ALWAYS EMOTIONAL LIKE
THESE ISSUES ARE THE ADVOCATES
FEEL STRONGLY ABOUT THESE ISSUES
SO. IT'S HARD TO GET A GOOD
CONVERSATION AROUND THE FACTS
AND FIGURES AROUND THIS IN THE
INSURANCE INDUSTRY OVER TWENTY
SIX STATES AND EIGHT OZ STATE
LEGISLATURES HAVE MANDATED
BENEFIT REVIEW LAWS.
ACQUIRING EXTRAORDINARY
PROCESSES AROUND LOOKING
INSURANCE MANDATES JUST TO MAKE
SURE IT'S DONE IN A TECHNICAL
WAY AN OBJECTIVE WAY ON THAT
THERE'S.
A PAYMENT OF REAL OF A REAL
PARTY DOING IT SO THAT IS A
THOROUGH ANALYSIS. WHEN I WAS
INSURANCE COMMISSIONER BEYOND.
BILLS THAT ARE AGAINST SO
DIFFICULT AROUND AUTISM IN THOSE
THINGS IT REALLY BRING MOTIONS
THE TABLE AND I THINK THAT
INDEPENDENT OFFICE HELPS A LOT
SO I THINK EXTENT.
A PROCESS COULD BE SHAPE HERE
THAT RESEMBLES THAT I THINK
THEY'LL BE VERY EFFECTIVE THOUGH
AND KNOW THAT THE FORGIVENESS
DIVERSOS R. COMMITMENT FROM CAL
STIRS THAN TO HELP US DO THAT I
WOULD GLADLY DO LIVE A LOT OF
EXPERIENCE WITH THAT ISSUE.
FIRST YES.
YES OR NO ANSWERS YES WE'RE
HAPPY TO ENGAGE.
AB AND I THINK HOPE WILL
HOPEFULLY WHAT YOU'VE SEEN TODAY
AND WILL CONTINUE ON THE FOURTH
PANEL IS MORE OF AN ALIGNMENT OF
INTERESTS BETWEEN. THE MEMBER
GROUPS AND THE EMPLOYER GROUPS
AND THE PENSION FUNDS AROUND
THIS TOPIC SO TRANSPARENCY
ENGAGEMENT. ABSOLUTELY OKAY NOW
APPRECIATE BECAUSE I KNOW THAT
YOU KNOW IN ORDER TO GET THAT
KIND ANALYSIS WE KIND OF NEED
DATA THAT YOU'RE READY HOLD SO
THAT'S BRING PORN.
AYE SIR LEYVA.
THINK CENTER PAN OF REALLY
APPRECIABLE APPRECIATE ALL OF
YOU BEING HERE AND WHAT YOU DO
FOR US EVERY DAY.
I JUST WANTED TO A COUPLE
COMMENTS AND THEN A BALLOT
QUESTION. I SIT ON A PRIVATE
TRUST FUND FOR TWELVE YEARS AND
THE CONCERNS EXACTLY THE SAME
ONE MY BENEFIT BE PAID AND THEN
THE OTHER SIDE IS CAN I AFFORD
TO MAKE THOSE PAYMENTS.
I DO THINK THAT MANY TIMES AYE
VESTMENTS ARE LARGELY SYMBOLIC
AND COMING OUT OF THE LABOR
MOVEMENT I LIKE A GOOD FIGHT AS
MUCH AS ANYBODY ELSE WANNA MAKE
SURE THAT FIGHT ACTUALLY
TRANSLATES INTO SOMETHING THAT
HELPS FOLKS.
THE FUND IS CURRENTLY AT SIXTY
EIGHT PERCENT IS UP WITH THE
FUNDING CRITICAL STATUS.
SO IT IT'S REALLY A POINT IN
TIME.
A CERTAIN
SO IT'S THE THAT THE NUMBER OF
ASSETS WE HAVE COMPARE.
AND WE NEED TO.
ANNUAL BASIS
SO WE THERE IS A PATH TO MOVE
TOWARD FULL FUNDING IT'S SAID
TWENTY TO TWENTY FIVE YEAR PATH
AND IN THAT TWENTY TO TWENTY
FIVE YEARS THE RISKS THAT WE
HAVE IS SURVIVING THE MARKET
VOLATILITY. THE ONE AREA THAT WE
ARE VERY MINDFUL OF.
OR THE NUMBER THAT WERE VERY
MINDFUL OF IS NOT HAVING THAT
FUNDED STATUS DROPPED TO AROUND
THE FIFTY PERCENT MARK THAT
MAKES IT VERY DIFFICULT FOR A
SYSTEM OF OUR SIZE SCALE TO
RECOVER FROM.
SO THAT'S A RISK FACTOR BUT AT
SOME POINT IN TIME WITH THE PLAN
MOVING FORWARD THAT PLAN JUST
HAPPENS TO BE.
AND YOU FIT IT I DO UNDERSTAND
THE WHOLE LONG TERM WHEN YOU SEE
THOSE SHORT TERM RETURNS AND
THEY'RE VERY SCARY AND YOU HAVE
TO REMEMBER LONG TERM. BUT DO
YOU FEEL THAT YOU ARE ON A PATH
TO GET THE PLAN TO SEVENTY TO
SEVENTY FIVE TO EIGHTY PERCENT
FULLY FUNDED.
WE DO BELIEVE FOR ON A PATH IN
THERE THERE'D BEEN SOME
DECISIONS MADE BY THIS BODY IN
THE GOVERNOR THAT THE SIX
BILLION DOLLAR PAYMENT TO HELP
PAY DOWN THE UNFUNDED LIABILITY
HAS BEEN VERY HELPFUL BUT. IT'S
CONVERTED US FROM A NEGATIVE
CASH FLOW POSITION TO A POSITIVE
CASH FLOW POSITION FOR THIS
ENTIRE YEAR IT'S VERY HELPFUL
WERE NOT SELLING ASSETS
THE PAY BENEFITS.
I AM BUT AGAIN THAT PEPPER.
IT PEPPERMINT USE THERE ARE
PEOPLE WHO ARE FOND OF PEPPER
OTHER PEOPLE WHO ARE VERY
CRITICAL OF HAVE BROUGHT. HAVE
BRAT THAT TWENTY TO TWENTY FIVE
YEAR MARK WHEN PEPPER MEMBERS
BEGIN TO RETIRE YOU ACTUALLY SEE
THE LIABILITIES COME DOWN PRETTY
SIGNIFICANTLY SO. YES I DO
BELIEVE WE'RE ON THE RIGHT PATH
THERE ARE MORE A DECISION. TO BE
MADE AND WE'RE WORKING WITH
OLIVER STAKEHOLDERS ON WHAT
THOSE MIGHT BE BUT IN DECEMBER
THE BOARD ADOPTED THE NEXT FOR
YOUR ASSET ALLOCATION AND AND
THE DISCOUNT RATE WAS THREE.
CONFIRM TO DROP DOWN TO SEVEN
EXCELLENT THANK YOU.
THE MORE COOLEY.
WELL I'M JUST TO CLOSE OUT THE
LEGAL CONVERSATION. WHEN THE
VOTERS ADOPTED THE ARRESTS A
STANDARD PRUDENT EXPERT AND AND
EIGHTY FOUR.
HAD THE VOTERS LOOKED AT THEIR
VOTER GUIDE AND ACTUALLY READ
THE LANGUAGE OF THE NEW SECTION
SEVENTEEN.
THE FINAL PROVISION NAY RED IS
DIRECTLY RELEVANT TO THIS
CONVERSATION IN THE RELEVANT
YARDSTICK.
THE.
RETIREMENT BOARD OF THE PUBLIC
PENSION OR TERMS SYSTEM.
SHALL DIVERSIFIED INVESTMENT OF
THE SYSTEM.
TO MINIMIZE THE RISK OF LOS
AND MAXIMIZE RATE RETURN.
UNLESS.
UNDER THE CIRCUMSTANCES CLEARLY
PROVED NOT TO DO SO.
SO I THINK THIS CONVERSATION
ALWAYS COMES BACK THAT PRUDENT
STANDARD.
BUT IT DOES SET UP THE ARTISTIC
IS.
YOU KNOW OUR THINGS HAPPENING R.
WE GET INTO A TIPPING POINT WITH
RESPECT TO A CERTAIN TYPE OF
INVESTMENT.
THERE IS LOOKING LIKE IT
ACTUALLY MAY BE PRUDENT TO
DIVEST.
AND AT THAT POINT IF YOU THINK
THAT'S THE WAY THINGS ARE
CUTTING THAT'S ACTUALLY VERY
IMPORTANT CONVERSATION IS
BETTER.
TO DIVEST EARLY BEFORE THE WHOLE
THING.
GOES INTO THE CAN.
LOVE BUT I THINK EVEN THE VOTERS
HAD THIS.
THING IN FRONT OF THEM THIS IDEA
WE GONNA YOU'RE GONNA DIVERSIFY
SOMETIMES IS CLEARLY PRUDENT TO.
STEPANEK FOR DIRECTION.
WELL I A Y. THANK YOU ALL FOR
YOUR PRESENTATIONS WE LOOK FOR
TO CONTINUE CONVERSATIONS IS THE
SERVICE THEY JUST THE. AND OTHER
STAFFERS WERE MOVING FORWARD.
AS WE LOOK AT THIS ISSUE I I
THINK THAT.
YOU KNOW.
.
WE ACKNOWLEDGE THE U. PRODUCER
RESPONSIBILITIES
AND I THINK THAT.
WHAT PART OF WHAT WE WANT TRY
TO GET TOWARD IS REALLY BUILDING
THAT CONSENSUS IS HEARINGS PART
OF THAT BUILDING THAT CONSENSUS
ABOUT HOW WE MOVE?
FORD BECAUSE IT'S GETTING THERE
ARE MULTIPLE STAKEHOLDERS YOUR
PUBLIC PENSION FUNDS WERE
LEGISLATURE WE HAVE VOTERS WE
HAVE STAKEHOLDERS. PEOPLE FIFTH
STRONG FEELINGS ABOUT CERTAIN
THINGS AND.
I OFTEN HOW THIS THAT
CONVERSATION WHEN IT STARTS AND
INTERSECTING WITH WHAT YOU NEED
TO DO TO BE SURE WE PROTECT THE
EVERITT.
RETIREMENT. OF THE OF OUR
EMPLOYEES AND AND RETIREES NOW
HOW DO WE HAVE THAT CONVERSATION
A WAY THAT RECOGNIZES.
WITH WATER PRIORITIES ARE AND
DO IT IN A WAY THAT WE'RE NOT
PLAYING BRIDGE WHEN I HAVE A
BRINKMANSHIP CONTEST IT'S REALLY
ABOUT HOW DO WE MOVE FORWARD AND
DO IT TRANSPARENTLY NOW WE
REALLY CONSIDERING ALL THE
DIFFERENT ISSUES.
THAT ARE INVOLVED IN TRYING IT
AND WE TALK ABOUT TRANSPARENCY
AS PART OF ITS BE SURE THAT ALL
THE SECTIONS LIKE LIKE WHAT IS
THE. TRUE COST OF DOING THIS
WHAT IS THE ALTERNATIVES RIGHT
ENGAGEMENT SO FORTH WHAT'S THE
MOST EFFECTIVE RIGHT BECAUSE IT
DOESN'T MEAN THAT. WHEN SOMEONE
SAYS THERE'S A PROBLEM THAT WE
NEED TO ADDRESS AND WITH PLEASE
DIVEST FROM THIS DOESN'T MEAN
THAT WE DON'T CARE ABOUT THAT
PROBLEM AND WE DON'T DO
SOMETHING ABOUT IT I THINK
THAT'S THAT THAT'S WHAT PEOPLE
NEED TO UNDERSTAND RIGHT. AND SO
WHAT CAN WE DO TO MOVE FORWARD
TO WORK EFFECTIVELY. AND THAT
ALSO TO RECOGNIZE THAT IF
SOMEONE IS DEAD SET ON THE
VESTMENT KNOW WHAT IS THE COST
AND HOW WE'RE GONNA MAKE UP FOR
THAT.
RIGHT I MEAN THAT'S THAT'S IT'S
AT AND AND THAT COST IS OFTEN
NOT BORNE BY THE TARGET OF THE
DIVESTMENT THAT'S THAT'S YOU TRY
TO GO AFTER YEAR YOU'RE
HURTING OTHER PEOPLE AND.
.
AND SO IF THAT HAVE THAT
CONVERSATION AND I REALLY
APPRECIATE YOU BEING HERE THAT.
THANK YOU.
.
THEN SIR I APPRECIATE THAT THOSE
MENTIONED AYE S. YOU IN THIS
ABOUT.
WE WE ARE GONNA TALK ABOUT HER
OWN REVIEW.
THAT WE DON'T HEALTH INSURANCE
SO I WANT THAT WELCOME KAREN
CORBETT HIS THAT DIRECTOR OF
CALIFORNIA HEALTH BENEFITS
REVIEW PROGRAM.
TO.
.
NOT GOING TO A LOT THINK ABOUT
HOW WE DO THE REVIEW BUT MAYBE
YOU CAN COMMENTS MORE
SPECIFICALLY ON THIS WERE
OFFICIALLY RUNNING OUT TIME BUT.
I WANT TO TALK ABOUT LIKE WHAT
IMPACT DO YOU THINK THIS REVIEW
PROCESS HAS HAD ON.
BUT NOT A POLICY MAKING
BY PRECIADO JACK'S COMMENTS
ABOUT BENEFIT REVIEW PROGRAMS I
WISHED I HAD HAD THAT ON YOU
TUBE LIKE A PLAY THAT BUT I.
.
SO AS AGAIN I THINK I'LL PROVIDE
A VERY QUICK.
FOR REVIEW OF CHIPPER WITH AN
EMPHASIS ON LESSONS LEARNED.
PERHAPS SOME OF THE IMPACTS AS
WELL SO REPLICABLE ELEMENTS OF
CHU BURPS APPROACH THAT MIGHT BE
APPLIED FOR OTHER AREAS IN NEED
OF OBJECTIVE EVIDENCE BASED
ANALYSIS.
IN A PROVIDING VERY HIGH LEVEL
OVERVIEW.
BACKGROUND OF CHIPPER AND I
PROMISE VERY HIGH LEVEL FOR
THOSE OF YOU WHO HAVE READ
CHIPPER REPORTS AND TEY CAN BE
WAITING SO I'M NOT GONNA
REPLICATE THAT. I'M THEN I'M
GONNA ZERO IN ON SOME KEY
ELEMENTS THAT I BELIEVE HAVE
HELPED US OVER THE YEARS. UP
AND.
THAT YOU KNOW THAT'S ONE SORT OF
FOR BUCKETS ON TRANSPARENCY AND
THE IMPORTANCE OF RELATIONSHIPS
WITH THE LEGISLATURE. YOU
DESCRIBE LITTLE BIT ABOUT SOME
OF THE INTERACTIONS WITH THE
LEGISLATURE. AND THE REQUEST
PROCESS.
I THINK IT'S REALLY IMPORTANT
AND LOOKING AT THE HISTORY OF TO
BURP WHICH HAS NOW ALMOST
FIFTEEN YEARS.
THAT JR PURPOSE ACCOUNTABLE TO
THE LEGISLATURE BUT A POLICE.
I THINK THAT'S A REALLY AND
EXTINCTION.
I'M GONNA SPIEGEL ABOUT ABOUT
THE VALUE OF HAVING MULTI
DISCIPLINARY CONTRIBUTORS ALL OF
SPECIALIZED ON THEIR DIFFICULT.
TO ASSASSIN AN OBJECTIVE R.
IMPARTIAL WAY IT REQUIRES THE
BEST REVIEW OF EVIDENCE
POSSIBLE.
I'M SURE BURKE HAS AN ADVISORY
BOARD THAT HAS HELPED TO DEVELOP
METHODS.
AND REVIEW REPORT SENATE'S ALSO
I'VE BEEN IN ADDITIONAL SORT OF
FIRE WALL OF OF ON DEMONSTRATING
INTEGRITY OF TRUE PURPOSE
PROCESS.
IN THE SPEAK ABOUT THE
IMPORTANCE OF DEVELOPING A
ROBUST AND.
RIGOROUS METHODOLOGY.
TO DO THE WORK SO THAT IT IS
SEEN AS CREDIBLE AND A HANDFUL
OF LESSONS LEARNED.
THE BY WAY A VERY QUICK
BACKGROUND.
AGAIN CHIPPER WAS ESTABLISHED
ABOUT FIFTEEN YEARS AGO OF BY
STATUTE IN TWO THOUSAND AND TWO.
IT'S BEEN REAUTHORIZED SEVERAL
TIMES SINCE THEN I THINK IT'S
BEEN SEEN AS A WELL RESPECTED.
SOURCE OF INFORMATION FOR THE
LEGISLATURE.
BOTH BY REGULAR PROPONENTS AND
ARE ADVOCATES OF CERTAIN.
BENEFIT MANDATE BILLS AS WELL
AS OPPONENTS.
OF HEALTH INSURANCE BENEFIT
BILLS.
THE POLICY COMMITTEES
APPROPRIATIONS COMMITTEES AND
LEADERSHIP.
OF BOTH HOUSES ARE THAT ARE
THOSE EMPOWERED BY STATUTE TO
REQUEST YOUR BURP ANALYSES THE
NOT INDIVIDUAL BILL AUTHORS WHO
ARE THINKING ABOUT A SUBJECT
THAT'S BAD ALSO IS A IMPORTANT
DISTINCTION.
OB SUBURBANS CURRENTLY
AUTHORIZED UNTIL JANUARY FIRST
TWENTY TWENTY.
WERE HOUSED WITHIN THE
UNIVERSITY OF CALIFORNIA THROUGH
WERE ABLE TO ACCESS FACULTY AND
RESEARCHERS FROM ACROSS CAMPUSES
BUT WERE INSTITUTIONAL
INDEPENDENT.
THE TROOPER SPEAKS ONLY FOR
ITSELF.
THROUGH THE USE OF PRE
CONTRACTED FACULTY IN ACTUARIES
WE WE SECURE ON PIECES OF TIME.
FROM FOLKS.
MORE THAN A YEAR IN ADVANCE.
WERE ABLE BY AS WELL AS A VERY
TERRIBLE CONFLICT OF INTERESTS
SCREENING PROCESS.
ROOM WERE LOOKING AT WHERE
FACULTY AND RESEARCHERS HAVE
GOTTEN THEIR FUNDING SOURCES TO
MAKE SURE THERE'S NO POTENTIAL
OR PERCEIVED CONFLICTS OF A
CONFLICT OF INTEREST. WE USE THE
NIH R. STANDARDS IN OUR OWN
REVIEW. ON YOUR PURPOSE ABLE TO
PRODUCE WITHIN SIXTY DAYS LAST
YEAR WAS AN AVERAGE OF FIFTY.
RIGOROUS DATA DRIVEN ANALYSES OF
INTRODUCED FOUND BILLS.
WE DO NOT KNOW IN ADVANCE WHAT
TOPICS WE WILL SEE SO WORD JUST
AS EAGER.
CHECKING.
YOU KNOW A LEGEND FOLLOW UP
UNTIL MIDNIGHT.
AND SOMETIMES LATER.
ON FEBRUARY SIXTEENTH SO IT'S
ALL IT THIS IS THE BEGINNING OF
A VERY EXCITING TIME OF YEAR OUT
FOR US ALL.
AND WE ALSO DON'T KNOW HOW MANY
ANALYSIS REQUEST WE WILL SEE.
AND RECEIVE.
AND THE REQUEST
OF COURSE GIVEN THE CYCLE.
TYPICALLY FALL CONCURRENTLY SO
IT'S A BIG PUSH ON BETWEEN NOW
AND MAY. THE COST FOR JR PURPOSE
ROUGHLY TWO MILLION DOLLARS A
YEAR TO PRODUCE APPROXIMATELY A
DOZEN.
ANALYSES ARE IMPORTANT
DISTINCTION ABOUT CHIPPER THESE
ARE NOT GENERAL FUND DOLLARS
THAT SUPPORT OUR WORK RATHER THE
LEGISLATURE FUNDS EUROPE'S WORK
THROUGH AN ANNUAL ASSESSMENT. ON
HEALTH PLANS AND INSURERS IN
CALIFORNIA.
I'M KEY TO OUR APPROACH INTO OUR
WORK IS THE DEVELOPMENT AND
ONGOING MAINTENANCE OF AN
ACTUARIAL MODEL OF HEALTH
INSURANCE IN CALIFORNIA.
A MODEL THAT MUST BE ANNUALLY
UPDATED TO ACCOMMODATE CHANGES
THAT ARE LARGE LIKE WHEN THE
AFFORDABLE CARE ACT COMMENDABLE
PLAY IN REALLY ALTERED OF THE
WEIGHT AND HEALTH INSURANCES.
FUNDED AND AND PROVIDED IN
CALIFORNIA OF COURSE BROUGHT
MANY PEOPLE UNDER THE COVERAGE
TEN. AS WELL SMALLER CHANGES
THAT ARE ONGOING CHANGES IN
UTILIZATION PATTERNS.
ENROLLMENT TRENDS MORE
EMPLOYERS GOING TO SELF INSURED.
DRUGS IN AND SO FORTH.
SO THAT'S THE VERY HIGH LEVEL
OVERVIEW ANOTHER JUMP INTO
TRANSPARENCY CREDIBILITY AND THE
IMPORTANCE OF RELATIONSHIPS IN
OUR WORK. WOULD UNDERSCORE THAT
THE IMPORTANCE OF RELATIONSHIPS
AND CREDIBILITY HAS BEEN
ABSOLUTELY NECESSARY TO WIN AND
MAINTAIN THE TRUST OF THE
LEGISLATURE SPONSORS ARE AND
MANY OTHER STAKEHOLDERS ENGAGED
IN THE TOPICS OF HEALTH
INSURANCE.
IT AS AS BEEN NOTED EARLIER
THESE ARE.
IMPORTANT TOPICS THERE
EMOTIONALLY CHARGED I'M
SOMETIMES THE EVIDENCE ISN'T SO
CLEAR CUT.
TRAVERSED STAFF ANNUALLY MEETS
AYE WITH MORE THAN THIRTY THIRTY
FIVE STAKEHOLDERS.
DURING THE SUMMER MONTHS TO
ALLOW FOR FEEDBACK QUESTIONS
COMMENTS ON NOW AND BE BACK ON
OUR PROCESSES IN OUR REPORTS.
ARE WE CONDUCT AN ANNUAL A
LEGISLATIVE BRIEFING WE HAVE ONE
COMING UP ON FEBRUARY SEVENTH I
THINK IN THIS ROOM. ARM WE ALSO
BRIEF SPONSORS BILL AUTHORS AND
THE COMMITTEES OF OUR FINDINGS.
AND ANSWER ANY AND ALL
QUESTIONS WE ATTEND EVERY
HEARING IF WE ARE NEEDED TO
COMMENT OR ANSWER QUESTIONS.
I'VE BEEN DIRECTOR FOR ABOUT A
SIX AND A HALF YEARS IT HAPPENED
THREE TIMES BUT.
YOU KNOW WHERE THEIR.
AND I THINK THAT'S AN IMPORTANT
PART OF THE PROCESS.
I'M KEY TO THE CREDIBILITY AND I
THINK WIDESPREAD USE OF OUR WORK
BY BOTH SIDES.
OF A GIVEN ISSUE IS ARE KNOWN
WELL KNOWN AND ESTABLISHED
NEUTRALITY I REALLY THINK THAT'S
A VERY VERY KEY PIECE.
YOUR BURKE MAKES NO
RECOMMENDATIONS WE ACT
TRANSPARENTLY AND WE'RE OPEN TO
RECEIVING DATA FROM ALL INVOLVED
PARTIES
WE HAVE A A PROCESS WHEN WE GET
A REQUEST. AND WE ALLOW PUBLIC
INPUT OF.
ANY.
BACKGROUNDS ARTICLES OR LETTERS
THAT PEOPLE WISH TO PROVIDE.
ALL OF OUR METHODS R. DATACENTER
LITERATURE SOURCES ARE WELL
CITED AND AVAILABLE TO ALL ON
OUR WEBSITE.
HAVING A RIGOROUSLY NEUTRAL AN
ACADEMICALLY BASED REVIEW
PROCESS ALLOWS OPPONENTS IN
ADVOCATES DO AGREE THAT THE BILL
IS LIKELY TO DO ACTS AND WHY. AS
YOU ALL HAVE NO DOUBT EXPERIENCE
THAT IS NOT ALWAYS EASY TO
ACCOMPLISH
SUCH BASIC AGREEMENT I BELIEVE
ALLOWS THE LEGISLATURE TO.
TO FOCUS ON WHETHER SUCH
OUTCOMES MAY BE WORTH THE COST.
IMPARTIAL ANALYSIS INDEPENDENCE
AND NONPARTISAN STRUCTURE. ARE
THE KEY INGREDIENTS I THINK FOR
CREATING A DURABLE AND LASTING
PROGRAM ON ANY TOPIC.
BRIEFLY ON ON METHODS TO TO
ACCOMPLISH THE ANALYSIS WORK
THAT TROOPER RECEIVES
YOUR PURPOSE BUILT ON AGAIN THIS
A ROBUST AND COMPLEX ACTUARIAL
MODEL THAT REFLECTS THE
INTRICACIES OF CALIFORNIA'S
HEALTH INSURANCE MARKETS.
THIS MODEL WHICH IS TAKEN YEARS
TO DEVELOP AND REFINE THIS
ESSENTIAL TO PREDICT IN
INCREMENTAL IMPACTS A PIECE OF
LEGISLATION WOULD HAVE.
ALL AND UTILIZATION HEALTH
OUTCOMES PREMIUMS ARM AND OTHER
GOVERNMENTAL PROGRAMS SUCH AS
IMPACTS ON MEDICAL.
AND CALPERS.
ARE NOT ALL THINGS IN MEDICINE
ARE AFFECTED HER SAVE AND SOME
MAY BE INDEED HARMFUL NOT ALL
THINGS HAVE BEEN STUDIED
EXTENSIVELY.
OUR TEAM COMBED THROUGH HUNDREDS
OF ARTICLES AND DATA SOURCES
PROVIDES THE LEGISLATURE WITH
THE MOST CUTTING EDGE ASSESSMENT
OF THE MEDICAL EVIDENCE. AND HOW
STRONG IT MAY BE OR MAY NOT BE
ON IN ORDER TO PROJECT A
PROJECT.
DEBT I'M IMPACTS ON HEALTH
OUTCOMES.
OUR PUBLIC HEALTH TEAM THEN
EXAMINES PREVALENCE DISPARITIES
AND SOCIAL DETERMINANTS OF
HEALTH AND HOW CALIFORNIANS
COULD BE IMPACTED. AND WHETHER
ANY POTENTIAL BENEFITS MAY
MITIGATE SOME OF THE COSTA
PROPOSED LEGISLATION.
I'M JUST A HANDFUL OF LESSONS
LEARNED TORTURE BURP LIKE
PROGRAM WORK CREATED COULD
LEVERAGE MANY THE PROCESS SEIZE
AND LESSONS LEARNED BY CHIPPER.
YOU'RE BURPED AGAIN I MENTION
BRIEFLY THE USE OF AN ADVISORY
BOARD OF OUTSIDE EXPERTS IN OURS
INCLUDES EXPERTS I'M
REPRESENTING ARRAY OF HEALTH
CARE INTEREST ALL OF WHOM RESIDE
OUTSIDE A CALIFORNIA.
THINKING ABOUT THIS TOPIC
POTENTIALLY A SIMILAR TYPE OF
STRUCTURE BUT PERHAPS
REPRESENTING ECONOMIST FINANCE
SOCIAL POLICY.
ANALYST AND ADVOCATES MIGHT BE
FROM WITHIN CALIFORNIA COULD BE
A REALLY STRONG SOUNDING BOARD
FOR DEVELOPING ROBUST.
ACCEPTED AND BALANCE
METHODOLOGIES.
THE TIMELINE FOR DOING THIS WORK
ALONG WITH THE COURSE THE NUMBER
AND COMPLEXITY OF REQUEST WOULD
HAVE A REAL IMPACT ON THE
OPERATING COST.
OF SUCH AN EFFORT.
HAVING TO RESERVE SIGNIFICANT
AMOUNTS OF TIME IN A FAST AND
FURIOUS TIME SCHEDULE MEANS
RESEARCHERS AND FACULTY CENTER
BURP HAVE TO DROP OTHER WORK IN
OTHER OPPORTUNITIES.
THE MORE PREDICTABLE THE TIME
TABLE SAY EVERY OTHER YEAR.
BETWEEN THE FIRST AND SECOND
YEAR PROCESSION BETWEEN AUGUST
AND DECEMBER.
SUCH A MODEL MIGHT ALLOW FOR
MORE FLEXIBLE STAFFING USE IN
THE USE OF EXPERTS WHICH COULD
HELP.
REDUCE
COST.
ROBERT LEVERAGES UC'S EXPERTS TO
QUICKLY IDENTIFY AND WORK WITH
CONTENT EXPERTS ESPECIALLY WHEN
LITERATURE OR DATA IS IN SHORT
SUPPLY. A SIMILAR MODEL I THINK
COULD BE EMPLOYED.
SETTING UP A PROGRAM LIKE THIS
REQUIRES A FAIR AMOUNT OF WORK
AND INVESTMENT ENSURING THAT A
PROGRAM IS RESPONSIVE AND
ACCOUNTABLE IS CRITICAL BUT SO
IS IN MY VIEW AND EXPERIENCE
BEEN INSULATED TO DO THIS
IMPORTANT WORK.
IN CLOSING FOR OVER A DECADE THE
HEALTH IN APPROPRIATIONS
COMMITTEES HAVE MADE GOOD USE OF
CHIPPER AS A RESOURCE TO SUPPORT
THE LEGISLATURE'S DECISION
MAKING.
RAMADAS COST I THINK ANOTHER
ACADEMICALLY BASED PROGRAM
DESIGN WITH SIMILAR PROTECTIONS
FROM THE ROUGH AND TUMBLE
ASPECTS
THE POLITICAL WORLD MIGHT WELL
BE A CREATIVE AND RIGOROUS
SUPPORT. FOR CONDUCTING
ADDITIONAL POLICY ANALYSIS
OBJECTIVES ANOTHER ENOUGH.
THANK YOU THANK YOU VERY MUCH
QUESTIONS ARE COMMITTEE MEMBERS.
ALRIGHT NO THANK YOU SO MUCH
ACTION LOOKING FOR OPENHEALTH
COMMITTEE WILL BE LOOKING AT TO
PURPOSES SO AND YOU AND I. THE
FORMER UC FACULTY MEMBER AND HAS
HAD A CHANCE TO INTERACT WITH
OTHER PEOPLE AS WELL AND I THINK
IT'S THAT APPRECIATE THAT THE
PRESENTATION.
AND YOU BREAKING INTO MUCH.
ALRIGHT WELL WE ARE COMING CLOSE
TO OUR TO THE.
THEY WILL GET KICKED OUT HERE
BUT.
WE DO WANNA NOW TAKE PUBLIC
COMMENTS AND I'M GONNA ASK YOU
CAN TRY TO KEEP IT UNDER A
MINUTE BUT YOU'VE OF COURSE
PEOPLE IS FREE TO SUPPLY OF
WRITTEN COMMENTS AS WELL AS THEY
WISH.
SO I WANT JUST THAT THE
MICROPHONE THERE I JUST
INTRODUCE YOURSELF AND THAT IF
YOU REPRESENTING ANYONE AND.
.
WHAT YOU WHAT YOU THINK IT CAN?
BE A CHAIR. THE CHIRS AND
MEMBER OF THE COMMITTEES.
DON'T GIVE IS WITH THE
CALIFORNIA SPECIAL DISTRICTS
ASSOCIATION.
WE REPRESENT THE FIRE DISTRICT
WATER DISTRICTS UTILITY
DISTRICTS UP AND DOWN THE STATE
AMONGST OTHER DISTRICTS WE HAVE
OVER NINETY THOUSAND EMPLOYEES.
THROUGHOUT THE STATE OF
CALIFORNIA MOST OF WHICH WERE
RECEIVING A DEFINED BENEFIT
PENSION.
A I'M GONNA CUT THROUGH MOST OF
MY.
TALKING POINTS BECAUSE HE WAS
OR HE SAID.
DIVESTMENT IT AT CAUSES LOSS OF
THE FUND LAWSUIT FUND THESE BE
MADE UP BY CONTRIBUTIONS.
FOR LOCAL GOVERNMENTS THOSE
CONTRIBUTIONS COME FROM
TYPICALLY CUTS TO SERVICES THAT
THE FOLKS ARE RECEIVING.
AND SO AS A RESULT CST AID.
AT THE CALIFORNIA SPECIAL
DISTRICTS ASSOCIATION DEVELOPED
POLICY PRINCIPLE ON CALPERS
INVESTMENT.
WE WANT ENCOURAGE.
YOUR COMMITTEES TO DO THE SAME
SO WANT TO READ THIS REAL QUICK
AND AND THEN MOVE ON. A.
DEFENSEMAN IS AN INVESTMENT
STRATEGY CAN PRESENT CHALLENGING
CONFLICTS WERE CALPERS IMBALANCE
IN CURRENT AFFAIRS AGAINST ITS
FIDUCIARY DUTY TO MAXIMIZE
RETIREMENT INVESTMENTS.
CSTA SUPPORTS CALPERS PRIORITY
TO ITS MEMBERS IS STATED THEY
COULDN'T STAY CONSTITUTION
ARTICLE SIXTEEN SECTION
SEVENTEEN RETIREMENT BOARD'S
DUTIES TO ITS PARTICIPANTS AND
THEIR BENEFICIARIES SHOULD TAKE
PRECEDENCE OVER ANY OTHER DUTY.
THE FDA POSES ANY EFFORT.
THAT WOULD DIVERT CALPERS FROM
ITS DUTY TO ITS MEMBERS
INCLUDING DIVEST OF CALPERS
ASSETS TO ACHIEVE POLITICAL
OBJECTIVES. IF THAT INVESTMENT
WOULD HAVE A NEGATIVE IMPACT ON
THE OVERALL HEALTH OF THE FUND.
CST SUPPORTS IT CALPERS PROXY
ACCESS EFFORTS TO AFFECT CHANGE
FROM WITHIN BUSINESS CALPERS HAS
INVESTED IN TO ENSURE THEY ARE
ALL WELL MANAGED FOR SUSTAINED
LONG TERM SUCCESS.
AND I THINK THAT'S EVIDENT
THROUGH THE EXXON EFFORTS AND
THE DAKOTA PIPELINE THAT THEY
CALPERS UNDERTOOK LAST YEAR. US
WITH THAT THANK YOU VERY MUCH
FOR YOUR TIME APPRECIATE YOU
HAVE HOLDING THIS HEARING. THANK
YOU THANKS VERY MUCH.
WELCOME JIM VOSS BIT FROM
PHILOSOPHY CALIFORNIA I AM A CT
A MEMBER AND I AM ALSO A MEMBER
OF CAO STIRS.
THE FIRST DOMINO HAS FALLEN THE
STATE OF NEW YORK IS TAKEN A
LEADERSHIP ROLE TO PROTECT ITS
STATE EMPLOYEE RETIREES BUT
PLANNING TO DIVEST NEW YORK
STATE COMMON RETIREMENT FUND.
FROM SIGNIFICANT FOSSIL FUEL
INVESTMENTS FOR ECONOMIC
REASONS.
TODAY MOVEMENT NEAR YORK MED
BLOUSE HERO HAS ANNOUNCED THAT
THE CITY OF NEW YORK WILL NOT
ONLY DIVEST.
ITS FUNDS FROM FOSSIL FUELS BUT
IT IS ALSO SUING ME FOR POSSIBLE
COMPANIES.
TO BILLIONS OF DOLLARS TO
RECOUP.
MONEY SPENT FOR RESILIENCY
EFFORTS FROM CLIMATE CHANGE.
AND IT IS NOW TIME FOR
CALIFORNIA STATE LEGISLATURE TO
FOLLOW THE LEAD.
WE ARE AT THE BEGINNING OF THE
END OF THE FOSSIL FUEL.
INDUSTRY ACCORDING TO CARBON
TRUCKER INVESTORS IN THE FOSSIL
FUEL INDUSTRY ARE UNDERWAY OF
THE SPEED AT WHICH CLEAN ENERGY
WILL DOMINATE THE ENERGY MARKET.
REGARDLESS OF OUR CURRENT
ADMINISTRATION'S EFFORTS TO
BOAST OF THE FOSSIL FUEL
INDUSTRY A HUNDRED AND TWENTY
MAJOR CORPORATIONS ARE LEADING
THE WAY COMMITTING TO BECOMING A
HUNDRED PERCENT RENEWABLE
ENERGY.
BY SELF IMPOSED STATES FACEBOOK
GOOGLE APPLE ARE ALREADY THERE.
AND.
OF THE CORPORATIONS INCLUDE
WALMART UNILEVER WELLS FARGO AND
MAWS THEY'RE NOT DOING THIS FOR
PHILANTHROPIC REASONS THEY'RE
DOING IT BECAUSE IT IS COST
EFFECTIVE AND.
.
A IS COST EFFECTIVE AND MAKES
GOOD BUSINESS SENSE.
I AM AT YOU WANT E TO STOP HERE
I AM I'M GETTING BODY LANGUAGE
FROM HEWLETT.
WHILE MODERN TECHNOLOGY IS ALSO
AFFECTING THIS RAPID TRANSITION.
OKAY I AM AWARE VERY WITH.
TESSLER HAS UNVEILED.
A SEMI TRUCK AND.
THAT WHICH IS GOING TO BE.
THE BIGGEST CATALYST IN
TRUCKING IN DECADES AND THIS
COULD BE SEVENTY BITS AND
CHEAPER TO OPERATE. A WALMART
AGAIN BUT NOT PUTS A
PHILANTHROPIC REASONS.
OKAY AND BRITISH THE AIRLINE
INDUSTRY AS WELL EASY JET QUE
AND THE BRITISH AIRLINE INDUSTRY
WITH RIGHTS ELECTRIC SO WHAT I'M
SAYING IS THAT AND TO THE FOSSIL
FUEL INDUSTRIES HERE. WHY IS MY
PENSION FROM CONSTANT STILL
INVESTED THE FOURTH LARGEST
INVESTMENT IS EXXON MOBIL? AND
DAMN IT IS IT WOULD BE FIDUCIARY
PRUDENT MCALISTER'S TO TAKE THAT
INVESTMENTS OUT OF FOSSIL FUELS
THANK YOU.
I WILL.
GOOD MORNING R. KNOW AFTERNOON
I'M THE BILL VOSBURGH FROM SANTA
ROSA VAMOS UT A MEMBER I'M A
FORMER TEACHER THIRTY NINE YEARS
IN THE TEACHING THE KIDS IN
CALIFORNIA.
AND I'M ALSO A RECIPIENT OF ONE
OF THE SPEAKER PEOPLE YOU'VE
BEEN SPEAKING UP HERE ON THE
RETIRE REALLY ONE OF THE ONES OF
THE CELEBRATED PEOPLE ONE OF THE
THOUSANDS.
AND I'M REALLY GRATEFUL FOR MY
PENSION AND I HOPE THAT THE CAL
STIRS CONTINUES TO PROVIDE THE
FIDUCIARY RESPONSIBILITY THAT
THEY HAVE TO ME I WANT TO MAKE
IT TWO HUNDRED. AND HAVE MY
PENSION IN THERE FOR THAT.
AND THE CHALLENGE SOME OF THOSE
WOMEN WHO WERE LIVING LONGER
THAN WE ARE WE UP WE WANTED TO
TAKE UP THAT CHALLENGE BUT I'M
TO A FEARFUL OF RISKS TO MY
PENSION AND THEY COME FROM.
AND SEVERAL THINGS ONE IS FROM
THE.
EFFECTS OF CLIMATE CHANGE AS
WE'VE HEARD SPEAK BEACON OF
HERE.
I'M WORRIED ABOUT THE RISK TO
MY.
PENSION FUND FROM THE CARBON
BUBBLE WHICH WILL BURST SOONER
RATHER THAN LATER
I'M WORRIED ABOUT THE RISK TO MY
FUND FROM THE BUSINESS AS USUAL
A ASPECT OF THE PENSION FUND
WITH FOR FOSSIL FUELS.
THAT WILL LEAD US TO NOT JUST
FIVE TWO PERCENT HAVE SOMEONE
MENTIONED HERE EARLIER THAT
EXXON HOUSE OF VISION.
WITH TWO PERCENT CLIMATE CHANGE
WE'RE GONNA HAVE FOUR OR FIVE
PERCENT CLIMATE CHANGE WHILE I'M
STILL ALIVE.
AND WHAT EFFECT WILL THAT HAVE
ON MY PENSION FUND I THINK WE'LL
BE ARE HUGELY DILATORY YES WE
HEARD A PERSON HERE SPEAK OF THE
RISKS OF DIVESTING.
WHAT I'M REALLY WORRIED ABOUT
HERE IS THE RISK OF MAINTAINING
THIS BUSINESS AS USUAL APPROACH
TWO PAULSON FUELED WITH WHICH
DON'T SERIOUS EFFECTS ON MY? ON
MY PENSION FUND.
THE SPEED OF TRANSITION WILL
HAPPEN HERE FASTER THINK OF WHEN
WE DID NOT HAVE A A A IPHONE.
ARE.
THE I SPEED UP INTO THE NON
CARBON.
ENERGY MARKET OUR SYSTEM IS
GOING TO BE FASTER THAN THAT SO
I THINK THATNEW YORK STATE I
THINK WE ARE GOVERNOR CUOMO IN
THE LATE LAMENTED AT LEAD. FROM
SAN FRANCISCO GOT IT
WE NEED TO GET IN MISTER LEADERS
WORDS WE NEED TO PROTECT THE
WELL LEARN FINANCIAL SECURITY
FIRE RETIREES. BY IDENTIFYING
THE RISKIEST DIRTIEST ASSETS
TO BE REPLACED BY CLEANER HIGH
PERFORMING ASSETS I ENCOURAGE MY
COLLEAGUES MY EMPLOYERS MIGHT
PAYEES AT CAL STIRS TO.
A MAN GET OUT OF FOSSIL FUELS
QUICKLY PROTECT MY PHONE SO I
CAN LIVE TO BE A HUNDRED AND
HAVE. A FEWER RISKS TO MY FUND
AND I ENCOURAGE THE STATE
ASSEMBLY AND LET AND STAND TO
ENCOURAGE THEM TO DO SO. THANK
YOU SIR THANK YOU.
WELCOME.
GOOD AFTERNOON MY NAME IS
CLANFIELD BEN I'M A CALPERS
MEMBER AND A PROFESSOR OF
ENVIRONMENTAL STUDIES AT THE
CSU.
I'M HERE TO URGE THE LEGISLATURE
NOT TO EXCLUDE ANY OPTION
INCLUDING A LEGISLATIVE MANDATE
TO THE VAST.
FROM CONSIDERATION.
.
CARBON POLLUTION IS ACTUALLY
PART OF THE FOSSIL FUEL
INDUSTRIES CORE BUSINESS THAT'S
WHAT THEIR BUSINESS IS ABOUT
AFTER THEY GET OUT OF THE GROUND
AND HAVE US BY IT AND BURN IT.
SO WHILE THEY MAY BE WILLING TO
DO THINGS LIKE REDUCE METHANE
EMISSIONS WHICH REALLY ON COULD
END UP BEING PROFITABLE FOR
THEM.
ARE THEY ARE UNDERSTANDABLY
DRAGGING THEIR FEET WHEN IT
COMES TO. ENGAGING IN OTHER
LINES OF BUSINESS SUCH AS
RENEWABLE ENERGY.
AND.
AS THEY DRAG THEIR FEET THEY ARE
SUBJECTING. OUR RETIREMENT FUNDS
I THINK TO REALLY SERIOUS
FINANCIAL RISK.
THE RISKS ARE LEGAL WE'VE SEEN
LAWSUITS I THINK IT'S JUST
BEGINNING OF THOSE THE RISKS ARE
REGULATORY.
SO AT A VERY MINIMUM I URGE THE
LEGISLATURE TO ESTABLISH A
MONITORING MECHANISM.
TO ASK OUR RETIREMENT FUNDS HOW
SUCCESSFUL ARE YOU.
AT GETTING.
ENGAGEMENT AND AT IT.
USING ENGAGEMENTS TO GET THE
FOSSIL FUEL FUND OUR COMPANIES.
TO REDUCE THEIR CARBON
EMISSIONS.
AND THERE'S ONE BIG FACT I THINK
THAT UNDERLINES THE IMPORTANCE
OF THAT.
PARIS AGREEMENT SET OUT A
TEMPERATURE SEALING IF YOU WILL
OF TWO DEGREES CELSIUS.
ARM RIGHT NOW EVEN IF EVERYONE
KEEPS THEIR COMMITMENTS ALL THE
COUNTRIES THAT THAT SIGNED ON OF
COURSE WE KNOW THE UNITED STATES
HAS SIGNED OFF.
WE WON'T MEET AT THAT
TEMPERATURE TARGET.
ARM IN ORDER TO MEET THAT
TEMPERATURE COMMITMENT
SCIENTISTS ARE NOW TELLING US.
THAT WE NEED TO BEND THE GLOBAL
EMISSIONS CURVE SHARPLY DOWNWARD
BEGINNING IN TWENTY TWENTY.
LAST YEAR. OUR EMISSIONS WENT UP
BY TWO PERCENT.
THANK YOU THANK YOU THANK YOU.
WELCOME.
CAN.
THANK YOU A MUCH I'M JANET*
I'M ALSO CALPERS
RETIREE. UP THAT IT THAT THE
CENTER PAN YOUR COMMITTEE LAST
YEAR.
PASSED S. B. FIVE SIXTY WITCHES
BEN ALLEN'S BILL THAT DEFINES
FINANCIAL BUT WERE NOW CAUGHT
CLIMATE. RELATED FINANCIAL RISK.
AND I'M HOPING THAT THAT BILL IS
GOING TO COME BACK WE'VE BEEN
NEGOTIATING WITH CALPERS AND CAL
STIR SINCE THEN. BUT AS YOU
PROBABLY KNOW THE OF.
APPROPRIATIONS COMMITTEE IS
HOLDING ALL TWO YEAR BILLS.
BUT.
SINCE THAT TIME THE CONVERSATION
HAS CHANGED AND I THINK IT'S
CHANGED.
BECAUSE.
BOTH OF THE PHYSICAL RISK HAS
BECOME SO MUCH MORE OBVIOUS
WITHOUT HER CANES.
AND THE FIRES AND THIS WEEK THE
FLOODS.
AND ALSO LITIGATION RISK HAS
BECOME.
I THINK PROBABLY ON A PAR WITH
STRANDED ASSET RISK.
FOR MANY OF THE INVESTMENTS THAT
CALPERS AND CULTURES HOLD SO I
JUST.
WHY KEIRA HOLD THE THOUGHT AND
HOLD THE THOUGHT OF THIS BILL
WHEN IT COMES BACK BECAUSE? I
THINK THAT.
BUT THE POINT OF.
CODE OF FLYING.
THAT RISK
AND REQUIRING PENSION FUNDS
TO CONSIDER IT AND REPORT ON IT.
IS IT'S GOING TO HELP MOVE US.
TO A PLACE WHERE MISTER COOLIES
COMMENT THAT.
IT'S A IT MIGHT BE A GOOD THING
TO GET OUT AHEAD OF THE RISK
AND.
SELL THOSE.
SHARES BEFORE.
THE SECTOR CRASHES.
MAKE IT ALL WORK BETTER FOR BY
THANK YOU
THANK YOU THANK YOU.
STOP UNDOCUMENTED BUG PUBLIC
HERMAN SENATOR LET TED TOPIC FOR
THE CALIFORNIA STATE RETIREES WE
REPRESENT.
THIRTY EIGHT THOUSAND STATE
RETIREES ALL OUR MEMBERS OF THE
CALPERS SYSTEM.
I WILL BE BRIEF AND. HOPEFULLY
NOT TOO REPETITIVE I'M GONNA TRY
TO WRAP IT UP BY EIGHT TEN.
OF.
FORGIVE.
.
THE STATE RETIREES ARE HUGE
ADVOCATES OF THE CONSTRUCTIVE
GAUGE WENT POLICY CALPERS IN
ANOTHER.
A PENSION SYSTEMS.
THIS IS THE WAY TO ADDRESS BAD
ACTORS AND A RESPONSIBLE
CORPORATE BEHAVIOR.
TO KEEP RECEIVED AT THE TABLE
USER PROXY VOTES AND TO. URGE
THEM TO IMPROVE THEIR UP
BEHAVIOR OR TO.
.
CHANGE IT ALL TOGETHER.
DIVESTMENT SHOULD BE A LAST
RESORT SHOULD BE RARE AND VERY.
THIS IS THE NUCLEAR OPTION.
OUR IT DOES NOT SOLVE EVERY
PROBLEM.
THAT FACES THE THIS COUNTRY ARE
THE STATE AND CERTAINLY NOT THE
SYSTEM.
ARM AND THEM MOST IMPORTANT
THING OUR MIND YOU THAT HAS BEEN
MENTIONED HERE A NUMBER OF
TIMES.
CALPERS ANOTHER PENSION SYSTEMS
EXIST SOLELY FOR THE BENEFIT OF
THE MEMBERS OF THE SYSTEM.
A CALPERS OBLIGATION IS TO ITS
MEMBERS
IT IS A CONSTITUTIONAL
OBLIGATION.
AND NOTHING SUPERSEDES THAT NOR
SHOULD IT.
ARMED WITH THAT I WILL A ON
BEHALF THE STATE RETIREES URGE
YOU TO TAKE CALPERS AND OTHER
PENSION.
SYSTEMS OUT OF THE BUSINESS OF
CONDUCTING ECONOMIC POLICY
FOREIGN POLICY ENVIRONMENTAL
POLICY
HUMAN RIGHTS POLICY OR SOCIAL
JUSTICE POLICY. OF THOSE.
THOSE OBLIGATIONS LIE ELSEWHERE
WITH WITH THIS BODY IN THIS
ADMINISTRATION AND OBVIOUSLY
WITH WASHINGTON DC.
THANK YOU.
OKAY THANKS SO MUCH TO ALL OF
THE PODS COMMONERS AYE IT ANY
FINAL COMMENTS FROM COMMITTEE
MEMBERS
JUST MAKE.
ALRIGHT. OKAY WELL WITH THAT
IT'S WHAT THANK EVERYONE WHO
PRESENTED I WANT THANK ALL THE
PEOPLE GAY PUBLIC COMMENTS WHERE
TRY TO STRIKE THAT. CORRECT
BALANCE TO BE SURE WE DO FULFILL
OUR FIDUCIARY CONSTITUTIONAL
OBLIGATIONS AS WELL. AND THANK
YOU SO MUCH FOR PARTICIPATING
TODAY THIS CONCLUDES THE HEARING
OFFICIAL HEARING OF THE JOINT
HEARING THE SENATE COMMITTEE ON
PUBLIC PLAN RETIREMENT AND
ASSEMBLY COMMITTEE ON PUBLIC
EMPLOYEES RETIREMENT SOCIAL
SECURITY.
WE ARE NOW