Public Retirement & Social Security Programs-Joint

Call this meeting to order warning everyone who had had you here. First item up well first i'll let my coach hear if you have any comments good morning everybody thank you for making it out in the rain today first item up item b is consideration of emotion to authorize the chairs to approve special expenses incurred by the joint committee. This is just a housekeeping item we do this our budget has been untouched but we do this after the general session is over so that if we have any meetings offsite or we have expenses that come up we have the right to utilize some of that budget to do those things so. Any questions. K I will entertain emotion. All right motion second any discussion. All those in favor say I oppose same sign. Motion carries thank you. Next I would like to ask for a motion to approve the minutes from june fifteenth of two thousand and twenty two. Got a motion from tony right second others in favor say I i'll oppose. Motion carries. At this time i'd like to ask a david clark and jerry size or if they would please come forward to the table. The. Lot people would have a board position that is open. We have a candidate we have to propose as a committee to the governor someone to fill that position. This is a gentleman that I know uh with senator payton. And I had him. Ah meet worth mister clark. And so this time i'm going to let david percent you have a. Bio on mrperiod zeiser at your seats so hopefully you've been able to look at that but if not will let david which clark percent. That good morning committee thank you about mischairman my neighbors david clark the executive director of lobby. And as chairman warren had mentioned is that I have visited without mister sizer on a couple of occasions and I want to tell you that really have been impressed with the questions the dialogue that we've had as far as you know what's really required to serve as a trustee of the retirement system with the current time commitment was to the makeup of the board was to make above the staff so used to just really good questions as far as trying to fact fine before i'll willing to just barming step up and make the commitment to you know possibly servers are trustee if you put his name forward to the governor but just again thank you a chairman warm for slightly somebody do fill it incredibly important role we have seven trustees this particular position is the public trustee and as the public role their person is not a member of the system or not affiliated with any employer groups so it's really an independent person and then with mrperiod xyzer's financial background he can bring it to mention of understanding and skill that is vital obviously to retirement system supports for the funding and the investment programs so again your chairman warrant thank you. Okay jerry if you would please introduce yourself to the committee and then if you would just give a a very brief introduction of yourself. Okay if you're going to that. Well good morning I am jared sizer and II live in hot springs wonderful wife and two ground adult children and. What have I am over an investment advisory firm there and hot springs we sort of people throughout arkansas and other states around the country. And uh love what we do we get to help folks complex with what they value most and life and and take that take that responsibility very very sincerely and work hard at it and we love what we do represent warren asked me if I would be interested in serving in this role and. After much thought and prayer and consideration II have been given a lot everything I have and i've been given and I certainly look for up to use to be able to get back in a. Welcome the opportunity to be able to serve it and hopefully we have help in this this role should you consider that. All right thank you we have a couple of questions so payton. Are you. No we don't have questions I was looking at the wrong side. Do we have any questions from committee members. Currently you guys did a good shot so at this time. I would be open to emotion to. Recommend jared sizer. To be put forth to the governor. Okay. Center hickey iraqi must my apologies and II don't offend you anyway but II see here you have a lot of experience which i'm pleased with it it looks like that you progressed up you know to do your own business and everything your past experience that you have there's you've always left on your own free wheel there's never been any anything where you you've had to leave either volunteer involvement on here no sir okay again it's just the we can say we consider is an important position and just want to make sure that thank you sir appreciate your willingness to do that thanks for your question thanks soon thank you. I actually you have a question center love. If you're hit you. Thank you miss chairman in actually I don't have a question of missus site I have a question of I guess you. In regards to to putting miser size of board. Did we are the staff or anybody review any if there was any potential conflicts in the past mr size of my hail. My understanding is that our recommendation would be given to the governor and then the governor staff would see if there were any conflicts or in the issues. Okay so we position was just too recommend someone okay so our staff or note no one else does that before we give it to the governor. I was not advised that that was the process okay all right thank you. Okay. We've got a motion and a second. Any representative I mean senator hammer. For what purpose. Okay. Yeah. You're recognized. Works i'm sorry thank you the comments that she just made this as a recommendation that's coming out of the governor's office correct is that what honestly. This committee is required to make a recommendation of an individual. To the governor's office okay who then determines if I recommendation is acceptable okay and they will check that individual to see if they're acceptable for some reason I got the impression that it was being stated earlier way around this is coming from us up to the governor's office for the governor's office to approve not the other way around so it could ask a question please show how many other people were considered for this position. That would be. Probably on my shoulders and I based it with about three people. II did not put anything out and that's probably my bad. I was just trying to find someone willing to deserve and. I just found the first person that I could add this with senator patent a little bit on their sn. I just found a willing person that had advised her background. The. And you don't take this directed towards you and it's more matter just the process and how it is that you arrived once sitting at the table that has picked my curiosity not that a question you're integrity or resmaught impressive reduced me rates they have just wondering about how how many others were actually considered for this or how to arrive that that he's wants it in front of us okay that's it okay thank you. Set senator chesterfield thank you thank you message at the fact that we we had to do some due diligence before we came over this name we just in pull is name out of. We it sounding like well we just gave him some bad and they are check it out and if they are okay whether we're we had to have done some due diligence but what was that due diligence as well cause we just did not pull this name out of a head there let three million people in the state of arkansas we just came up with a name there had to be something well I can I can tell you that the diligence was was me and I appear what you took a look at his background you looked at whether or not there were any criminal records you looked at out of this stuff or did you just not look at criminal background mr zizer has been in hot springs I don't know how many years and so you knew him II know him very welcome that's what I needed to know something because we just don't send somebody up to the governor now at no male and we all know anything about them I know a lot about mr well let me ask you this because I know rules usually confirms folks. Who were appointed by the governor will we be going through that process as well. Are the we how does this work because it's unusual I know that. We have the authority to recommend. But we also have the authority to approve certain individuals who are appointed by the governor is this one of those entities is this one of those instances where that happens. Away. My understanding center chesterfield the the senate will approve will approve okay thanks thank you. The. Any other questions. Yeah. Ok idea just just for everybody's information here ideal have mister sizer visit with david clark and have him visit with him to ask questions to make sure that he was. A potential board member that would be able to fill a role that would be able to understand investments and do a. Really good job for block before. At. Jerry I will just ask you how many years have you been doing investments. Read it twenty five years okay that's what I thought so it was not like a wait and get someone I was looking for someone with investment experience and some many years of investment experience so that someone on that board would be able to go a k let's talk about that in that particular investment. Or that fund so I wanted to get someone for the board that new what they were talking about and not just someone that had no experience so. Any other questions all right we have moded motion for immediate consideration in a second all those in favor say I in the opposed same sign. Alright. All those in favor of the motion to recommend mr zeiser to the governor for serving on the lot big board say I in the opposed same sign. Alright mr we will recommend you to the governor for consideration for the lot people. Thank you for being here thank you for having me thank you. All right. The. Alright mister correll will you please come forward item e. Summary of the actuarial valuation debt and results as of december thirty first two thousand twenty two for arkansas local phone police percent pension and relief funds good morning my name is jody correro today i'm here in my role for the arguments of fire police pension review board before the laughing system was adopted by the state nineteen eighty three cities had a locally run fire and or police pension find and there were a couple hundred of those. And those were have been allowed to continue on or to consolidate with love and at this point everybody was eligible to retire in two thousand and three in those fines for all practical purposes and so everybody's been retired for twenty years so these plans have been pretty rapidly consolidating some of them have completely wrapped up their business with their folks and our job is to help them along as as at process continues and so that's what this report is state law asked that the summary the presented to this committee so here you are you have the report there that smart autome after the cover page there's kind of a summary page right after that. The. On our letterhead and you can see the top line and numbers there there the number of plans remaining three years ago was sixty five down to sixty down to fifty one down to forty one there's been eight or ten plans consolidate a year for the past several years and you can see how that is progressed and those plans are kind of going away so to speak but we want to give him a good valuation and make sure that they're doing the things they need to do these plans still represent almost seven hundred benefit recipients the there are out there you can see that there is assessment about a hundred million and own funded liabilities in all that what what I want to do is is the report has a lot of information and as opposed to going through all all these pages I want to point you to the last three pages of the report. And there is a page that. Has examined six at the top two pages from the end pointed that page part of what we do every year for all these plans is to look at look at this and this is interduction to the end of visual results for those forty one plans that remain. But just to let you know what what we're doing for those as part of the valuation process is that we are kind of trying to give them an idea of what level of risk they're at these people are a page and professionals there city folks in and a couple few firefighters are a few policemen and so we try to give them good information that they can use in we use four risk indicators that's the box with all the colors in it so that we look at you know what what the plan is earning over the last ten years compared to the assumption what the funded percentages are which they all should be getting close or be add a hundred percent so we we we look at that and then how what they're doing on contributions and then cross over point is a projection that we have to do for a counting purposes but we use that projection then to say these folks are in you know there could run out of money in ten years or twenty years or they're sufficiently with their contributions would not run out of money so we do that for every plan and then the last two pages of the report shows the remaining forty one plans and that the far right. All their page you can see those four risk indicators for every for every location anybody this got a lot of red is probably probably not in good shape another thing the pension review board has to do is is to identify plans that are weak and need to need some help and then we provide some additional information for those folks in the past the fifteen years has been about twenty one plans that have had been considered projected in solvent it's a lovely time I know but but of those twenty of those twenty one have corrected the issues that they had in one way or another and during this year the the last wine that had not done something as doing something so that is has been pretty successful I bank in helping these plans get to a good place so that everybody gets their benefits so that is some folks call at the old fire police plans or the local fire and police plans that is kind of where they are in a no shell but I would say you have a question yes thank you and how my show my ignorance here but you said three years ago there were sixty five now we're down to forty one so those plans that are the. Going away if there are assets. In that plan that were not distributed what happens to those assets okay and kind of two things wrapped in one there that the planes didn't go away so speak they've all consolidated with lobby so they're under lobby administration now and they have to kind of abide by those rules they keep the benefit structure but abide by the rules for funding and all of those things so they are continued to be funded and and all of that. If when a plan does wrap up and has no more beneficiaries the money that is there can be used by the city to find other fire and police painting benefits so fire for fire and police for policemen. That so it its days. With the cities finding for fire police pensions. So those are assets belonged to the city. Is it state law that require the limits the use of those assets going forward. Yes and as as we know it's not many's state laws or not maybe it's perfectly clear as we'd like form to be but it it is it is pretty straightforward that the moneys that were contributed for example by miligence that went into these old plans that that money can only be used for fire or police pensions and so you carry that forward and the next step if all of the local plan. Liabilities are met and completely fulfilled then it can only be used for new fire our police page and so to speak. So so those limitations are put in place by state long yeah yeah okay thank you. Senator hammer hammer europe is recognized they can assure an exhibit too. It see a graph that shows the four paid fire funds. It would seem like. You met him in a girl they got a lot of read that that's when be concerned seems like corrective actions have. Toward the two thousand eighteen to twenty two time frame have put more the green less than the red but the four paid firefones seem like they should have large portion rate can you explain that or just expand on that a little bit. Well that is where there's more unfunded liability and that that graph is a graph of the assets in the butter liability so they still have. Those plans still have an in the reason on a relative basis one of the reasons that that is larger is the a lot of those four paid or not. For example well there's one that had one larger city that has a lot of that unfunded but then the smaller cities there's a lot of there were mostly volunteer maybe one paid person and so they didn't find for having paid people over the year so they're a little farther behind and finding so that would be the reasons why that middle graph has got more red on it close to reasons fair to say though that's a local issue that those minutes pells are local issues that those while units parties have to work out yes right and they expectation come to us as a state and bell amount I know that might be a political answer if you don't want it what you know but because it is a local issue is going to be up to them to take care of their own before they come looking just as a state yes yes are. Okay. All right and one of the question is. If a. Um that was formally with laughing did something where they pulled out. They're still required to continue to pay that monthly fee for the ones that were being covered during laughing why they were protest paid in in the plan until those individuals die or leave the system as that correct. Well number one my understanding is is that once the cities in operate I can't pull out but by yes the cities on the hook to pay lobby and these old plans are city responsibilities they have to pay what is there there is a state participation but because of premium tax but that is there some premium insurance premium takes money that goes to these local funds antible lobby but beyond that it is the municipality's issue responsibility to fund those right so just because I decide hey we're done we quiet they still on the hook for. And indefinite amount of time or there is no window where they will have completed their obligation to pay into laughing that. Yeah the only only example I can think of along that line and i'm sure david will throw something at me if I miss speed is there there's a couple of of small locations that did a couple paid policemen and I decided they couldn't do that or they gave that responsibility to the county or whatever but those guys aren't benefits while they weren't paid policemen in those small towns and those small towns continue to pay two laughing until that is fully funded until that obligations are taken. The. Representative college you recognize for a question thank you mister chair so back on exit at six can you help me understand the difference why is there a gap between the actuarily computed contribution in the actual contribution for the year is that something that they're supposed to be paying in the amount of the first column in there they're actually paying something different or less than why would that be the. The cities. Are there certain things that the cities are required to pay by state law but they're not required to pay the calculated contribution that we calculate we going calculate that and really is just the unfunded liabilities paid off over five years because everybody's retired now so that that's an agreement between our arsen the board and so we make that calculation and show there and say here's what you need to pay or they often well they may only be paying what they are required. Absolutely required by the state to pay and that is often much less than there okay thanks that that helps so do you have any information about whether or not they're all paying what they are required to be paying by the state to the best that that some we check when we get the annual reports and to the best of our ability that they are putting in what everyone's putting in with the required to put in okay thanks yes. Representative you recognize for a question thank you miss chairman for minute here I thought I was looking at my report guard but a home exhibit six on the last page on down the rogers where you have. Two two sections of their both scored a fab. In the projected years is less than six that they're the only f funded status. Out of the remaining districts have the. Have they been. Addressed or they make incorrect of action on that or yes sir we're not entirely sure at this point but we wrote them a letter from our office then a letter from the prb office both. Given a little further explanation as to what that meant and. What they're kind of their tools were and asked them to report back to us what that was david's got a letter just in the last week back from them responding that they understand and they're going to meet their responsibilities and they're going to come to the next PRB meeting which is early december and explain how that is and kind of have a conversation about thank you have they followed have they gone through the steps to see what would be involved in merging with laugh. Not that I know now they have not ok or if it were candidate you'll less than ten years ago that nine eight two three min it was well says i've been looking at it it was almost exactly ten is what it was right at friday and ten so they were just right at that level we went in the same this so we get some action going and can do it I thought i'm trying to go off memory but I think we had at one time maybe proposed legislation that if after a certain number of years if I if a department still are a plan still was a deer and if they were going to be required to merge there's been discussion about that times but it never has risen to the level of legislation at this point then we did put in. The the legislation put in the law. The came up with the designation projected unfounded that gave us the ability to. Can I ask them hey what do you do here's what your tools are you need in need to make some action but it did not give the pension review board the ability to force any line to consolidate okay alright thank mister dem's fine words yes I understand thank you senator chesterfield you recognize for a question thank you sir good morning jerry how are you good morning i'm fine ma'am I understand abc and e avcd and outcome with the ears about. Um. The. It is that well it's all written out but I have to go back and find the because it's not on when we talk about now it's not it's not online further back in the report it is a page that has exhibit three at the tar it's it's the. About seven pages back says exhibit three summary by funding status and in defines the that's where that abcde. Is define and he means the plans of rejected the replace their assets in ten to twenty years. So the that that the risk indicator on that. Okay well the question I do the members know. The risk of their own pitch and are they required by law to tell these people that were being can you when we have to make these type of when we have to make these type of communications. And david's office does this not mean when these type of communications are done it's sent to the pension board the local pension board is sent to the city governing board city council and the there's a letter there that asked that that me distributed to the all the pensioners as well. So that the governing board the the pension board and the participants. Are all informed when there's when there's a problem so that it can all work together to find a solution. We requesting it but are we requiring it. There's a difference. No it's that is is not required to come to the table. David does the details on their so you be better better able to answer i'm sorry. That good morning david clark with the pension review board a senator you're you're correct is that it is a simple request the pure beat is not heavy authority to mandate that notification they will tell you some of the this committee couple years ago now when we were talking about this plans that are underfunded you directed us to make sure that the local legislators are in that area or actually notified in one of the plans that were discussed this morning i'll refrain from saying the name of if I can anyway is it we made notification to their local legislators and and there was some consternation from the location about why we made that notice but I think it's wise it's helped there was a plan on the east side of the state there for years had been notified of the underfunding condition when the senator became involved in help kind of. Nurtured along the plan ended up consolidating and other benefits are absolutely protected for those participants so that step has actually yield results that I guess i'm concerned because I know there in when a. Units are palentine or some form of local government is told about an art they are supposed to discuss at any public meeting. Yes my we don't have that requirement for. This year you're correct I think it might be helpful that those who come back might look at making it a requirement that it'll be discussed publicly grabbled here to be a member of one of these plans and I just happen to find out later. There. Oh by the way the plan is is dead in all the contributions i've made a go. Yes bearing one thing that is it is a memory hit here while you are speaking is that there is a provision in code that requires the chair of these local plans which it for all purposes is the mayor to make an annual report to the city councils on the conditions of these plans so if they're. If that if that report includes the notification that the prb has provided the jodies office with the other actual results then there would be that notice made but I would say that you're. You're thought it I think is something that would be good if we could pursue legislative changes is this subject to alright are these pension funds subject to audit they are okay so if if they are if in looking at this. Members of the order committee decided that they would go in because i've never heard i've been reading all the step from order for very long time i've not seen the pitch and plans. Come before the audit committee. And I think it would be helpful at the pension plans came before the auto committee so the weaker determined what they are doing what the problems have been there preclude us from being silent as for these these systems are concerned you bloody good morning yes ma'am thank you thank you mischief. Center patent I think you had a question yes thank you mister chair. I guess it seems that these forty one plans are very autonomous my question is who makes the investment decisions for these plans. Either one I mean I they have they have their own investment advisors for the most part the very smallest plans are limited and can only invest in in c d's and bank deposits and but the plans that have enough money to to invest have investment managers in you know we have to look at some of their reports and all that. So the lot before basically has zero input in that process yes or for the local minute is forty one plants that's true the lobby board doesn't have any relationship in that regard only when the plans can solidate in just sort of what he understands the forty one number that we're looking at today has dropped a thirty three as of this year because we've had eight plants consolidate and we may have one more but we're not really sure if they're gonna make that decision so that the number continues to wind down and those plans are handed off to lofties administration that the locky board is the responsible party for making the investments so one more course if I may. How solved or insolvent can they be and still consolidate america if if they're totally upside down to we allow under consolidated how do we do that yes they're actually if if they're at that stage we would really hope that they would make the decision to consolidate because what happens at that point there's reset with lobby sets the monthly employer contribution rate that the location must make and so then it becomes a monthly payment that they make and it's settle for a fifteen year american period okay thank you thank you mister chair and in a sense going back to representative of college question once they consolidate would love to be there is a required contribution and they have they have to make the contribution that's why they will remain solved once they consider. Okay senator hammer. And where you recognized that he was sharp so some of these are if i'm interpreting this right some of these are rated as a wire they understand if a is a good status when it worked the on this list. On them i'm on exhibit six forty one plans are on the listing and it just reports what they're great and what their risk indicators are okay. And maybe this has been answered but the criteria for win. The conversation start with the entity that they are in jeopardy of their plan becoming insolvent that conversation is initiated by who at the local level of. With you certainly if they come come to david the that we've been do what we can to help them at that point if if it reaches the point where the board uses authority we reach out to them and say you have a problem when we need to talk. Okay so have you have. Have you reach out david to these entities for that conversation I know what you said while go that we encourage representative senators to do that but you have reached out to these end yet yesterday on on this list the one is consolidated would show you and a little bit too earlier the other one is the one that's come up in as rogers fire and that's the one that we have already had some dialogue with their planning on business with the pension review board at their december meeting to explain what their plan is to actually bring the funding backward needs to be to protect the benefits ok in for us to be able to see what their responses are I mean generally are you getting a response like what center into dialogue which have a conversation or the you know just blown you off for getting new or the correspondence that comes back to you once you make them aware of it. How is that information disseminated is shared out to us as a committee of that remember seen it maybe it's there and I don't remember seeing it or. No your memories correct it has to this date it hasn't been shared with the committee wide what we've done is that the all locations that we have contacted there were deemed projecting the solvent or like in rogers case they're coming up to the point made the right at that threshold like jodies are direct actually at ten years. So you're any any movement to the negative side they'll definitely be projected insolvent but because we already had that dialogue with an initiated well contact with the local legislators with the communication thread that spend going back and forth of the city in the prb however if the job retirement wants us to your provider to your staff you know you those communications we obviously can definitely do that for you. I'd like to request that mister I got one more question would like you sendles correspondence to the to the staff to be sent out to us if you don't mind so we just kind of see what the tone is coming back toward you because I think if we get asked to get involved down the road I think would be good to know what kind of reaction and what kind of response you're getting from these entities if you take on a plan that is on the verge of going in south the question was asked while go do they have to make up the difference to what it would be in order for it to be solvent or we're just going to absorb them and everybody else sits already been in the planet going to have to help play catch up for that entity two thousand one as we definitely will make the provider guys the the notifications that you requested to your style and then as far as the plans that do consolidate yes the location does make the ongoing required employer contributions to make sure that the benefits are protected in its advertised over fifteen years schedule. So they got fifteen years catch up if you take them on in the red that's correct yeah it's not like it's a one time up front love some payment they have fifteen years scheduled all right so the rest of the members have been participating in the plan along the art are doing good are paint for those that have maybe just held out to the better end and have no choice you're correct each location is paying their own liability that's correct thank you. Okay are there other questions. Okay. We are just required to show that we have reviewed this so. Thank you very much dody for your report. So no objections we will show this report as being reviewed by committee. All right this time i'd like to ask director amy fetcher and large gilson legal council for april to police come forward our committee is required to review some rules that are done by our different committees we've got four by apers and then wine by arkansas state police retirement system so. I will ask you guys to identify yourselves and then proceed we need to review each rural individually so it's like percent more say that each rule is reviewed and then proceed to the next year or so please identify yourself welcome glad to heavy this morning. Amy fetchered executive director of apers. Laura gilson general council aprils richmond gills staff attorney apers. K d proceed with the first rule. Yeah sorry just wanted to say first that this at these five rules include those that came from the legislative session this year and our april package which was smancered by senator hickey and representative matters and i'll let them present each one. You recognized thank you the first rule the we've asked for the committee to review is rule twenty four. Car one two thirteen and this was to comply with act to forty seven of twenty twenty three which reduced the marriage period from one year to six months in order for someone spouse to qualify for benefits are there any questions regarding that. Does anyone on the committee have a question. Alright no questions than the committee will recognize this rule as being reviewed. Next role the next rule was a rule twelve three twelve regarding local elected officials and the reason for this rule was to make the real easier to read and understand april's worked closely with the association of architect counties and that's why you'll see a chart that is in the rule so there it's easy to communicate with those local elected officials. The. Okay. Any questions by the committee. Okay we will recognize this rule as being reviewed as well. The next rule on a rule for town was not based on a twenty twenty three at however there were several acts over the years that had not been addressed in the rules and so we needed to update this to make sure it didn't conflict with arkansas code. The. This is regarding the purchase of architectural garden armed forces reserve a sir. Arm forces reserve service credit does not change the law or the administration of the war whatsoever okay we have a question on that senator chesterfield you recognize for your question well just to request mr chair. I would ask that when we have these reports that at least they have numbers on them so we all know exactly what you're talking about where it is. Examine sure where you are right now. Are you on marker what were you i'm not energies exhibit f one on this check this one with the insurance f three f three yes okay f one f two f three and f four. Thank you very much. Any further questions. And the repealer for eleven was a rule regarding the purchase of arts or national card in our forces reserve reserve credit which was actually clarified into the law and so there's there's absolutely no reason for this rule. So we're seeking it's repeal. The. Okay are there any questions. On that rule. Okay we will consider that rule review. All right we will go to exhibit g. Rule fourteen. Drop provisions for s as. All right this is for the arkansas state police retirement system at the different system that a person administers and again on the basis of a twenty twenty three act it reduced the marriage period from one year to six months and for a spouse to qualify for survivor benefits. So that is the bad is the reason for this rule fourteen. Amendment there any questions I do in questions all right well consider this rule reviewed as well thank you very much appreciate your work. All right last one the agenda is the report on current state of the arkansas teacher retirement system welcome for your first official visit our new director mark white. You'd identify yourself and then you are recognized to present. Thank you miss chairman more quiet arkansas teacher retirement system it is showing all right good morning members i'm very happy to be with with you this morning not as much first time in this new capacity or so i'll work with many view my previous capacity is a cheaper staff at the hs very excited to continue to be working with all of you are in this new capacity and working with the are great team at the teacher retirement system. What bring you just say some a brief update on the status of the system and certainly we have to answer questions that you have of course always want to start with the purpose of while we are there for the system or number one we are there protect the retirement security of our educators and school employees in the state and that's some we keep in mind every day that we have our members are relied on us and the job we do to ensure they have a safe and secure retirement but we also know that that retirement is an important inside of for individuals to come into the teaching profession to work for our schools and the stay working for our schools and so we always will do everything we can to help school districts in recruiting and retaining those school employees because i'm sure that many of you have heard the difficulties that your districts are having an attracting teachers and good stay in the class room it's just though it is very tough job market right now and we won't be a part of that solution to help encourage folks to stay. And then finally always one mission that we keep monday we wanted everything we can to springthen arkansas economy now I would be careful in saying that we are not in the economic development agency our number one priority is to generate return for members to protect the retirement assets but we know as we do that we can always want pay particular attention to looking for opportunities in arkansas or we can help the economy help create jobs or secretary system was one of the major partners in developing big river steel which has been a tremendous success northeast arkansas we've just recently joined forces with the same management team on a new venture how bar which will be a still rebar meal this would open near a big river still and we so we always look for opportunity is like that to help support our state's economy. It's for occurs data saw on **** were just under twenty point four billion dollars in assets i've shown you the targets there of where we came for investments were invested about half in equity and the start market public equities we also have investments in private equity which has been a very good driver returned for us in real assets which that includes everything from office buildings to farms to phones that are fine power in infrastructure opportunistic investments which is based on a grade bag for some other different types of investments and then also of course fixed income and i've as i've been speaking to retired members of talk to them about how diverse fought our investments are because diversification is such a critical piece of protecting those assets they'd always realize that h t r is we own farmland and factors yesterday I was disarms that we have just south of lono that do so rise to be in corn and that's while that's not in this could be pretty huge return for the system it produces a stable return for us and so we were very excited about those investments. And that performance does show in our return for this most recent fiscal year we had a non point two percent return which we were very happy with are assumed right of return for extra purposes of seven a quarter that's the return that we need to hit on a over time in order to ensure there are actual or projections are correct and so we will exceeded that for this most recent fiscal year and as you can see we've exceeded that for in the last three years over five year period and over a ten year period so the find the system has a good track record of generating that needed return. Membership just under a hundred and fifty thousand members that we represent about eighty thousand of those are actively working in schools between our active category those who are in the t drop program but are still working in those who have already retired they're still working for schools and who have little over fifty six thousand members who are retired and receiving benefits and no longer actively working for one of our covered employers. For a payroll and I will make a confession here when I when I first started at the system a first day I was looking at the or chart and I was asking myself does it really take that many people to pay just our few dozen employees. And now it was explained to me that no payroll is our payroll far retirees not our employees such so make sure that you all don't make so mistake added on that first day for this most recent worth of october we paid out a total of a hundred and fifteen point four million dollars when you pull out the tax and insurance with holdings and also set aside the outer state payments that was ninety three and a half billion dollars going to retirees in arkansas and that's money they're spending to buy groceries to do the shopping to pay the bills as I said we know that that has a real impact our local economies especially if you have a small town that has not a lot of industry five ten million dollars of our torrent minimum common every month can have a real impact on that economy. And then contrast the administration are the system has historically been very efficient and how I administer is the system I missed our expenses for this last fiscal year six point four million of what we pay out in payroll to retire you to less than half of a percent or you can measure it is about forty seven dollars per member which is a very good number compared to other systems nationally and we have as of this week seventy two full time equal that employees at the system. And actually and before I get the future plans on the employees one thing I do want to hollow for you in coming in and discovered we have a seventy employees there already seven employees of ours who have definitely said they are retiring by the end of this fiscal year there's not a three or four that are locked later tower and still more that are eligible to attack if they choose to do so and so not that is going to create an issue for us as we go through this year I have that many employees walk out the door that's a lot of institutional knowledge to lose it one time and so we are taking steps to to fill those gaps we're going to try I expect that we will see our employment numbers of up temporarily further major this year as we bring people in early so they can work with the retired employees learn those jobs and be able to seamlessly step into that role once that other employee retires at the end of the fiscal year so you up as I said your spectral cs slot increased employees and then it should come back down once those retirements all hit at the end of the fiscal year. And then finally for our future plants are far things that outlined course always want to focus on improving processes and making sure that our quality of service is at the top level as you know and state government there's always room to improve on on customer service no matter how good of an operation that you may have and so we want to look for every opportunity we can find to improve the quality of our service to our members. We want to have an increased focus on educating our members so they understand their options they can find answers their questions we have a great staff that operates the call center and interest calls and walks members through their situations and cried advance and that's a great thing but I think the more that we can have opportunities for members to find their own answers whether our website are through remember handbook that will help reduce the load on that call center and also more convenient for that member third we want to do more to coordinate with employee benefits division and even though we do not have any authority control over those health insurance issues those health insurance questions are directly related to our members retirement and they're very often making decisions on health insurance at the same time they're make a retirement decisions so we've already started discussions with ebd about doing a better job of coordinating and making those decisions easier for our members. We are working on our revisions to our rules our board is going to consider the follow version those rules in december and so I expect that we will have a package for you probably in the spring that will be asking at review not expecting anything major there it will be probably a lengthy package about it will be implementing changes from the legislative session making some other changes that just they're needed in those rules and been needed for some time. And then finally we're going to spend the next couple of months working with our staff how with our bore of their members honor strategic plan yogiber and what sir data if you don't know where you're going you'll end up someplace else and so underscores the importance of known where you're going and having a plan and so we're gonna work to put that plan together and sell that up and form our choices and decisions in the car mean months in years I would actually get a quick review so i'm happy to answer any questions mister chairman. Thank you direct wide we do have a question we've got a few senator hammer you are recognized for a question thank you miss scheer in the past I think we've paid out two people that it's been determined that they were deceased any update on that and you feel pretty good about where we are any issues you want to make us aware of on that yesterday that was an issue in the past two things that we have done to try and address that one is we are using a number of datas exchanges and services in order to get that information women river does pay us course in state we get most of that department of health and that helps to sign if i'm going to suggest you're in state we have some private services we are paying for to get that information from other states as that is providing good fee to a shop is identified in most cases we also have a verification process we do for our outer state members so they have to check in with us every so often so that we know that they are still alive and still using those benefits we are looking at some ways to make that process the more convenient for our members but still have it that guarantee there and this well i'm not aware of any new situation we've had it over arisen since those article findings and i'm not much for feeding into the rumor mile but I want to ask you because it's more than give you an opportunity to accept her to deny rumor mill out there is that the funds can be rated to you pay for teacher salaries and other things do you have any knowledge of that sitting here today are you participant to any conversations about that and do you have you've been approached about considering that no no and now and I know that rumors out there up i've been trying to found the source of that room as it is been popping up for weeks now but I have a talk with policy makers II can say for certain we win by no evidence of a plan for that no one has a process with that plan and we're not aware of any discussions around any such plan all right thank you thank you. The. Senator chesterfield you recognized thank you thank you message here and congratulations on your new position but I have one when she to succeed greatly what I do as we move toward them. Trying to stabilize employment. Because a lot of those folks have been there for a long long time and have given us great service those of us were members of this of the system what is the starting salary for those who were coming in and what is the every salary for your employees because it may help in recruiting I don't know the average seller off hand I will tell you for our positions that work with the members those starters gs seven and I have to double check to see what the dollar figure on that is that is there's comparable to similar positions around stay government that may be slightly better but at the same time we are stay going generally is having a harder time founding candidates to come in we are we're getting candidates but i'm concerned about the feature and so we were having some discussions about him and others to see what wouldn't do to improve that and make sure it wouldn't continue to record quality employees who would write that good customer service and I appreciate that thank you thank you mister and servants one they actually want to add I understand your the importance of it to you but i've been telling folks that have been speaking with the my wife is a teacher who's looking forward to retirement my mother my mother on father in law are all retired teachers that are the family members so bottom on if I mess up i'll hear from them before here from any of the rest of you. Thank you representative right you recognized thank you thank you mission mark you have questions from the outside folks coming into this from town return just wonder a couple days ago the stone market really took a big here in what kind of affect would that have always with this return it certainly does have have an effect because we bought about half four in investments are in the stock market now we do have a significant chance that is actively managed so we have managers are working to try and beat that over top and an in general they've got a pretty good record instead helps us to little better than the stock market a large that's also while we are so diversified and so while we have investments in formland in an office buildings as well as in fixed income products because the more diversified you are the more protected you are from those no daily upstairs down to the market thank you thank you mission any other questions mr white. Thank you very much for your presentation thank you very glad to head you at arkansas teacher retirement system working with you. All right one more item is guarantee do you mind coming to the table please. The. I miss spoke earlier when I talked about the position for the lot fee board being voted on by the senate this guarantee came over to tell me that I had misspoken so would you please explain that thank you mr chair marty gary with the bureau of legislative research yes under the arkansas code there are seven positions on the lot fee board four of those do require senate approval however their three positions that are submitted to the governor through the chairs or through this committee and those three positions do not require senate approval so there are four that do three that do not and I believe the one you heard today does not because it's a named submitted by this committee okay and. Center chest filled I told you that it would be voted on by the senate so I didn't want you to leave without me correcting that so does anyone have any further questions of mister's eyes or. I will tell you that. I will vouch for this man. One of the finest man I know good reputation in our community i've never heard anything but good things about him I think you will be excellent for the lot be bored. And bring an expertise level that will benefit down so. Okay any questions of misguarding. The. All right thank you so much and any other business to come before our board our committee we stand adjourned.