Public Retirement & Social Security Programs-Joint

Share because this meeting to order I see a quorum. Good morning everyone's good to have everybody here far first retirement committee meeting. Look forward to working with everybody Les Warren I'm going be the House chair the glad to have my co chair here with me would you like to say anything. Thank you representative Warren I've I appreciate everybody get here early and being able to introduce ourselves and and I look forward to getting up to know you better in and the learning what I can about retirement but just happy to be here depreciated by showing up early this morning thank you. All right we've got this is our organizational meeting we've got a few things planned so that we are all basically on the same page we've got some new members so I think some of the things that we're going to discuss this morning will be very beneficial and for those of us who've been on it before to be good the reminders of what we do so at this point the like to introduce our two vice chairs from and I don't see Greg here yet so maybe he'll be here in a few minutes on the house side representative mark very good to have you as a vice chair per se you being here and serving on the Senate side it's going to be Greg Leding and Greg's been on the committee the before as well so we've got a couple of good the vice chair share so. All right so we're gonna move on to the second item. So every meeting that we have we're going to have to have a at least eleven members here so I know that this is a Monday morning meeting and sometimes you have come on Sunday night in order to be here so appreciate the extra effort but we need the members here at least eleven nor to get started with the meeting Let's go on in the just for the benefit since we've got new members let's start down here Senator Tucker if you to introduce yourself and will get everybody I know each other real quick here. Thank you Mr chair Clarke Tucker representing Senate district fourteen here in Little Rock or were in district fourteen right now so welcome everyone to the District forty. Go ahead. Good morning Kim Hammer state senator serving District sixteen sling county west plus County a former Senate chair of this committee thank you. Thank you at Brianne Davis I'm as serve Polk County most of Conway county and the city of Dardanelle. All right Sir Hickey. But Jimmy Hickey Southwest Arkansas thank you. Senator Chesterfield and the Chesterfield Senate district twelve I represent portions of little rock north little rock one male sure would Jacksonville Riceville and the unincorporated areas in between it is good to be here this morning it's always a joy to serve on this committee. You got that speech down Sir Chesterfield. All right. All right representative Perry. Thank you Mr chairman mark Perry district sixty six which is Jacksonville Going back towards Jefferson County. Representative Fite. The morning I'm Charlene Fite representing portions of Washington and Crawford County. All right representative Maddox. Representative John Maddox district eighty six and that is pole coming ran a portion of Howard County. Representative bright. Yes thank you Mr chairman representative John have represent district number thirty six which is a portion of Poinsett county and a portion of cricket council and glad to be here with you all for very importantly. Representative Collins. And your Collins representing district seventy three right here in Little Rock from Riverdale obstacle. Representative of a group. I'm sorry represented my college. So I couldn't see their. Get to be McCullough representative district seventy four here in Little Rock. You're also sitting in in downtown up through the middle of a almost a for thirty. Right now representative McCurry. Thank you chairman representative McGrew District eighty five issues a part of hot springs hot springs village and western brown county. All right representative Walker. Stephen Walker District twenty seven injured County all the way to Newton County. Okay and then representative Anders thank Mister a written White interviews I resent District ninety eight it's most Washtenaw county in the north end of Columbia County very southern portion of a county in the northeast corner of Lafayette County. All right thank you. It all of you introducing yourselves I want to introduce our staff to you the to my left is Blake Gillam are committee analyst also happens to be a a hot springs guy that I've known for a long time destiny Davis is back here. that she's going to be our committee assistant and then several of you have probably worked with Laura Reynolds she's are committee attorney is lark here okay. Okay so lar has been great to work with the she replaced Jennifer Lee will and this done a great job so you'll enjoy getting to know her. All right. For the House side the each of you has an alternate They can only ACT when you're out if you're not going to be here you need to make sure that your alternate knows that you'll be out so that they can be in place so that we have enough for our meeting so. All right. I retirement committee will meet at eight thirty on Monday he's here and mac Hey when we get rolling right now this just a an organizational meeting but when we get rolling will probably move back to eight so that we can get more done. I know of an ounce this in the house and I think senator Payton has introduced in the Senate but the last day to file retirement bill is this coming Friday the twenty seventh so if you have anything on retirement it needs to be filed this Friday. And then I will get was senator Payton and we'll figure out a photo time in the next couple of weeks for our committee. Everyone else said at our next meeting. So the process for our agenda agendas are prepared two days before each committee meeting so basically anything that we need done has to be turned in by thirsty for our monthly meeting. The legislators who have bills on the agenda will be sent sponsor notification in their actuarial cost study the day before the committee meeting and basically everything in here has an actuarial study to it so when and we're gonna get to a couple of motions here in a minute but when senator Payton and I get a bill will have the ability to go on and send it for a study. And say that again. The study and. Blake's gonna try to get that out two days in advance so. Bills listed on the. Today's agenda are in the order referred to the Committee we're going to probably what we did last the session worked really well we're going to try to do all the bills from each retirement plan Lotfi Asher's teachers and apers grouping together so that we get all of one done and then open it up to individual bill so that worked real well so that's price path will take again. So at this time I want to go over the motions that we need I need a motion to give the cochairs the authority to place shell bills under the deferred section until amended once amended bills can be placed on the agenda as ready for action or send to the actuary all right I have a motion any discussion. I'm sorry second. The Johnny all right. You did I catch it okay all right so any discussion. All those in favor say aye. All those against say nay. All right the motion is approved. All right the second one I need a motion to give cochairs the authority to immediately send all bills requiring actuarial study to the Committee actuary whats the Bill. So moved. Okay I got a motion to have a second thank you all right. The any discussion all those in favor say aye are any opposed say nay. All right the motion carries motion number three the motion to give cochairs the authority to send amended bills to the committee actuaries if the amendment requires an additional actuarial study so so moved all right I need a second all right. Okay any discussion all in favor say aye opposed nay all right motion carries. The. Okay. The bill that increases the multiplier changes terms of or allowing the purchase of credited service shorting vesting periods for shortening the years of service required for standard retirement without penalty or which would establish a new or expanded public retirement programs requires a two thirds vote of the committee which that would be fourteen votes. All other bills require a simple majority of eleven votes. Okay. Is there any discussion on any of that. Okay. Yes ma'am you're recognized senator Chester you of. The votes of the whole body not the quorum is that correct. We say yes to search votes have to be of the total body right the card our committee yes ma'am okay is not of the court. That's correct thank you. All right any other questions and I I apologize I referred to you as senator Chester I left off the field so Senator Chesterfield my apologies. Yeah. Excuse. Okay. At this time we're going to basically combine B. and C. we're going to ask our directors from our retirement plans in our actuary to please come forward to the table. they're going to have a brief presentation for us and. For our new members let me just say that I remember my first time this is my fourth time on retirement and I remember coming to this committee and people would refer to eighty R. S. or Asher's OR lofty and I'm like what in the I was just trying to figure out what what they were their acronyms for each of the retirement system's these are our executive directors and of each of the plans and so what I've asked them to do today is to introduce themselves. Give you a brief introduction the gentleman in the middle is Jody Carreiro who is our actuary for this committee any actuarial studies To be done or done by him he's done a great job for us he's great to work with we have Clint Rhoden on the far right who's with teachers Amy Thatcher who is with apers robin Smith who is with the highway department and then David Clark whose with low fee so I'm going to turn it over to you guys for your presentation and thank you for being here this morning love working with you guys and look forward to a good year this year. All right good morning everyone I'm Jody Carreiro and and I'll let everybody else talk about a lot of what we need to do today is to cover things is represented Warren mansion I'm my farm is the actuarial firm the tire by the bureau legislative research and then we work primarily for this committee and our job is to provide you the the actual cost days ago with each one and I've got a sample I think that's in the packet that we'll talk about that in just a minute let you see what that what that actually looks like so what we want to do is a group that is to to do a couple things we're gonna everybody will have an opportunity to to preview and give you a little overview of their system I'm gonna overview a lot of the terminology that will use and as we talk about bills and about talk about the cost and all that and one thing I always have to kind of point out is as you know Everly will hit several numbers as we go through here and just to point out that the firing police lobby in the old fire local fire police plans are calendar year but all the other systems are a June thirty of plan year so there sometimes is a little different and will kind of point that out AJOT yes Sir if you would as each of you to speak if you have a handout would you referred that at the beginning of your talk so that the members can get that hand out candy yes are there on the same page with the plants are going the right and and yes there should be a hand out of the presentation is on your screen of mine which is two slides per page and start with the page will load that a moment ago And But I want to turn back and let the directors again tell you and tell you who it is that's in their plan as representative Warren says there's a bit of alphabet soup here with all the different initials and all that and and it's important I know for you to know and make sure you understand who's covered by what plan because sometimes there's there's references to this group and that group may be in more than one planned and so want you to know that and let each of them tell you who they are real quick. Clint let's start on that end. Now just the just a hello and and who who you represent who your plan as an. Yes Clint Rhoden executive director of the Arkansas teacher retirement system so the teacher retirement system covers essentially what I like to call I mean all educators in Arkansas so it's not just the teachers it is also the support personnel and administration staff to make that up. Good morning Amy furniture with apers our system actually covers three plants which will get into in my presentation but it's public employees the state police and the judicial system. My name is robin Smith I represent Asher's which is the Arkansas State Highway employees retirement system I it is the single employer benefit plan for the Arkansas department of transportation. I'm David Clark the executive director of the local police and fire retirement system or what they and also the executive director of the fire police pension review board appear to be both entities cover police officers and firefighters. So. I wanted to do that just to come back as a as a group then and say all of these groups have a lot of employees in different places and this slide summarizes that as of the most recent valuation date. And the bottom line here you see that there's carry people in different categories but the bottom line is is that there's over two hundred eighty two thousand our Kansans that directly benefit active a retiree the directly benefit for these plans I guess put that another way there's one in nine adults in Arkansas that directly benefit from one of these plans so clearly the work that you're doing this committee is important and you know we want to do everything we can to provide you what you need Hendren nine hundred nine thousand of that two hundred eighty two thirty eight percent of those are folks that are receiving benefits and it's pretty significant for example teachers is going to pay over one point three billion to retired members this year. apers is gonna play nearly seven hundred million to retired members this year's last just two of them but in total all the systems are going to pay over two point three billion dollars back to and ninety ninety four five percent of that is to our Kansans back to our Kansans in the in all over the state of Arkansas. So. Pretty pretty important has a pretty wide ranging affect and I know you knew that are plans that that we have here that we're discussing today are predominantly defined benefit plans that are advanced plans that define the benefit not just to find the amount of money that's going in Arkansas doesn't use the defined contribution plans like profit sharing for one K. salary deferral things for the primary benefit it is used for some secondary benefits this lie just kind of summarizes real briefly some of the differences between defined benefit defined contribution defined benefit on the right hand side of that you know the employer contributes there is some employee contributions and most all plans the trustees then choose how to to invest the total fund as opposed to in a defined contribution like four fifty seven or four one K. or whatever where the employee kind of chooses where their investment is the benefit for defined benefit as I mention is the debt is the definition of the benefit whereas for a defined contribution the benefits defined by how much that bucket of money accumulates to the final pay out is based on where the market is at the time and and many of you know that from other personal experience so. Where are defined benefit plans the benefit is is pretty much guaranteed to the to the members. So in addition we do have some defined contribution pieces almost all these employees have at their disposal for fifty seven or four three B. salary deferral type plans that they they can use and In particular state employees you know that day was in two thousand thirteen that it was changed so that the state employees had to contribute a little bit to start out with a automatically were enrolled in the dining plan. One big point I want to make sure that we stop on just for a second today is the fact that. All the money from these different plans when they go into the plan they go into a trust and that trust is in a sense is no longer Arkansas's money it's not the employee's money it is money that is set aside to pay benefits and everything kind of circles around that and since it is a trust and it it it has a you know the legal definitions of that at all there are certain fiduciary duties that go along with that and this next sauce light is probably a thirty minute presentation I'm going to do it too okay but the fiduciary duties that go along with that is all based on that fact that it is money the set aside for special purpose and that starts with the duty of loyalty or you may hear say exclusive benefit the benefits can only be used to you know the money can only be used to pay benefits for the participants of the plan and so there is a duty of loyalty there's there there's a duty of impartiality that there's fair or administration of the benefits there's a duty of of prudence that they use the skill and care of a prudent person you'll hear mayor the prudent man arm a time or two as we go along But there's also a duty to manage the cost and all systems do a good job of trying to keep all the cost down because the money for the ultimate beneficiaries is not to to spend those cost and then finally a duty due to comply with the laws of the state and laws of the federal they as they apply to the state plans. So every actuary actually has to say here's the basic pension formula and it's because it's true and every time that Whether it is defined benefit or defined contribution here's the bottom line the contributions that are put in plus the investment income those aren't on that is what provides the benefits and has to pay the expenses and you'll see more of this and in the back of the presentation notes not part of what we're gonna talk about today there's there's more about how that all fits together but those contributions and investments then have to provide the benefits so we have to figure out how do we determine the right contribution and that's a lot of what we talk about is how what is the correct contribution to keep the systems well funded so that brings us to kind of a section a code that kind of guides all of that when it comes to talking about what the contribution should be and that's twenty four to seven oh one which is just the basic financial objective the applies to everyone. And it's worth stopping in reading as to establish an received contributions that expressed as a percentage of active member payroll remain approximately level from generation to generation of state citizens so advised say generational equity sometime that's why we we try to keep saying they'll try to keep things as level from today citizens as it is for the next group of citizens and I contribution therefore that we try to calculate then has to be sufficient to cover in this is in that same section sufficient to cover the cost of the current benefit commitments so people are working right now there do a benefit so we need to save something for that plus a level payment over reasonable number of years to pay unfunded commitments and we'll talk about those terms in the next couple of minutes. So very important and that that guideline that guidance drives a lot of the discussion here so I'll come back to that. Okay so in determining the contribution or determining what's there we have to make certain actuarial assumptions and M. and and do that and so one of those kind of rhetorical questions I always ask is do the methods or assumptions that we use in making our calculations ultimately determine the cost of the pension plan. And sadly I don't determine anything because no the assumptions. Whatever happens happens the assumptions that we make are you know just a and saw of guidepost to try to get us to that point but the assumptions don't change what the cost of the plan is the way people retire when they die all of those things what the term means the cost of the pension plan but do those assumptions and methods really matter and absolutely they matter because going back to that. Financial guidance that we have we want to keep things as level from generation to generation we want to allocate those costs in the right way and so the assumptions do matter so it matters how we get there. here's some of the assumptions that are made and just a quick thing we will talk about all this but just a couple of things one that gets talked about a lot is the discount rate. That's assumed. And all of them are just just a little bit different but they're pretty close but when the discount rate goes up so if I'm assuming a seven percent discount rate and that discount rate goes up to seven and a quarter percent that means planned Koster the calculated cost would go down and so every assumption has some different very ability another important thing that we've seen happen in our lifetimes is that uh then how long people live has changed and that's a good thing people live longer now than they did thirty years ago and several years longer on average but when life expectancy and that's down that's down there toward the bottom of that list when life expectancy goes up and people live longer and means the cost of the plan goes up so there's some things we don't have control over long term a life expectancy is increased and so some of the plan cost over the years of increased to reflect that as those assumptions try to reflect that. So that's some of the ups and downs of that okay here's a few of those terms now one of the things that I believe of we have in the packet is is a a list a kind of a glossary of some of the terms and several of them are mentioned in this presentation but hopefully we have that glossary and you know if the chair see fit will just have that in your packet every time so that you can refer to. If you look in your green folders it is clipped in on the very back on the right side. So. As I said if the chair see fit that'll be in your folder every time so you'll have it to refer to if you need to because there are several important terms here we'll we'll cover a few of those real quickly here. one I'll often referred to present value benefits or present value of future benefits and first thing actually has to do is determine is present value benefits and that's putting a single number on all the many things that may happen and we do that by saying here's the types of benefits that could Kerr and then here's the probability improbabilities someone will make it to retirement the someone will leave before retirement someone become disabled all the things that can happen all those have a benefit that go along with them and there's a probabilities that are the assumption that does different benefits would happen so actuary will take all the benefits here's the the probability of those benefits and then we discount all of that to whatever date were measuring to get a single number to do that and to kind of put that in pictures the the purpose the retirement plans to collect a pile of money they gets paid out over the retirement so I have my stack of coins here right in the middle is the retirement age that's expected so during the working years we need to accumulate of the right stack of coins at retirement age and then during. During retirement then we pay that out to the beneficiaries of the plant. So everything kind of flows in that fashion so the present value is at what point. So beyond that will say and actuarial accrued liability sometimes you'll see a ill or a A. ill for accrued liability that is just an allocation of the present value to appointed time while we're accumulating assets what should our target B. I'm halfway through my career what should my target liability be so that I have the right stack of coins in the middle and so we have methods to do that so going back to our pictorial example there I have a point in time how many coins should I have stacked up that's the accrued actuarial liability. So that liability for someone who's retired then it grows into you to retirement and then as someone's retired. We have that stack of money which then goes down and so at some point after retirement we calculate the present value and that's the target of how much money we thank the best bet for the amount of money that's needed to pay all the benefits. Okay the other thing that we determine it during for working years is called normal cost. And if you remember back in the the slide of our financial objectives that is to fully cover the cost of the benefit commitments made during the year and that's what normal cost is that's the actuarial term that we used to say how many new coins do we need to add to the stack you know going back to our picture how many new coins do we need to add this year so that are stacked is going to get to the right height at the retirement age all right. And then once we calculate all these accrued liabilities four ACT is a retired and all the different groups and at all act together we thinking your picture where we are so what we compare that to. Well every system has a market value of assets what you can look up that the assets are worth on a day but what we used to do this is what's called an actuarial value of assets it's also referred to as a smooth value or a finding value and all that is is that the gains that are above or below the assumed rate then smoothen over for five years so with the effect is supposed to be that that idea that contributions remain as level as possible for each group of citizens so that helps moved that out because as we've seen the last two years. June thirty twenty one the market was about as high as it's ever been in June of twenty twenty to the markets as big of a drop as as it's had in quite some time so those two things then get smoothed out a little bit so the contributions don't spike or drop because of one good year one bank. So the unfunded actuarial liability. Or the U. A. A. L.. I'll try to always build things out but I will promise I I you know you have this terrible need to try to abbreviate things we all do so. But but that's what it is it's the unfunded actuarial accrued liability and that is just all of those accrued liabilities that we've calculated minus that actuarial value of assets and that parts unfunded it's kind of unfortunate term I think because it sounds like. That's a terrible bad thing to have on funded is that the that's a payable we need to find a way to make that go away and yes we do need to have a way to fund that but it's not like a payable that's due today it's something this do over the lifetime working life of a person and so the unfunded accrued liability then that's what we have to pay off over a reasonable period to be part of that funding target that we talked about. So as these guys in the next couple minutes give you some of the the numbers that are associated with the different systems how do we know if that is if they are well funded or not well funded and they are where they need to be and there's several things that we can look at and we often use a a House example and you've probably heard that before but here's kind of how that goes our house is our accrued liabilities and then every year there's some new additions something new that has to be done something that has to be repaired and will make that the little yellow extra parts so the the House then we have our equity in our house and we have a mortgage for the most part and the equity would be the actuarial value of assets that we're using and then the mortgage would be the unfunded now it's not a bad thing to have a mortgage the bad thing if you can't pay the mortgage right so are addition is the normal cost or whatever and it gets added on so how do we know if our house is well funded and this is the reason it's a pretty good example because how do we know if our own home as well fund. Well we we we know that we have to have a reasonable amount of equity in our house if were eighty five we don't need to have a thirty year mortgage right we we need a a reasonable amount of equity funding our house and we need to be able to have enough monthly income to contribute to pay the mortgage and any of those additions which goes right back to our definition we need contributions that will pay at least the normal cost plus a reasonable pay off of the unfunded actuarial accrued liability. So. Here are here's all that in words a healthy contribution right policy and all systems have one that'll pay and normal cost and will pay off the unfunded current law implies that about thirty years is the Max that you can do but all the systems have built in over the years that they're bringing that down which is a good thing for lots of reasons another thirty minute lecture we're not going to do today but all those are down to about eighteen to twenty years for a funding policy. So that's what the actual contribution radius. I would do one more one more slide here and I will referred to you and then we'll switch and let them say what they need to sign. Well I refer you to what why would I'm here why we do what we do for the committee so if we go back to our example our stack of coins and we are going along and we have an accrued liability. Now As changes proposed and in my example the change that's proposed here is to shorten the retirement age all right this is all based on that retirement age right there in the middle so I'm going to shorten the retirement age or retirement eligibility in some form or fashion so I now have a new blue a new blue retirement age. So what does that do to my stack of coins. All right watch closely powerpoint magic here. my stack of coins is raised because I'm I have to pay more benefits and it scooted to the left. You see that. So my new retirement age has changed the shape. Of the liabilities of the plan a little bit by making me need to accumulate more and I have to accumulated faster and what that turns out to be is the taller stack of coins means I have to accumulate faster and it moved that which is a change in the actuarial accrued liability so for example in your packet again you have a letter from me from the last session. I don't know where where it is in the packet but in in your package you have a letter from me that the is it in there. Not many yeah you gotta you gotta bills and then right with that is a green actuarial study all right so that's how you'll see that when we start dealing with bills is that you'll have the bill and you'll have an actuarial study from me many times you also have an actuarial study from the systems they all have actuaries so the system's actuary may also have they be provide you with the study that that has so and and they like to put ours on green paper so that you so it stands out. trust me it ain't easy being green. okay good somebody's old enough to watch the Muppet movie at so on that green piece of paper there you see what we did on that particular bill thank was Senate bill one O. five the one that I did from last time and. That shows you a introductory part where I say here when we read this this is what this is going to do to the system. And then we'll have a often some commentary there and then we'll show you here's what the systems I if if I had a nickel for every time I heard that I didn't understand that. The story of my life right there now it's all right it gave me a chance to make a joke Okay the the bill then we'll say here's where the system currently is normal cost accrued liability pay off and here's the contribution rate and then here's what this particular bill us and the example that I gave you also that there was part of several bills that made the change in the cost and so will also show you. You know here's what's already happened or here's what is happening at the same time they can change the cost so you have that type of an idea that particular one did not have other considerations but almost always have an other considerations. Section and that's where we'll shares what we know about you know is this going to change behavior typically is this going to be something that will has some affect on federal law or maybe it has a connection to other wall that we know about we're certainly not attorneys but but you know in dealing retirement plans for this many years we we have seen a lot of that stuff so will add that so that's what our reports to you will look like. So you can watch for those. Okay I'm going to stop and I know you have some questions in a minute we'll be able to address all of those but I will let the directors. Give me just some high points about each of their systems I started on the left last time so maybe I'll start on the right this time AJOT yes Sir well you've got that slide up but I know that. The six of us have had a lot of visits but because we've we've had some issues but. Where you've got the blue arrow. on that slide I mean basically that's what you would have had. A few years down the road. Is that being at that point so basically you've got a couple of options there. You're you're saying that now you're going to basically you've got a couple of options either you're going to have to figure out a way to get the investment returns. To improve that much to get the asset you need at an earlier time. Or you're gonna going to increase your unfunded liability that's basically two options. And if you try to go with the a more aggressive investment strategy to increase it. You naturally take on thank already asked yes Sir so. And and guys say I'm saying that because we we've had some discussions but every time you change one component of a retirement plan. It requires a greater amount of return assets to be able to fund that plan. Throughout its life so. That's what I just want to point that out that we've got the responsibility as committee make sure that we are making sure that this plan is there for the entire life of every retiree that we get in the planned so I just think that slide is very good thank you for showing that. Yes Sir and Well as I said less there's no question at this point I'm a let the directors do that center just feel okay. Senator Chesterfield you're recognized thank you Mr. Let me see if I can do this in language that I understand. I get it we have had a reduction in return because of the state of the economy as we know it today is that going to translate into an increased announcmenet at the employer. And the employees are going to have to pay going forward we anticipate that. let me give you an unqualified it depends. Thank you. Seriously it well it does part of what I talked about a minute ago about the and and I'm talking generally I'm not speaking for any of the systems they may want to add to this but. In general all the systems use some form of a smoothing method. So they are smoothing the the the losses that occurred when you close the books on June thirty twenty twenty two they are so moving that in over the next few years. They're also still in the process of smoothing in a tremendous gain the year before. In in in statistical terms those were outlined both of those were out liars they were they were on the far end of the scale on both sides so I have a big positive number smoother than in and now I've got a big number negative number Smith. And this is why I said it depends it's not going to have a significant change in the next three valuations. But if we don't see the market come back and start producing again in the fourth valuation this one goes away but this big negative is still here and then that's when we may see some pressure on that everybody's monitoring that very closely because that that's going to be the questions are is the market going to turn around before this moving period ends and so if I were to visit was people like me who are part of retirement system's. And I need to say that because I think we're supposed to clearly disclose where we are as a member retirement system I don't have to look at an increased at this point. I in the percentage amount that I'm paying. In the employee doesn't have to look at it right now we need to monitor it over the next. Two to three valuations to determine if in order to make sure that the system is sound. Then we would have to make this adjustment. Did I get that right yes ma'am okay thank and that is right. Any other questions at this point. All right representative Collins you're recognized. And I'm sorry if this get into the weeds I know we need to move on but it just it raises a question for me do you all smooth dance moving I mean you said you would be dropping a big positive year and you know down the road and and have that the negative there do you account for that at all or is that just kind of where we are we've got four years and that's what we stick with. I have a I mean the that the smoothing method is not built in the law. It is it is part of the decision of the system makes in consultation with our actuary here's what we can do to try to keep the contribution right from bouncing around so much of it is. I'm in it it's accounted for from the standpoint that all the systems I know have had this discussion and you know when we get to that point if there's not some positive market of work happen but by then we know that there could be an increase like this I don't think there anyone it took any actions as of June thirty twenty two except you know possibly looking at possibility of extending that amortization period a little bit but But that's kind of the short version yeah I did I yeah it sounds like we pretty much just take the the data we've got and apply it to the formula we've got unless unless we don't. Thanks. Represent a group you'll hit you but again I recognize you. it. It again. You're recognized represented by your. Thank you chairman thank you for the presentation very good presentation I'm new on the committee it's a quick question on the unfunded portion over the last three five years is that growing or shrinking. In general and HM are going to give you some numbers from their standpoint and they'll tell you a little bit more but in general from altogether it is Shryock until we had this really bad market year of the last three years have been good to the retirement plans as far in in very general terms have been pretty good to the retirement plans as far as experience and as far as some changes they made last time and those things so they have improved and now they're having to deal with the the drop in the market and six thirty point to thank you. Our representative Payton you're recognized. I'm sorry senator Payton thank you Mr my question is about wage growth and and the effect it has on the. The retirement plan can you. Just give us a highlight on how wage growth affects it. Right and I was one of Let's see how talented I am here not very here we go. I was one of the things that I think I had on my list salary increases or wage growth aye aye the third line down well as wage growth increases that will push costs up. I can tell you that prior to the things that have happened in the last year. Wage growth has probably lag to the assumptions a little bit. Before this most recent year and this most recent year. In general again not speaking in particular here but in general wage growth has been a little more than what the assumption is made so that's an area that we got to keep our eyes on because. Higher what all these formulas are basically final average salary times a multiplier times years of service so that final average salary goes up when wage growth goes up so if it goes up more than assume then that's going to do that it also has other effects but on the on the contribution right but yes Sir it is wage growth will have an effect and that's that again is something that is being monitored right now file systems thank you. Representative right you're recognized. Thank you Mr chair rescue vessel as wages to increase probably in the in the short run it's probably going to have the online but at the end of the line when these folks actually come back and retires probably will put a little bit or stressful that Porsche when you thanks. Yes Sir it will accumulate contributions a little faster right now but then as people retire they're gonna retire with a little bit bigger benefit you you're you're right and so it's not something that immediately helps or hurts it kinda adds a little bit of help but then it increases a little bit hard when people retire that's with Dr. Any other questions. All right Jody if you continue with your presentation okay I'm going to pass on to the other folks I started on the left before so to be fair all start on the right and I think Mr Clark just has a handout to point out but I'll turn the Mike to him right thank Jody that's correct I have a two page handout of but the topic shows on page one lobby benefit recipients as of January one twenty twenty three payroll is his hand out that has a picture of the state with numbers on it. Thank you Mr chairman. Again David Clark with the lobbying PRB on the handout you'll sit there was for January eight thousand seven hundred forty nine people that included folks across all seventy five counties that receive benefits in the amount of just over fourteen million dollars on the second page this will really get into the meat of of what I want to share with you today is that the metrics for a couple of data points here for years rather is that uh in addition to the benefit recipients that I just mentioned there were nearly thirteen thousand three hundred active police officers and firefighters across seven hundred seventy Lafayette covered police and fire departments. Now that active member population is made up of two different groups about sixty nine hundred people are in paid status those of the career folks and that another sixty three hundred foreign volunteer status I kind of think of the rule volunteer departments around the state now across those two groups there is right at nine hundred people that are using a simultaneous service credit provision that's in law what that allows for a person to be a role at a paid department and at a volunteer department at the same time and accrue lofty service credit at both departments so person does that over five consecutive years at the end of the fifth year they will have a total of ten years of lobby service credit five years of paid five years of volunteer to force the benefits calculated under the two formulas you know for paid and volunteer service but the point being is that that structure is intended to encourage volunteerism at the departments that are in the rural areas because that seems to be a really difficult area for people to attract firefighters and some of the small police departments as well but then it also helps the members achieve their retirement goals sooner because they reach eligibility a little bit earlier. Now it lawfully operates on a calendar year just like the of cities and towns do sold for the twenty twenty to calendar year the system paid out a hundred eighty five million dollars and benefit payments of which about ninety two percent went to Arkansas residents so as the slides that Jody had earlier show you the dollars really do help in the local economies and that's lobbyist contribution to the local economy is is most recent your as as I said was about a hundred eighty five million dollars. Now for an from an actual or prospective at the end of December thirty one twenty twenty one Lotfi was eighty two percent funded until we fold in New actuarial assumptions that again Jody just referenced to better recognize what's anticipated over the next few years of you to lower assumed rate of return the fact that people are living longer that eighty two percent number it decreases to seventy nine percent which is where the system is presently out. Now the amortization of the liabilities for paid service is are covered over fifteen point nine years for paid service and fifteen point two years for volunteer service while the system could use a thirty year amortization the board of trustees has worked diligently to lower that amortization to something that's more reasonable in their perspective which you know we do agree of course and that also working towards paying off the unfunded liabilities and total removing the system back to a fully funded state so the board is is working on this it takes years though for retirement system to change the direction actually achieve its ultimate goals but we are on track to accomplish that goal. The market value of assets was at three point two three billion at the end of twenty twenty one lobbyist closing on the twenty twenty to a calendar year so the actual market value that will be of put on the books has not yet been determined however that number has dropped back below the three million dollars again due to the fact of the markets for twenty twenty two. Now for this session just to concluding comments is that lobby has one request house bill eleven eleven by chairman Warren and thankfully senator Hammer agreed to sponsor the Senate side and that is to align Arkansas Code with the recent federal change in the H. four required minimum distributions so we're not adding cost of the system or to simply aligning Arkansas Code with federal code and then for the PRB we also have one request that's house bill eleven ten also by chairman Warren and that is to amend premium tax sections of code there's two sections that we need to help mapping language that is no longer needed have the language struck so again no cost these are technical changes in and just their total totality so are purposes to again what costs but go ahead and tighten up the benefit structure we need to so Mister chairman those my prepared comments I'm certainly available questions at the appropriate time we do have one question Senator Tucker you're recognized. Thank thank you Mr chair. Because if Jody covered this this is kind of more general questions and specifically for LAPFI but a city or seven percent funded and I hear you say you are eighty two percent a year ago and I'm just curious what's healthy mark. For that I seen that sounds pretty good to me I know you're never gonna get to a hundred and before what are you we are shooting for over we are shooting for a fully funded state back two hundred percent you know that that will to obviously take time now there's been some schools thought let your children here in a moment that you need to be eighty percent funded well I and the board of trustees a bill that the eighty percent number should be a hundred percent because it's not as though what you're fully funded that all costs go away you still have the normal possibility talk about before so there there's always going to be cost of the system but once you get to that point where you're fully funded that helps take pressure off of a player contribution cost moving forward. And that that's correct we're always I think all the systems goal is to be fully funded so the goal is fully funded or maybe even just a little above but the reality is is that a lot of people of use that eighty percent benchmark to say we're headed in the right direction and that is true to some extent it's it's kind of like the reason I use the House example it's kind of like that if my house saying fully fund right my house a fully funded. And it's okay from my house not to be fully funded as long as my income will make house payments. And that that's part of the thing do you want to be which plans better the planet's eighty percent funded and on a. Ten year. Amortization schedule or the House that's ninety percent funded but they're amortization is you know ninety year law. Which one is better funded will probably the eighty percent funded one so eighty percent is a is a number that's been there but it's not it doesn't speak by itself it has to be in concert with something else. Thank you. All right. Thank you David and we're going to move on to robin Smith. Read the Asher's. A good morning chairman members of the committee thank you so much for allowing us to speak with you today as he said my name is robin Smith and I'm the Asher's executive secretary before we get started I would like to draw your attention to the booklet in front of you this and I'll give you a brief overview of our system and the benefits that Asher's provides within the narrative we've listed or proposed legislation which is comprised of some technical corrections to align the code with the department's new organizational structure as well as the system's current policies and procedures inside the front cover you will find my contact information should you have questions or concerns that you would like to discuss at a later date and if you're you'll turn to the appendix portion of your booklet pages eight through thirteen I've included the slides that will be on the screen today. The Arkansas State Highway employees retirement system or Asher's was established in nineteen forty nine and is the defined benefit plan of the Arkansas department of transportation it's managed by seven trustees and if you look at appendix Asa beginning on page eight of included a brief bio of each of my board members. Asher's is a mature system on June thirty next slide. On two thirty there was three thousand five hundred and sixty two active employees in comparison of three thousand five hundred eighty six individuals receiving a benefit as you can see in fiscal year twenty twenty two Asher's did reach a crossing point of active employees to retirees. During the last three sessions Asher's has worked with this committee to make changes which has strengthened the sustainability of the system I'd like to take a few moments and share the journey or where we were and where we are now. Back around twenty fourteen twenty fifteen it was a time we were ninety one percent funded and offending period was twenty three years after experience study the actuary recommended that Asher's update or mortality tables at that time the actuarial industry was very focused on that particular section and the impact it had on pension plans. Also the new mortality tables of more closely reflected Asher's demographic make up as well as the expected life expect expectancy of the current workforce once we updated those tables are funding percentage begin dropping incrementally on an annual basis and our funding period immediately doubled to over forty eight years it became clear our funding was not adequate so the board looked for ways to address that issue if you look at appendix C. I've listed all the legislation that we passed in the last three sessions I'm just going to hit a couple of the highlights in twenty seventeen of the color was reduced from a flat three percent compound to a couple of capped at three percent. But based on the CPI W. that's the consumer price index for urban wage and earners and clerical workers and it tied it to inflation then in twenty nineteen the employer contribution rate was increased by two percent the employee contribution rate was increased by one percent in twenty twenty one we did several little tweaks to benefits and contributions policy of significance was we change the benefit calculation to be based upon the high five year average salary rather than the high three year average salary. As you can tell about by that list the answers board has made a concerted effort to find solutions that share the burden with all stake holders of the system for example the color revision affect current retirees the contribution increase impacted both active employees and the Arkansas department of transportation all interested parties were asked to endure a little pain in order to sure to ensure that the system is healthy in the long run. So I thought today would be a good opportunity to review how those changes are reflected in the current standing of the system and also show how outside forces also have an impact on those metrics if you look at appendix D. the blue and orange bars represent contribution levels the blues for the employee the oranges for the employer the bold line at the top of the graph marks the level of contributions necessary to reach that thirty year amortization as that's the benchmark set forth in Arkansas Code. As you can see in twenty fourteen that there was a wide gap between the contribution funding level on that line then in twenty eighteen you see the depth where we adjusted the color and over the next few years the graph follows the increasing contributions which are reflected by the extension of the orange and blue bars. Then in fiscal year twenty twenty one the cupellation of those legislative changes in conjunction with the high investment return year of almost thirty percent had a dramatic effect on our systems bottom line are funding percentage went up over six percent are unfunded liabilities decreased about a hundred nine million and our funding period or that time needed to pay off that unfunded dropped from thirty nine and a half years down to twelve and a half years. So let's take a look at that last paragraph fiscal year twenty twenty two. It's a slightly different story simply put along with rising inflation it was a tough you're in the market and it June thirty Asher's rate of return was a negative nine point four seven you can see from that up tick in the black line that those factors impacted Asher's are unfunded liabilities increased close to fifty five million and that funding period bounce back up to eighteen point one years. But as you look at this graph the take away is not that answers have a lower return your resulting in the funding period bouncing back up there's gonna be low years in the market the take away is that Asher's has made the necessary changes which resulted in contributions for fiscal years twenty one and twenty two extending above that thirty year amortization line that is significant because even when experiencing one of the worst market years are contribution policy was to the storm and at the end of the year asked responding period still remained below that thirty year benchmark. You look at appendix II and closing that's the map of asters economic impact on the state of Arkansas we do recognize and appreciate that the system is a cost to the state. However it also serves as a recruitment and retention tool for quality state employees as well supports the OFC Arkansas economy by providing spending power to our retirees and all seventy five counties. Thank you for your attention and I look forward to working with you this session. We have any questions for robin. Okay RepRisk Senator Hickey you're recognized yes yes ma'am just one question is what they did what percent fully funded or you do I take to be eighty two all that over eighty six right now eighty six okay. Are you doing tell me how you're getting there because you said eighteen eighteen years. Hello hello how are you in the eighty six. Because you general questions. Well okay of a yes she G. kick that one off the. The eighty six kind of represents how big the mortgagee is and eighteen years is how quickly were paying at all okay so the the contribution policy that they now have will pay off the mortgage a little faster so okay if all the assumptions were met then they would pay off a little faster fair enough so we got basic fourteen percent fourteen percent of what your total I'm I'm just trying to calculate as an issue no you're total plan so what's the unfunded not the words know what I'm what I'm trying to get it is if we were fully funded and I think Lafayette is less my calculations were wrong if you're it you need twenty percent twenty one percent of your total plan. you know he needs another six hundred ninety million dollars if you if somebody drops six hundred ninety million dollars in there today you'd be fully funded round numbers I'm just doing quick math here so with you you need to you need fourteen percent of our total point eight million if I recall correctly is what we're are unfunded to R. thirty all right that's what I was after thank you ma'am. Any other questions of robin. Okay thanks robin and we'll just move on down the road to the same me better. Amy at yours. Thank you Mr chair and committee members. Senator Amy Fetzer executive director at a pers so we have three systems is one of the things I want to get across to you all ours we have the Arkansas public employees retirement system or a pers you can say it was created in nineteen fifty seven and it covers all state employees county employees some of the many municipalities some of the non teaching school employees district judges and legislators so it is your legislative retirement plan we also have the Arkansas state police retirement plan or Asperger's which was created in fifty one but we do the administration for this plan and then also the Arkansas judicial retirement system H. A. R. S. was established in nineteen fifty three so all three plans have different laws different planned benefits in different administration some like to say we do three times the work of the other retirement system's. Your employees that you. We are a defined benefit plan as the others have been talking about which means you know when you're hired what your benefits going to be at the end of retirement based on a formula. This is different than a lot of private at defined contribution plans which is dependent on what you contribute is what you're going to get at the end and it depends on the fluctuation of the market so the benefit plans are designed to attract and retain employees. You can see at the bottom of the page the multiplier is the years of service or or the final average contribution should I should say is your years of service multiplier time you're fine grit final average salary is going to equal your benefit. The apers board of trustees we are governed by the three boards so are apers Board has a thirteen member board of trustees some of them are ex officio like our state treasurer auditor and the secretary of DFA we have state employees and retired employees appointed by the governor we also have appointments by the pro tem and the Speaker. The ask first board of trustees is governed by seven member board of trustees with and it has two different plans that you're one in a tier two which is just a difference in the benefit package. So you can see how they are appointed some by the governor and some are elected by the state police employees. Then we have our judicial board which is a five member board of trustees they also have to plans that you're wanting to your two and their five members are appointed by the judicial council. The financial condition of a pers as you can see for the three plans we have the eighty four percent funding value for apers eighty one percent for Asperger's and ninety three percent for a J. R. S. so the systems are all funded by the include employee contribution the employer contributions and investment returns. You can see the pension systems at a glance just the number of active members the deferred vested members which are those that are not active currently but will receive a retirement in the future those in the drop plans the number of retirees and the total for all three systems so we are covering just over a hundred thousand members in the three plans. And then the last slide is also something that you have is a hand out just so you could see it a little bit better it's still very small print but this shows that economic impact in your district and state wide of the money coming out of into your counties and into your districts by the pay out. Just the close I'll just say that our legislative package just basically for apers and for state police is mostly technical corrections and some things that to clarify survivor benefits and on a J. R. S. there is some on the contributions if the judge serves after age seventy retirement age. With that I'm happy to take any questions and thank you for your time. Any questions for Amy Senator Hickey you're recognized and and this may be something that I would like to just have from all of them the exact numbers and if you don't know the sitting there as far as a dollar amount on the we always talk these percentages have you calculated like what it would take for you to fully fund. Across all three. So. My. Officers telling me two billion. Right at two billion. Thank you. Any other questions. Okay let's move on to a click rode in with teacher retirement all right. Michael I close enough good can you hear me okay all right good deal yes the thank you chairman thank you committee Clint road the Arkansas teacher retirement system going last I will try to be a little bit faster through my slide so here we go so first slide in. This is what it looked this is the cover page of the handout it's just the ATR S. Bigelow okay. Of let's see all right so slide one we have is the city are member data and I'll just point out that we have seventy five ACT seventy five thousand roughly active members that are actively contributing into the system. that is paid that is helping us fund benefits for over pretty much fifty five thousand retirees in the state and as we've said before the total pay roll out that we pay out will be one point three billion dollars this year. Let's move on the next slide. this is the economic impact map for the teacher retirement system this shows a break out of that one point three billion dollars that will get paid out by county and this does represent roughly ninety percent of the retirees to live inside of Arkansas so that is a pretty big impact that goes in there and added comments that I like to throw in when you're looking at this map this is money flowing into your county's economies by individuals that have a defined benefit plan for will a lifetime in other words they don't have to wonder if that check it you know if they're going to have enough for the rest of their life and therefore they're a bit more freely to spend it as opposed if you have four one if you had a four one K. defined contribution plan you might be likely to well I don't know what I'm going to die so we'll hang on to that retirement savings and and maybe not spend it into the economy defined benefit plans typically flow into your economy a lot more freely than defined contributions to with that we'll move on to the next slide. Of so every year we receive roughly of half of what we need in order to make that one point three billion dollar payroll so six hundred forty seven million of it come from contributions from active members like myself and then the employers that hire that employ those active members. And I will we will go into the details is a breakdown of that how that's made up but I'll go ahead go to the next slide from there. speaking of a lifetime benefit this is a slide to just kind of shows what longevity means Jody to be today it you know it's always going up but this is one of the favorites lights when I go and talk to retired teachers is I point out that we have over a thousand members one thousand seventy five members that are age ninety to ninety nine. Of and of course you know most of those individuals are female and then of course The one hundred years of older. We have twenty eight of them. And and you get to see twenty six seven or female but there's two guys hanging in there were over a hundred so good for them And our oldest member in our system is one hundred five years old. All right. So next slide to the numbers eighty R. S. is eighty two percent funded as of June thirtieth twenty twenty two and that's over a twenty six year amortization period so that's that's the two numbers as Jody said you really need to look at those numbers together so. And that for the actuarial value of the assets is essentially twenty point three billion dollars at the end of end of June and that is really close to what our market value is this year of twenty point one billion dollars. The next slide this is this is a graphical representation of essentially the question it Senator Hickey has asked all of the system but this is the history of it so if you go all the way to the end you roughly see the gap between our funded our assets which is the green bar or the bottom bar. Verses the accrued liability which is the top bar and there's a difference of about four billion dollars there. And it has essentially been anywhere from three to four billion dollars every sense the global financial crisis in two thousand eight. Walking down the slide a little bit more it one quite as big between the dot com crash and the global final financial crisis we were actually making some progress during that time. But the goal of course is to get to the pre dot com crash era where this line is the Green Line in the red on or very close together and that represents a close to a hundred percent funded if not in the high nineties. All right. Of the next slide I have I put together when I started this I kept getting the question with the markets the way they do how in the world do you sleep so I kind of had to figure that out for myself and. The thing out once I realized that this red line that's essentially the money that we pay out every single year to our retirees it has grown over the last what I have here forty years from you know. Close to the zero line up to the one point three billion dollars that it is now but the most striking thing to me that this graph is it's a relatively fat flat line it has a good increase but it is not a really steep increase and the blue line represents the income that the system gets another words contributions that are return on an investment this the C. plus side that Jody showed us while ago whereas. And of course the red line is the other side of that benefits plus expenses. Anytime the blue line is over the red line it's a good year because that means we're going to accumulate and grow our assets and. The status of the assets which is that green bar there is really kind of the the best indication that you know we're in a we're in good shape obviously we have an unfunded liability of anywhere from three to four billion dollars but the assets are growing at a much cheaper rate than we pay out benefits every year and this gives me comfort as an administration as an administrator and I hope we get our members and you all the same level of comfort as well. the last slide I put this together is a representation of this eighty R. S. and altered the defined benefit plans here are long time investors long term investors so one particular year like last year the thirty two percent gain yeah be but that's not that's not anything that spectacular because you really have to look at the big picture in the long term average and the same as this year we had a negative five percent or so it averages out and this is essentially a geogrid Demetric average for the last thirty years walking all the way back to the seventies so you can see here in the nineteen nineties nineteen ninety one. The thirty year average cross the eight year are the eight percent return that's that horizontal bar that goes across the middle of oranges far that's an eight percent return so we APRS has had a thirty year average above the eight percent return mark and it it peaked obviously somewhere around the dot com era get down do the dot com crash rebuilt and it has been a kind of a steady decrease from the global financial crisis to where we are today but it is still above an eight percent return for thirty year average so. that concludes my comments I'll be glad to take any questions. Any questions for clipped. Okay represent right you're recognized. Yes Sir could I ask you this you know on page nine of. Right above the three point two that figures is going down on that chart do you see that changing in the near future to go back up for. The. What what what is what's the three point oh you're talking about okay we'll just the red line is yeah yeah eight two OO yes Sir but the blue line it shows a lack of Thiel's there in two thousand and nineteen but actually in twenty twenty two it looks like they were on our side do you see that changing yes I'm hopefully we hope we hope that will at least level out trend upward again that sharp little spike there to the very end is obviously the result that a thirty two percent regain had in one year and then the correction from that so that's the little hole there at the end that you see. Senator Leding you're recognized. We talked about this a little bit last week the maybe you could expand a little bit on it here obviously part of the health of the system has to do with the number of people who are paying into it and wondering if you can tell us of what might happen to the system if a significant chunk if if we saw a significant number of teachers leave the system leave the profession. Okay I'm I will give you a general answer and I'll probably. It's this over Jody do a little bit more detail but in general that is one of the matrix you know active participants paying contributions into the system you know that increases that generally would have an increase but the same with the the the inverse is also true if we lose the number of active participants it can have a cost on the system and I'll let Jodie at Nick additional comments right and click click gave you kind of the numbers of how much employee contributions and as he pointed out only about half of what has to be paid out is covered by employer and employee contributions coming in which is okay because it's a mature system but if you be dramatic say half of the half of the Current active members were not there so that those contributions were not there then all of a sudden he's in a much the much tougher place because the if in fact people go away retired people don't go away they're gonna keep live in an old teachers never die they just keep drawing benefits it but so it's it's It is a significant thing And I think clients last next July slide kind of gives you that in the in the long run is Red and blue you know the the thing is you don't want to be in a spot where you're depending on your investment income to pay benefits you want to be dependent on more than just investment income. All right. The next representative Maddox you're recognized thank you Mr. So I appreciate this lot about the returns and I apologize this is for the other systems if it's already in here can I get that I'd like to see that information for annual performance for all the systems and kind of compared to the market if someone can get that to us or to me I'd really like to see that appreciate this but and may already be in here but I'd like to sit in a in a little more clear wife if you get that thank you. Right and Senator Tucker you're recognized. Thank you Mr. I understand this is probably difficult question answer. Because for example my mother in law was a teacher for seventeen years now she's been and Administration for more than twenty. Since she's been into roles but my question is whether you all can and if you can weather you have. Devided the average benefit up by position I see that the total average benefit per month is about two thousand dollars my question is can you have it or do you have it where the average benefit for administrator is axing for teachers wine for custodian is Z. and so on and so forth. Yes center certainly we can we can break that out further for you I'll be glad to do that Yes the actuaries actually do break out those three populations when they're doing their analysis so yeah we can do that that be great thank you very much. With the information that the representative Maddox requested if you'll get that too Blake then he'll circulated to everyone. I'm sorry it is the answer. Yes any information just go through Blake so that we all get. Any other questions. Okay. Thank you guys so much for Your presentation looking forward to working with you you know do a great job per se what you do and I know to be a good. Good session with you guys so couple things reminder Friday final day to file bills I don't know if he's still in here take lead still in here. UP areas I want you guys knows retirement committee members we get asked to questions about benefits because it's retired people this guy did an incredible job. Well being answered question after question with people that called me as chair of retirement he has taken another position but he was an incredible asset for the I understand that right now Lauren Ballard is filling in so large if you want to step over or we can see you so but I just want to say a special thank you to you Jake for everything that you did to help during a very difficult transition. Lahren watch out the. Your your the new target so but thank you both for being here. glad to have a my former fellow Rep Ken Bragg here with the governor's office thank you for your presence today nessie secretary Walter is already headed out but glad to have you guys is there any are there any other comments for the go to committee. All right not we are adjourned. Sorry.