 this afternoon's agenda. And I think we talked about three different things. We talked about a common understanding of where we are and what the issues are. And guiding principles. And we talked about kind of guiding principles of two different things. One of the process that the committee uses itself and one guiding principles of the, what we want our pension plan to look like is that my understanding of where we were, we said we would talk about those three things. So before we start, I'm going to take a leap here and talk a little bit about what I believe are the guiding principles of this task force are. And because I'm hoping that we don't have to spend a lot of time on that because the other two are going to be pretty time consuming. And so what I just, I wonder what meeting this morning I was thinking about this. So we have 13 equal people here representing different constituencies. We each have very different constituencies and we need to represent them in addition to being 13 independent people who can think about the issues. And we need to be open to each other when we're listening. And all perspectives have to be respected. And there is no we, they here or us, them. We are 13 people that have to come up with some solutions here. And if we think about us as a we and they situation we won't get any place. We need to put behind us our preconceived notions. And there are probably a few things that we could all agree on if we really looked at that and that is not changing benefits to current retirees and not changing benefits to people within a certain period of retirement. We haven't decided what that period is but people who are close to retirement. So I think that we might all agree on that. But other than that, and I'm gonna go out on a limb here and I know that probably everybody is gonna be angry at me about this one. But other than that, everything is negotiable. Everything is on the table. And if we are starting from a point of saying, this is a non-starter for me, I'm not gonna go anyplace. I'm not gonna negotiate on this one. If we can't do this, we're done. If we start from that position, any of us, then we might as well just quit because then we're going to have somebody who this is a non-starter for them and the opposite is a non-starter for somebody else and we're gonna end up at loggerheads. So other than those two things, I think that everything is on the table and if we have positions that seem to be non-starters or I guess that's the term I wanna use, isn't it that we're saying, I won't go anywhere if we don't do this or I won't go anywhere if we do do this. If we're at that point, then we need to get those out on the table that everybody can throw those non-starters out on the table so that we can deal with them because so that's just my, I just do not want us to get caught up in thinking that I'm stuck on this position and that's where I'm gonna stay on this one issue. We can't do that. So if any of us have those, I would encourage us to not necessarily right now, but to get them out and to try and figure out with our constituencies, what those, why that seems to be a non-starter. Does that make any sense at all, Madam Co-Chair? I'm understanding what you're saying. Anybody else think I'm a little crazy here or over the top? And then I have one about what you said, which is that sometimes something that feels like a non-starter or a non-negotiable, that there's a reason behind that that might be worthy. Is that your point? Like if we get those out on the table, then we can get to the reason behind it and work with that. If people do have those issues that they say are completely non-negotiable, then there has to be a reason for having that because somebody else is gonna have the opposite non-negotiable position and we're gonna end up at loggerheads. We're not gonna solve it. So, I mean, I can think of the one issue here that I've heard from many sources is revenue stream. Nothing's gonna happen unless we can have a new revenue stream. Well, and then on the other hand, nothing's gonna happen if we do develop a new revenue stream. Well, if that's where we are, then let's just go home because we've gotta be able to solve that. So, I guess that just keeping in mind what our non-negotiables are and why we are there and if it comes to the point where we are at that point, at that issue, and then we have to talk about it, but I don't want necessarily to take time right now to get them on the table, but I do think that this is a really tough issue and we heard this morning that whatever we do is gonna impact not only this, but it's gonna impact everything in the state. So, we need to be open to everything. I think it's a really important conversation to have, but to hear the part of getting everything out on the table and that it's not a bunch of just non-negotiables to start and we're gonna be really, need to be creative throughout this process. And one of the things I've heard mentioned a couple of times is, well, whatever we put out in a proposal for changes or the legislature might not go for that come next January or Phil Scott might not go for that, which I hope that's not where our mind is solely there because with Act 75, it's not our duty to put out or what's the legislature actually gonna take action on or will Phil Scott actually be okay with our duty is to make sure that we are putting out something that we can all stand behind and agree and see value and then really think about our values. Yeah, and I think that that's where it comes, where our working with our constituencies comes in. I'm gonna have to work, Cory and I are gonna have to work with 28 other senators to convince them that whatever we come up with is where we should be going. They're gonna have to work with a great deal of many more people and you're gonna have to work with your constituencies out there to say, this is the best proposal we have and the administration is gonna have to work with the administration. Right. So that, yeah. Yeah, and not us worrying about, well, are they gonna just pass it? If they decide not to take our recommendations and consideration, that's the choice that they're making and we're trying to present something that we all value and can speak to our constituencies about with conviction and really feel that we've come from this, looking at as a whole picture, not just numbers, but looking at the value and people and societal implications. And that being said, our constituency, that concern of being able to get it through the building is our constituency. Jeanette and I are here, we've talked to the pro tem to put out a solution that we don't think can get to the building because that's just, that becomes a waste of time too. So you have to look at it from that angle. You can write the white paper all you want, you gotta write something. It doesn't have to be perfect and it doesn't mean there's not gonna be adjustments as it works its way through the building, but it has to be something palatable enough at the leadership level that time is even taken next year to even work on the issue. Right, right. It has to have the support, the general support of our constituencies and if it doesn't have that general support, then from all of our constituencies. So, okay, well, I've said my piece. I just, I had to get that out. I didn't say that because I have heard, well, this is non-negotiable. This is non-negotiable and I'm not there. So, and I think it's important for us to put behind us our kind of preconceived notions about what's happened, what happened in the January and what happened in March and what happened last week. Go forward. I don't know what happened last week. Okay, so with that. Anyone else wanna comment on that? Yeah. All right, so before we can start working through some of the NU of changes that might help us reduce our unfunded liability in the two systems, we talked about the need to agree upon a statement of the problem. And so I emailed to you very early this morning and you've now got a paper copy in front of you and it's up on the committee landing page or the task force landing page. Just my work with Legislative Council to put words on the page that describe the problem. And so I'm gonna invite David Hall to come up and join us simply so he can be here hearing the questions that folks have, hear the suggestions that people have about the way this document is laid out. And I think you'll find it is factually accurate. It's been proofed by Legislative Council as well as Joint Fiscal. And I just offer this as a starting point for our collective statement of the issue. Thank you for putting that together because we're gonna start with something. Then with nothing. I didn't, for some reason get a copy. I got two copies of this other. There, thank you. And just, so every, I just think it's important to say this and maybe I've said it before about our Legislative Council and Joint Fiscal is that they work for the legislature. But in this case, David is working for this task force. He's not working for Sarah or me or John or Corey or Peter. He's working for this task force. And so we're very lucky and our Legislative Council people and our Joint Fiscal people are objective nonpartisans and they do their best to keep us on track. But I just needed to throw that out David is the Legislative Council person for this committee. This task force. Go ahead and share. Great. So I guess it would make sense for us to take this sort of one chunk at a time. I haven't really thought about any sort of method of presentation other than putting this out here for us to go through, either paragraph by paragraph or line by line and decide whether these statements are ones that we all agree on. I don't know the best way of doing it. I would think that maybe David could start kind of walking us through it. Does that make sense? Yeah. David, are you fine with that? Sure. Eric has a question. Oh, question before we start. I will say I had a little time to look through this this morning and I was a little confused with where it came from because at the last meeting, I remember we had discussion about really talking with each other about using sticky notes and so forth to really get into how, where we felt, what formed that problem statement. So to see it already formed today in my email, I just, I thought we skipped over that process. So that was my first impression. I will say that that is probably, that probably did, I mean, we did skip over that process, but having chaired a number of committees that it's almost always easier to start with something and then to start with nothing and to have 13 people putting ideas out and then starting to wordsmith those ideas and stuff. So I actually appreciate the fact that Sarah put, Sarah and David put something on paper for us to look at. And if we don't like it, we can throw it out. But if we think that parts of it makes sense, then there's, because- Jeanette, it's not about not liking it because this is awesome, right? But it's just the collaborative approach, that's all. Well, sometimes chairs have to take the responsibility for making sure that we keep moving. And I appreciate that, but I believe that we would have spent a lot of time going through everything and trying to come up with ideas than, and maybe that's the wrong approach, but as having chaired committees for quite some time, I guess I'll take responsibility for this decision, spending two or three task force meetings in order to formulate a statement of the problem when what we need to be getting to is a solution and the statement of the problem, I think is largely based on simply the history and the facts and we can make sure that these statements accurately reflect everyone's understanding of how we got where we are. But I don't wanna waste time on talking about the past and just the statement of the problem. We have a tremendous amount of work ahead of us in talking about how we solve this and what is the right combination of changes that we might consider in order to solve the problem. And so that's why I wanted to take the initiative of setting a simple factual problem statement in front of this group as a starting point so that hopefully we can move on to talking about solutions which is really what our charge is. And I'll just add this is a complicated document. I mean, there's a lot of numbers in it that you can't just pull out a thin air. You have to work with legislative council and general fiscal office to make sure the numbers are accurate. And I think this would be very difficult to do from blank piece of paper. I mean, it's very similar as Chenette said to the committee process. Typically our chair puts together a committee bill which then is reviewed by the committee and can change dramatically. So I mean, it is an operating procedure of a legislature. It is nice to have something to work from. I think if it's just, we left the last meeting not with the understanding that something was gonna be put together and without collaboration. And I feel like that's what we're talking about a lot. Starting off the last meeting was the goal of collaboration together. So yeah, moving forward, it's important to have things to work from but maybe we can figure out a way to combine heads together in between our slated sessions not that we always have time, but as a consideration. Yeah, and I don't quite know how we do that. And because if we're, does it mean that all 13 of us are going to have to talk with each other about doing, and I did much the same thing with this other piece that was just handed out. We talked last time about putting together. I told us about that. You said you would remember that was at towards the end of the meeting. Well, I said I would try and put something together. Yeah, but I, so I think that we need to, we need to have collaboration, but we need to also be efficient with our time. And so we can collaborate on this, but I don't. My own product will still be collaboration. Yeah, the final product will be, this is a statement of the, of where we are. And I just, we're going to take some time to read through this right now. That's what I would have this suggested David start walking us through and see where we are. And I don't know how you do this in my committee. The way we do this is we look at the first and we say, are there issues with this? Do we agree with this? If we don't agree with this, let's change it. If we agree with it, let's just put a yes beside it and never talk about it again. So that we don't have to keep going back and back and back. So like some of these points down here, does that make sense? I think it makes sense, you know, especially when you get into some of the details about the plan, the problem statement, we are coming to this as 13 different people with 13 different perspectives. I wouldn't assume throwing out all of our ideas for what the problem is would be a waste of time. It might actually be productive to coalescing around what our charge is here. It may be a move point, if maybe we're going to do that now anyways. I don't know, I was just, between the last meeting, I was thinking about questions to put on the table as to do we think this is the problem? Do we think this is the problem? And then it seemed like it was already there. A starting point is there. And I think you'll find that there's plenty of space here where you can add your questions or your, whatever you desire to be an expression of the problem. This is just a starting point. So I missed what you said, Corey. I mean, it's a pretty bland statement, but it's good. I thought it was brilliant. It is, but it doesn't assign blame anywhere. It says exactly where we are. See, that's a great point because I have very different feelings about that statement. So I think it's great that we have room for this discussion. So on the very first paragraph. Yes. And can I actually say one last thing because I think it might be part of just contextually we're dealing with cultural differences right here. We are all in different industries. And so this document comes out of the culture of let the legislative process. The culture of an educational institution is very different. The culture of a bank is very different. The culture of any state organization may be very different. So if things feel kind of like to me, I'm like, oh, okay, this is a different culture because I'm just really used to stickies on posters. Like you were talking about last time. It's just, it's cultural. And yeah, let's talk about that first paragraph, shall we? All right. So Eric, you said that you had some differences with the first paragraph. Yeah, well, so my overarching comment would be, I think this is addressed towards only the fiscal piece whereas we heard from DHR last meeting about some of the turnover and our retention and recruitment issues we're having. I think our charge here is where it gets really difficult is considering that fiscal piece in the context of a workforce that is going to meet your other objectives. It's great to have money for spending priorities, but then you also need people to implement that spending. And we need to make sure that recruitment retaining employees is part of our charge in Act 175. I think it has to be part of the central work of the committee. I actually agree with that, but I'm not sure how that affects the statement of the issue that we're facing. In that the plan also needs to be adequate to retain employees and approve them. So perhaps what would be helpful is if we start with the principles. That's just the last page. I was thinking that earlier, yeah. That's a good idea. So page number seven is simply an attempt to lay out some of the principles that we might agree upon in terms of the priorities of any changes that we recommend. And you find recruitment and retention as the first on the list. So shall we start with page seven and then go back to page one? Does that make sense? That's for me. Yeah. And for each of the principles, can we look in Act 75 to see where they tie to our charges? I'm not sure. In what way do you... Just making sure that we don't miss anything on our Act 75 charges that might be even more important. Yeah, like recruitment and retention principle is connected to Act 75. I haven't had a chance to... Yeah, on here. Item J, page 449. What? Item J. Oh, the retention, yeah. All of the things are also on this sheet. I pulled them all out. I think I did. So does the task force want to spend some time cross-checking the principles with the duties of the task force or can we start in on recruitment and retention as a first statement of principle? Maybe. So a lot of times, you know, we do, and I haven't been on how the pleasure would be on many of your standing committees and legislature, but sometimes it's helpful just to do a walk-through and everyone can kind of mark what they want and we just see what's in the document and then, you know, people can just check where they might have an issue and then they can come back to the discussion. That's my question, but like, I know it's like, you're just looking at the first page, some of the issues Eric's talking about and the principles. Right, yeah. So let's go through the principles if that's okay with everyone and see if we agree that these capture the principles that we would like to express as our values, as we move forward considering changes. And then we can go back to the beginning of the talk. So, David Hall, thank you for being with us today. And thank you for your good work in helping to put these words on the page. Can you just walk us through this? Absolutely. Thank you. Thank you. Thank you. Thank you. Thank you. Be happy to let me introduce myself because I've mostly been lurking in the corner for a few meetings and you might not have any idea who I am or why I'm here. My name is David Hall. I'm an attorney with legislative council, which means I have 180 clients, 180 buses, most of the time who all want to do something a little bit different. And part of my job is help them figure out what they want to do and how they want to get there. And I have a lot of people that I don't know. I don't know. So whether it's a bill or an amendment, and then the next person comes to me and I help them figure out how to kill it. That's why I get paid. The chair said Senator White, I am an objective nonpartisan council. To all clients, all members, all parties, all committees, all people. I don't have a dog in the fight. I have a dog right in the back of my head, but I don't know what I would do or what I would do or don't do. I get paid either way. And what I've learned in my 13 years in this job is that by and large, People are in this building because they want to do what they think is best for a month. And that's what helps me come to work every day and feel good about it and go home with a good conscience. So I'm here to help you in that same capacity. I worked with. the Troopers Association said earlier, I don't math. I went to law school, not to graduate school for calculus. I haven't had math since 11th grade, to be honest with you, and I can add and subtract, but that's about the extent of it. So my job is to do the words, is to do the numbers. But one of the things that I do, I think what people in my office do is work sort of as a translator. There's English and there's legislative English and there's normal people English. And I try to help people understand each other who are speaking those different languages. So, and I was a German major in college, so that's how far from math I am. So I'm here to help. And I'll take you through this page, page seven. It is a starting point. I think it is accurate to say that it's easier to react to things than to try to come up and haul cloth. And I have learned that the hard way is I always have to start with a blank page. So there are one, two, three, four, five, fundamental principles here. They're certainly not the only ones you would consider. I think there are others in the 2009 report. They did, those were hereditary. They were a little esoteric. I feel like they didn't have quite as much concrete schema to them that could help you know exactly what we mean when we say things about whether something is equitable, fair. What does that actually mean? And so I think it does well when you're talking about principles or intentions is to be clear about what it is that you want to achieve and accomplish and what values matter to you. So the first one is, I'm here because I am pinching for a colleague who's had a baby and I'm gonna be with you at least through October. One of the first meetings I heard was the words from DHR and it was striking to hear the value of these benefits, recruitment or retention. It's obviously in the Act 75 charge and it's something you've all talked about. So that's the first one on the page. The statement simply is the retirement benefits are among the most important components of total compensation, a public sector employees and an important tool for workforce recruitment and retention, particularly in a time when demographic and economic challenges are acute. It speaks for itself, I can move through the rest of them or we can come and come back or we can stop here and go one by one. What do you prefer? I want to. Just to go all the way through one time. So the second piece is this concept of commitment. So as an employer, the state should honor the commitments that is made to past, current and future public sector employees to provide a solid foundation for a secure retirement. I saw those words repeated a lot in different reports and different presentations, solid foundation for a secure retirement. I know that this concept of a pension being a promise, this concept of a commitment is critical to a lot of people. It doesn't say what exactly that means, it doesn't say by doing X, Y, Z and Z or costing at this and making that person pay for it. But just as a fundamental principle, as an employer, school systems, the state has a relationship to employees and part of that bargain is retirement. For sustainability, this speaks to the state's fiduciary responsibility to public sector employees and to other tax payers to ensure that the retirement plans remain solvent and responsive and managed. That line, employees and to other tax payers, really, I saw that in one of the reports I believe and it struck me that yes, public sector employees are also tax payers and then there are other tax payers and the state's duty for sustainability is not just to those individuals but also to the state as a collection of people who rely on government services, who rely on teachers, who rely on student services and for that to be around for the future generations it has to be sustainable and viable, right? The next one, affordability, similar vein, the state has a fiduciary responsibility to all tax payers to balance the cost of services provided with a burden of taxes and fees. The state also has a responsibility to continue providing critical services than the fiscal constraints posed by long-term needs. I work mostly in the House Commerce Committee and Senate Economic Development Committees every year they do a budget memo that goes back to the budget committees and takes the priorities that have been recommended from the governor's office and reviews the programs and usually rates them and says critical, good-to-do, important, needs work, that type of thing along the range and part of your charge, but part of the budget committee's charge, part of the House and Senate charge is carving up those dollars and saying these are the things we have to do, these are the things we'd really like to be able to do and these are the things we wish we could do but we can't afford to do and that's why you have to vote and I don't because that's a position that you have to defend and I do not, most of the time. But it's important, it's the most important work. The last one is the net economic and demographic impacts and we sort of came to this one at the very end but I was struck again in one section of one report where it said any levers that you pull or dials you turn, anything that you do, there are people whose economics and livelihoods and spending power, et cetera, will be affected and that's not just the individual level but it's within the system as well. So trying to capture that here, making changes to the pension systems and a failure to make any changes to the systems will impact the state and local economies. It will impact the spending power of current employees and of retirees. It will impact the financial position of the state, local governments and local school systems and it will likely impact the demographic profile of the state. So that's a lot of big picture concepts to understand and sort of be subject to refinement. Let me say the very last thing about the kind of work that I do for you and for my clients during the session is that I have zero pride of authorship, I'm not worried about any words or concepts, those are choices that you make and just here to facilitate that process. Thank you, David. So comments? Are we gonna go through as a second read and pick a part each one? Well, I think that if we have, here's the way I feel about this. If we have reservations about what it says or what it means, then we should go there but I don't think that we can ask 13 people wordsmith. I may be wrong here, but I think that if we start doing that, we will be all day on just the principles if we do that. So, but I think if there are issues with what it says and the general concept, that's where we need to have the conversation. Does that make sense? Yeah. Thank you. So, I mean, this is my own thinking, but as I think about the principles, not so much for the retirement system, but as we think about making changes to the retirement system, fairness and equity are sort of at the top of my mind. It's, what does that mean? I'm trying to think through just for myself, what does that mean? And I think trying to limit the impact on overweight earners, trying to limit the impact on people closer to retirement, how are you to find that five years, broader than five years, avoiding disproportionate impacts on particular groups of employees. You know, those are the things I've been thinking about for this process. And I don't know if they're as well-developed as they should be, but some kind of reflection, people share those values, some kind of reflection of that in these principles, I think would be important. We have our words in every now and then. If I could echo that, I had a similar comment in regards to equity. In terms, I was looking at the Act 175, and the task related to cross subsidization. And I thought a point on equity fairness, perhaps may, that could feel under that bullet point as well. Holly. Yeah. Oh, sorry. Sorry. Okay. I had a thought about the commitment bullet or maybe its own bullet. I know one of the things that I feel really committed to in my seat here is beyond just the foundation of a secure retirement, but I feel a commitment to the Vermonters having quality public service employees. And I know in the last meeting, there was a comment about how hard it is to employ anyone in any field today in today's world. And I just feel like we need to remember that we're talking about public service employees that really affect all members of society. And so, you know, we're talking about the whole state of Vermont. We're talking about all the kids in Vermont. We're talking about all the people who drive on all the roads in Vermont. All people who are kept safe by the troopers of Vermont. And that I think I'm going back to my very first week and that's the value of space for me. So I don't know if it belongs in the commitment bullet or if I'd recommend another bullet, but those are my thoughts right now. There are observations, things that seem, things that you would say differently, things that you would add to this document. I think clear and commit, I like what David did with commitment, but I also think it, just because you change how you make that commitment doesn't mean you're not keeping that commitment. You know, we make a commitment to protect property rights of Vermont. And we make a commitment to educate our kids and it doesn't mean over 300 years we haven't changed how we made those commitments. Just like we commit to solve foundation for secure retirement. It doesn't mean that we don't change how we get there and what that looks like necessarily. Yeah, and I think that that last sentence there to provide a solid foundation for a secure retirement says that we have a commitment to provide that. Right, but what I heard in the spring when I was a little more distance from this problem was you're changing the commitment you made to us. We're not, we're trying to protect the commitment we made to you. It just may look a little different how we pay for that commitment. Right, the commitment, the commitment is the retirement. And we, I think we all agree to that, but the word commitment doesn't mean that it doesn't change how that looks over time when things change. There are observations. I'm not sure where it fits in, but I think under affordability we're talking about the state, but I was also like us to consider the budgets of retirees and the values that they live with and allowing them to retire with dignity. I think we heard, I think it was, Treasurer Pierce was talking about going to a conference and one of the speakers was talking about how to apply for low income programs and whatever. That doesn't fit with, I don't know if it's an additional affordability principle, but I would like us to somehow be reflecting the affordability of life for our retirees who have committed 30 years to whatever system they're working. I think that could fit under what Mike was talking about, a fairness and equity. And it also is under affordability, but I think it's captured under some of the statements around net economic and demographic impacts. We want to make sure that any changes to the system have been evaluated as to their impact on current employees and retirees. So if we can find a way to. I don't know where I can stop, I'm getting to maybe, I don't know if it's a spending power, but the spending power and well-being for retirees. Eric, can you repeat that again, I couldn't hear that. So last bullet point captures the spending power of current employees and retirees. And I was suggesting maybe it's beyond spending power with the well-being. Other observations, how do folks feel about moving back to the statement of the issue? Rush folks gonna understand that this, maybe the first time that you've chewed on this, but I didn't wanna make sure that we. Come on, David to walk. So if folks are ready, we can go back to page one and David, if you could sort of describe to us, you need to read it to us, but I think if you describe it to us in general, we can go through it. Question first, just about process. So we all have just sort of given some different feedback. What are we gonna do with that next? Like are you guys gonna come back with a draft too? That's what I'm asking. David, is that your thought? Is that you'll take notes on this and come back with draft too? Absolutely. Okay, that's what. And that will not be next week because long before David was assigned to this task force, he made his summer plans and I wanna make sure he gets out of here so that he comes back refreshed. So we won't come back to this with an NCDs changes until the following week. Thank you. And then just for clarity, if there's ever a time where there's two competing phrases, a lot of times we'll do like a side by side. Okay. All right, from the top. Sure. So let me just comment on sort of how this is put together and then we can look at the words on the page, but the attempt at the very beginning and it's to try to just capture the basic most fundamental issue in plain English. I had to sum it up to my kids that say, we don't have enough money. Probably way bigger than that, more complicated. There's obviously nuance about what other values and factors are involved in this discussion and that is the whole of your work. But when I started to realize I was going to be coming on board with you all and needed to learn the last 25 years of pension history in about five days, which was hard. To wrap my head around all the math and all the numbers has been very, it's obviously challenging and I'm learning as I go, as you are, it's very fascinating. But at the end of the day, in the statement of the issue, it's just trying to capture in a sentence or two the crux of the problem, which is liabilities right now are bigger than assets. The background though is here because as I read through the 2009 report, it was eerie to have first heard your hearings on YouTube and then in person and go through Chris's presentation and next the Treasurer's presentation and then go back and read the 2009 report and it's like they wrote that then about this now but it was 12 years ago. This didn't, to me at least, just really a continuation of that problem. It's just accelerated and grown bigger. I don't know if you've all seen it that way and if you don't, we can certainly flip the switch and change the mindset, but the themes that you are wrestling with now, particularly with respect to the economic demographic factors, are all the same, just worse. That really takes you through sort of the page one and then the next couple of pages two and three, a lot of numbers, a lot of math, but just trying to distill down into a couple of paragraphs, what the state of affairs is, the magnitude of the unfunded liability, the cooperative status of the ADEC, how that looks now and how it looks compared to other spending in other parts of government, et cetera. And then starting on page four, you'll see causes of unsustainable liabilities. And frankly, this is just this and then the last piece on OPEB on page six, trying to give an unvarnished and objective. A laundry list of everything that got us where we are today. And we can look at the specific words on the page, but I think it's important to look at it coldly and stare at it and say, one, two, three, four and five. And here we are. Now what do we do about it? So going back to the top page one statement of the issue, Vermont State Employees Retirement System and the Vermont State Teachers Retirement System are on an unsustainable financial path. Either system has enough assets today to cover the projected cost of retirement benefits they must pay out in the future. And the size of the shortfall has grown significantly in recent years. Absent any changes, the cost of Vermont taxpayers of funding the systems will continue to grow each year. You might could have one more sentence there if you wanted to say, ultimately, something bad happens. I don't know what that is. I'm not sure if anybody knows what that is. The system fails. It becomes, it's no longer viable or insolvent. I don't know what kind of words you wanna use. I didn't know if you even want to. I don't wanna be a doomsdayer, but this doesn't end well, the path that we're on. So I don't know if you wanna say something like that or not. But that's the starting point for your discussion of the statement of the issue about that. How are we measuring unsustainable financial path? Is some of the questions I was gonna bring out was the problem of liabilities, is the problem of the ADEC. Certainly, liabilities have grown, but we're also on a path to pay off the unfunded liability by 2030. Unsustainable financial path, it does imply some sort of collapse when in fact, we're on a path to be fully funded by 2030. I think the unsustainable part of it is the growth in the size of the bill that comes to the legislature every year, particularly the tremendous growth over just the last couple of years. If the ADEC was growing at its 3%, nobody would be saying that things are unsustainable. Well, I mean, you have to look at the unfunded liabilities too and the funded ratios. I mean, if we were on a trajectory to pay this off, which way would the funding ratios be going? Well, no, when we set out on the amortization schedule, it was supposed to go down before. Well, and we're at a loss over. And many of the assumptions that we started with didn't bear out. So, I mean, I just think it's prudent that we're specific. So, if the ADEC rising, the ADEC rising unsustainable, that to me is pretty clear. Health care costs, the benefits, and there's a lot of unsustainability. I don't think we get any, I'm not sure it's helpful to indicate that the system is gonna collapse to our current workforce. We already managed to have really high returnments last year. We need to dig into what the exact problems are so we can solve them. Well, I think that's what we're trying to do here. And it says absent any changes. We're on an unsustainable path. So, in my mind, what this implies is that we need to make some changes. We don't know what those changes are yet because we aren't there. But absent any changes, this system is not gonna be sustainable. And we could, the way I understand this, and I think I understand this well, that the ADEC, it is gonna keep growing and we will pay it off by 2038, but at what cost to the rest of the revenues of the state and the rest of the programming in the state. We heard today from Steve the other pressures on the budget. And so we, if this was the only issue we were facing, that then maybe it isn't unsustainable, but it isn't the only issue we're facing. And if we don't make any changes, the impact on the rest of what we do is going to be, is gonna be dramatic and explosive. I think that's what we need to lay out there. Because unsustainable financial path, if we do make ADEC payments, it's not an unsustainable financial path. So it's, if the capacity to make those payments is coming at some sort of sacrifice, that's where the crux of the problem is. So I just think that's what we need to spell out. One of the things about the ADEC payments is as Chris pointed out or Steve pointed out there, they are recalculated every year. And they take into account some information that is backward looking, the biggest piece being, this is how the markets did. This is the performance of all the assets, the corpus of the fund and then that's measured against the assumed rate of return. And when we get a bill every year for the ADEC and then a supplemental bill that, and we have every year that I've been in house appropriations received a supplemental ADEC bill that said, we didn't make it meet assumptions. So if this is how much more money we need, it is very difficult to plan on any kind of a long-term basis because you never know what new bill is coming into. We have to pay in addition to the other bill and we always have that makes it so difficult to say, we're on a sustainable path, a path that we just pay the ADEC because it's not just the ADEC. And then you also have everything else that Steve said this morning. And oh, by the way, I don't think he talked about childcare. So there are a lot of competing interests in this building that for monitors need. And it's not just the pension. So, you know, the pension is extraordinarily important putting it on a sustainable path going forward is not if it were as simple as just paying the ADEC. I don't know that we would need to be here. I'm hearing the predictability of the ADECs also. It is. And you cannot, Chris, am I right? Can you predict the ADEC going forward? I could predict this future. I would be a very wealthy person, right? My favorite trick. Well, good thing you can't or we lose you. We could donate some of it. So if I may, I'm in response to that comment. If you'd entertain a comment from the peanut gallery, you know, I think Eric's point about the emeralization schedule is bright. I think the issue we find ourselves in though is that if you go back to the 2009 actuarial valuations and look at what the schedule of predicted ADEC payments will be for the outcome of liability until 2038 and compare that to what it looks like today, it is increased by orders of magnitude over the years. And it's because the hole has gotten deeper over time because the liabilities have grown faster than the assets have grown. So we now find ourselves in a position where the hole is much deeper at year 13 or 14 of the emeralization schedule than we ever thought it would be earlier. And we have a much steeper climb between now and 2038 to dig out of that hole. So I think your point about, you know, we should not signalling that the system's gonna collapse. I agree, I would never say that. I think the real issue isn't that the system isn't going to actuarially, you know, what to calculate how to get to 100% the issue is can the state afford the payments that would be required to get there by then? I may, I just, I think the words, of course, again, don't care what words you use, but the sentiment, the concept underlying unsustainable simply rooted in the, you know, the trajectory of growth costs relative to income, right? So everything is costing more at a faster rate than our revenue growth. While that, if you wanna get super technical, it's not unsustainable as long as we just keep making the payments, whatever the payments are, I think you're right. It's not technically unsustainable. What's not sustainable though, is the state being able to make incrementally more payments each year to where you get to page three, that third bullet. I've had final years, one-time ADEC payment projected to be $500 million. I mean, I don't know how many people at this table with a straight face would say, no problem. We can make a $500 million payment for one year's worth of the ADEC liability. So I think that's why the term unsustainable was chosen, because at some point that annual duty of the state to make that payment doesn't work anymore. And what happens is something catastrophic. And here again, you don't have to say that in this document, but that's, from a legal perspective, that's when you get to the realm of one of the three factors of changing the system itself unilaterally is you have to do it to preserve the system. And that's not a place that anybody wants to get to. And that's how you get to bankruptcy though. Like bankruptcy, there's a plan to pay off all your debt if you could just make payments. But at the end of the day, you're choosing between eating and paying your payments. And that is gonna come a point where you still choose to eat before paying your payments. Like, and just from a personal financial perspective, the argument that, well, if you just make payments, you'll get out of debt. I can't make my payments. That's why there's this chapter 11 protection and there's these other protections out there. And if we wanna say that this system isn't unsustainable, like, and don't come to the solution, you come to the same conclusion a personal household would come to in time. And the other thing that Steve talked about as it pertains to out your growth of state revenues and coming back to the normal cost. If we've got a two to 2.5%, you talked to 2.5%, growth of state revenues in future years over the course of many years, his words, and we've got a growing cost of normal cost because the workforce receives a pay increase of three, three and a half. I think it's 4% this year if you look at steps. For the state workforce, we've got a gap there that we're not gonna be able to fill. We're needing to put in even more money than we would normally need to put in just to meet the normal costs. And that in and of itself will get to a point that is unsustainable if it's not already. So the concept of unsustainable financial path, maybe it's best kept broad because there's a lot of ways it could be unsustainable and very few ways it could be sustainable. I don't know if it would help or make people feel better if it were further modified to reflect. When we say that, we mean, within some rational distribution of resources or something along those lines, do you know what I mean? So it's not an absolute term. This is unsustainable, but it is not sustainable in the sense of what we can reasonably expect to accommodate within our budgetary parameters. That sort of sentiment. I don't know what the right words are, but. What I was hearing was the capacity to make that the ADEC payments does. That's a good word. I was hoping we would have this conversation and I just wanted to be precise about the language that we use. And I think that's gonna help us form recommendations down the line. That is a good, capacity, that is good. Other questions, comments about the first paragraph. I'd like to see us revisit what Eric was saying before about this, reflecting something to do with the workforce. When I think about what the problem is and what we're here to discuss, it seems to me that we're talking about balancing the cost of a retirement system with the recruitment and retention of a strong dedicated workforce. And if you don't have workforce as part of the problem statement, I don't know that we really have consensus as to understanding the problem to begin with. I had written the same thing and I thank you for putting words to it because I was struggling to find words. But next to the statement of issue, I'm still not feeling the peace that's in that first principle in the back. And I guess I feel like having public service workers available to us is choosing to eat. Like imagine the state in a situation where we really aren't able to hire more corrections facility officers. We really aren't able to hire troopers. We really aren't able to hire teachers. Like just imagine that, that feels pretty dire too. And it feels like an important part of that statement of issue because it's the balance of those two that we have to find. Thoughts on where you would insert what words? I have a suggestion. How about we start the statement of the issue with something like this. The state of Vermont values the work and services provided by its public teachers and state employees and is committed to providing secure and equitable retirement benefits. And then you lead into the next sentence or the sentence is currently there. And at the end of that current first sentence you had something that says are on an unsustainable financial path which will jeopardize the state's ability to fund all other services provided to runners. Including paying the salary of public employees. I guess to the point of the first part of the statement is that we actually value the work as provided by all of the public employees. And we want them to have a secure and equitable retirement benefit. Can you write that down? Yeah. Okay. Thanks for having me. I can do it with words. Does everybody feel comfortable with beginning with a completely different sentiment? Okay. It would be good to see it that way in the next draft and make sure at that point if that sounds great. Yep. A great improvement, thank you. Other thoughts, questions, observations? Eric. Just another thought on how we might bring that workforce part in is you could include something into the first sentence that says systems essentially have their challenges. Why would we word that? Yet are necessary to provide services for promoters. It kind of brings in that dual, the balance here between making sure they're fiscally sound and making sure they're sound to bring talent. Do you have a clarifying question about that? I don't think I quite caught it. I'm sorry, if you could say it again, where and what you would put. So understanding that the first sentence is probably going to be modified in some way. Where the period is. And this is just one way to do it. I would say comma, yet are vital for the provision of public services or something like that. Eric, are you at the end of the first sentence in the statement of issue section or the first sentence? That's what I thought. Okay, not in the background section. Yeah, yeah, no, statement of issue. That's what I thought. Okay, thanks. That's an idea of keeping that dual challenge. All right, let's flag that and we can take a look at what the next draft is like when we see it and see if it's, if we want to do some further. You ready to move to background? Before I forget, on page two, the second full paragraph, it's a while, sir, in federal. That should have a heading before it says, school of the problem. Otherwise, it just all runs together. I'm not sure what happens. Dog ate it. I have two dogs and either could have eaten it, but this was a word, this was a Microsoft. So the background piece that briefly mentioned before really just is wow, cheating 100 plus pages of 2009 into a few bullet points. But again, the point to be made here is the continuity from the issues that the systems and that group were facing at the time and where you find yourselves now. So in 2009, after math of the great recession, state established this commission on the design, funding and retirement retiree health benefit plans for state employees and teachers. And the words they use to address the affordability and long-term sustainability of the pension and retirement health care plan serving state employees and teachers. And again, their words, the implosion of financial markets in 2008 and a first quarter of 2009 severely impacted the value plan assets. It contributed that year to a large increase in the required employer contribution. The commission also identified the economic and demographic trends predating the great recession. It already set the retirement systems on an unsustainable financial trajectory. And so those trends they observed are in the bullets. Financial commitments for retirement benefits including health care growing much faster than the rate of revenue growth. Annual increases in the required actuarial pension contribution is a percentage of total general fund revenues. You'll see these figures I put in here parenthetically are from the report. You don't have to have them. They're just number of examples of the concepts. So your choice whether you think that's helpful or not. Third bullet, annual increases in the actuarially determined employer contribution for the annual increases in the amount of the unfunded liability which back in 2008 was a 0.87 million dollars. An aging workforce, a baby boomer retirement bubble and longer life expectancies that resulted in a rate of growth in retirees out facing the rate of growth active members. Annual increases in the amount of pension benefit payouts. Annual increases in the cost for retiree health benefits. And an assumed rate of return of 8.25% that exceeded the actual rate of return that was higher than the rate used by a majority of other plans. Failure of the state to fully fund the actuarially determined employer contribution preceding the Great Recession and funding of BSTRS retiree health benefits from pension assets rather than some other dedicated source resulting in an actuarial loss to the plan. The 2009 commission made several recommendations to place the retirement systems on a sustainable path some of which were ultimately adopted. However, the demographic and economic factors the commission identified in its report have only been exacerbated since that time and the financial struggles of the retirement systems have only accelerated. So again, each of these bullets are things that the 2009 report observes and noted in its results, which obviously preceded its recommendations at the time or what to do about it. Questions, observations, comments, suggestions. If you have language that's lifted directly out of that report, would you mind just putting quotes around it just to, because I heard you say that twice and- Oh, I just meant things like the word implosion. I thought the whole paragraph before. No, no, that's a paraphrase. Okay. Things like aftermath of the Great Recession. Okay, okay, just a little bit of a way. If it wasn't, I apologize, I mean to say, it suggests it was directly taken verbatim from the resistor in the button. Just a clarity point, David, on that second to the, oh, one, two, three, four, five. It's a fifth bullet down on the first page and that's the parenthetical. So it's 2,800 more retired teachers and state employees 2009 versus 2003. Maybe that's clicking with other people, but I'm just, I'm having, I guess the comparisons, having trouble. If the comparisons teachers, the state employees or the timeframe comparison. Yeah, I think it's, I mean, we can, I can try to clarify that. It's 2009, 2003, 2009, the number of one was up by 2,800 compared to the other six years later. That's that many more retirees as compared to active employees 2009. Let me just look back at the report and double check the way they phrased it. I found it. That's confusing. I found it, it's, there are 2,800 more retired teachers and state employees this year than there were in 2003. Okay, that makes sense. That makes sense. Yeah. Good catch. Oh, it's an easy clarification. Like real time fact checking, it's great. I think some changes were made in 2010 and again in 2014 to the, to at least Vester. So I don't know about the other retirement plan. I wonder if some of that should be reflected in the background, because deals were made, changes were made to the retirement plans. Yes. And it's also my understanding that one of your earlier meetings, I think you had done a good job of talking about which one of the recommendations was adopted in which month or not. I gotta tell you this is a function of time, which time I've had on this. So I don't know how much of a history you guys want. The document that was available to me was the 2009 report. Anything that happened, I can certainly work on that, but it will take me time to dig through the legislative history record, figure out what exactly happened. So it's not part of any of that. Chris, are you able to help characterize the changes that have been made since? Sure, so that one specifically, and I think we should probably go back through all the statutes just to make sure we don't miss any, but I think what I'm keeping referring to was they created a plan for more student-to-teachers after that that had a different opportunity for more for more environmental eligibility. So some changes were made to the benefit structure around that, despite those changes, so the whole has gotten deeper in the sense. But we can do all, we can go through the statutes and just pull this together. Thank you. Other questions, comments, suggestions? And as far as the structure of this document and what you wanted to be and who your audience is, I included this part of the background just because again, those trends struck me as being obviously very consistent with exactly the problems you're talking about now. And certainly there have been changes in the intervening period, but if you feel like this background is not really necessary for this document, that's another option. It's hard, at some point you're gonna have to talk, as you were just talking about, you're gonna have constituencies. And I know from my work, my clients don't always have time to read a seven-page document. And that doesn't sound like a lot, but when they have a seven-page document every hearing all day, four or five days a week, that's a lot. So if this needs to be less, it can be less. And if it wants to be more, it can be more. Yeah, I think. I was gonna say maybe that could, because we're gonna have to do a report at the end. And a lot of this stuff will go into a report, but we need to think of who the audience is that we would be trying to make sure that there's a common understanding of the problem. And I think that those audiences might not need as much background information as just understanding of where we are. Now I may be wrong, but we may have different documents for different notices. Yeah, and I can see your point on that. But, and I can also see the value of understanding the echoes of where we are now to where we were then. And I would hope that we would all think of that as a cautionary tale, that if we're gonna go through this really hard process, let's try to make sure that we find a path to sustainability and not doom somebody 10 years from now to come back and do this same thing. The other thing that I just wanna say before Peter's got his hand up is let's not rearrange all the deck chairs if we're gonna just sink the Titanic, right? Let's not ask David to rework the way he's saying things if it's the consensus of the group that we just wanna ditch certain parts of it. But, and so I'm not gonna presuppose that we all have the same thought on how much of this is essential, but I find it to be fascinating and important, but. And so for people who wanna know more information, they'll read it, for people who don't, they'll just watch it, give it a grab. Where's the executive summary? Yeah, that's the most serious executive summary, right? There you go, Peter. I like this in there. And the reason being to be succinct, it helps drive home the point that failing to act is acting to fail. And that's exactly what happened. Crazy. I'm not sure I understand that point, Peter. I think at the time when the changes were agreed upon in 2010 and 2014, at least to Vistors, the idea was if we make these changes, then we'll get back on the right course. And the changes were made and we're not on a good course. So. So that was some of the ideas that were raised So that was some of the ideas that were in this report. Nowhere near the majority of the ideas, some of the ideas. So if you look at it from that context, they failed that. So can that be added though, instead of saying some changes were made, what changes were made? What sacrifices were already implemented? That's what I'm, can that be added? Yeah. I'm sure Chris Rube could help to articulate a description of the changes that were ultimately enacted out of the 2009 report. I mean, we went through that in a previous. And they were in the field that ultimately did pass. Yes. As well as a financial analyst over the Treasury's office about the impact of those changes. Okay. I think one of the things, if we include it, it needs to be pretty comprehensive because like I'm imagining being a teacher who hasn't sat in on these meetings, who reads this background, I think that teacher might immediately say, wait a second, you didn't even mention that you didn't fund our pension from these years to these years. Do you know what I mean? And even though we've heard a lot today about how the ADEC has been adjusted, et cetera, along the way, those points are important to include or we're gonna get backlash. Yeah. And I think I could imagine in the final report, putting in the charts that show the percent ADEC that was funded, because we've seen those, we've gotten those from Chris already. And yes, it will show that there was underfunding at 80% of the ADEC or 90 or 94, but then it'll also show that we've been up to 137% of the ADEC. Which could also be in there. But I don't think we wanna necessarily, like nobody's ever gonna get through it if we put every single detail in word form, but perhaps ultimately when we come to a final report, a footnote here that refers to the chart that the appendix of our report would help orient people. Chris? Michael just graciously pointed out that on the Treasurer's presentation last week, if you go to page 45, there is a list of some of the more recent changes just sort of at a high level. That have happened since the amortization period, but we'll put our heads together and take a look at the statutes of the civil language. Other questions, observations, thoughts or are we ready to move on to scope of the problem? Eddie? All right, so I think I forgot to mention at the top. In case you haven't figured out by now, I'm not the world's expert on pensions, I'm not the world's expert on anything. My normal portfolio is commerce, economic development, consumer protection and housing. So if you had any gritty questions about those types of things, it could probably be a lot more helpful to you, but I'm right here with you on the pension stuff and this is kind of blowing my mind, but I'm really enjoying the work. I hope you are too. I say it here because these next few paragraphs, the scope of the problem is, I guess, try and to say in about three or four paragraphs exactly what we're talking about and what those numbers look like. So that's the concept of the normal cost, the unfunded liability, the ADEC and what those numbers actually mean today, right? So this is the paragraph, again, that starts while certain federal and local sources contribute funding to the retirement plans. Because remember, it's kind of, we always say employer contribution, but remember there's a small piece that comes from some federal money and there's some money that comes from local sources. So it's not just the state as employer when we're talking about an ADEC and an employer contribution. So we have to acknowledge that while there's a little bit of money from some of these other places, the state does bear most of the employer responsibility to pay the normal costs of annually funding the operation of the retirement plans. And that is just the cost every year to normally keep the thing going, doesn't count the unfunded liability, we'll get to that. So active participants distributed among various groups within each plan also pay employee contributions at a fixed rate set in statute. And these contributions fund a portion of the normal cost. Employee contributions, however, have not grown at the rate the normal costs have grown. And as a result, employee contributions now pay approximately half of the total aggregate normal costs across all employee groups. So in addition to the normal costs, each system has an unfunded liability. And this is a gap between the costs of future benefits and the assets that are available to pay for them. Unfunded liability arises from prior years of underperformance relative to assumptions and also reflects increased costs from changes to assumptions. So the unfunded liability is amortized with interest over a closed 30 year amortization period that ends in 2038. So the payoff schedule is fixed in statute, the amount of the unfunded liability changes annually based on the performance of the pension funds and continues to escalate with increases future projected costs relative to assets. Despite the employer fully funding the actuarially required amounts that should probably say since 2007. The unfunded liability for each system has grown significantly since the 2009 commission report. So the visa service unfunded liability has increased from $87 million at the end of FY08 to over a billion dollars at the end of FY20. The visa service unfunded liability has increased from 379.5 million at the end of FY08 to 1.93 billion at the end of FY20, top of three. So the amount that the employer must annually contribute to fully fund the normal cost of the plan and to pay down this unfunded liability which together comprise the ADEC or actuarially determined area lead determined employer contribution has also grown significantly and will ultimately exceed the state's capacity to pay for it. In FY2008 ADEC total approximately 82 million. By 2021, the ADEC screwed up approximately 205 million. So informed by the most recent experience studies and economic forecasts, economic and demographic assumptions for both systems were revised in 2020. These changes were intended to ensure that assumptions are met more consistently in future years. However, changes led to significant increases in the unfunded liabilities, normal costs and ADEC payments for both systems from FY21 to 22. So the visa is unfunded liability grew by 225 million and the ADEC by 36 million. The visa is unfunded liability grew by 378.8 million and ADEC by 64 million. If nothing changes and if all actuarial assumptions are met moving forward the ADEC payments will continue to grow and will exceed $500 million by FY38. So the last piece of this is that the increasing costs for retirement liabilities continues to consume an ever larger share of the general funds. So in FY19, the total employer contribution to retiree pensions and OPEV was 167.8 million or 10.5% of the general fund. For FY22, total contribution has increased to 249.5 million which is approximately 13.8% of the general fund and then just for context, FY22 ADEC far greater amount than what the state appropriates annually from the general fund for entire categories of government services, including general government, protection to persons of property, labor, natural resources, commerce and community development. That is the scope of the problem. And as I finish it up, it occurs to me that this duality we've been discussing is not reflected here either. And that is some of the demographic issues with forest recruitment or intention, et cetera. And I don't know if you want to dive into that in this section, if that's part of what goes here or not, I'll leave that to you to discuss. I had one thought just about, not about that particular question but that last bullet where you gave the examples. I was thinking of this graph from this morning and wondering if it might just rather than that one specific example might be more appropriate to just show the context of that cost within this graph. Possibly, I don't know. I only saw that graph today, but I think. It just shows that that's one of the things. It shows how the money is spent by a function of the different parts of the short ending. And I just thought rather than selecting out a couple individual ones to show it in the whole context. I think that's another way to do it. I have to look at that and Chris having to convert it into English for me. But I think perhaps if this content ends up in the report we can have, I mean, in order to load up this graph, we can put my chart together and shoot it, and get it by 22. Okay. Back in the first section, just under where you said we needed a header so it's still the problem in other words that starts with certain federal and local sources. Regarding the employee contributions of the fixed rate set in statute, when they were set in statute, and I don't know when that was, what was the percentage of the normal cost put in by the employees and by the employer? If you could find that out, please. I don't know. The short answer is it will vary by year depending on how far back they were set, but they used to employee contributions used to cover a much, much more mature share of the normal cost as recently as, you know, the most recent changes and assumptions. Now they couple of them we have across all groups. Could we see a history question? Yeah, I'm not at the very same point. I was struggling with that as well. I have no doubt that sentence employer contributions, and I know that's true. I struggle with it in that we haven't really done that investigatory part of it. So I just have a hard time committing to language on it. Well, I know it's true. Sometimes I'd like to put finer points on some of that stuff, like from this percentage to this percentage. I see what you mean. Yeah, so I don't take any issue with the accuracy of it, but we might want to continue to flesh out the detail. Get some data on that. Yeah, exactly. Before we come back to a final draft of this, yeah, other questions, comments, observations, Molly? I had just a really quick one on that third paragraph under the scope. I think you added in since 2007. Yes. And isn't it fully funding the actual required amount or more, right? I mean, some of you have said as much as 130%. I think we should have that in. It's accurate. That seemed like I was arguing for the other side. There are times here. Remember, that's why Molly. That's why I said it. I was needling you. You're arguing for the facts. No sides. Yeah, no sides. I'm sorry. I was just having fun with you. Refreshing that we can all agree upon the truth. To our house. That's the sides. David, I know you have this later on, but in the second paragraph where it's second sentence, funded liability arises from underperformance against the assumptions. The underfunding is part of that too. So in the, you know, sake of completeness, we should include it as well. Observations, questions, suggestions. Just wondering about third page paragraph that forms by both recent experience studies. When it talks about how there were changes that led to significant increases in the unfunded liabilities, maybe we could lay out what some of those changes were. Is that including the reduction from seven? They assumed right a seven and a half to seven and just getting some of those specifics in there. Again, thank you for sharing all of this information, but keep up with who eventually are looking at this or not necessarily getting all of this. You like the treasurer's report had that in turn, right? We can find that there, right? What some of those actually really assumptions to be the actual real assumptions were. And possibly on page two, the second paragraph again, where it talks of second sentence, the unfunded liability arises from prior years under performance relative to assumptions and also reflects increased costs from changes to assumptions. Are there more details we can add in there? Is that also linking to the idea that, you know, salaries didn't grow, which was a savings. However, people are working or people are living longer, I know some of you. Yeah, so I do want to, we're gonna go on to the next piece about the causes of unsustainable liabilities. And that's where there's more detail. So remember for, I mean, you guys can make this as detailed as you want, but the function of this piece again, it's just sort of like the 10,000 foot. We have these four components and the trajectory is this. Okay, why? That's some of the more of the details starting on page four. And in fact, on five to your point, I wanted to make a suggestion to try to get some more information that I could beef that up, which I think goes to what your, both your page two and your page three question. So don't let me forget that. I won't forget, we're going there right now. Dave, you guys are ready to go on. I'm wondering if maybe we shouldn't go on because we're approaching four o'clock and we've committed to creating an agenda for next time. And we only have about 23 minutes left. I'm wondering where we sit with all of that. We know that people have commitments at four o'clock and want to make sure that we know what we're doing next time before we leave the step. Stopping there, David, will you have the points you said remind you on page five? Sure, I'll just very quickly tell you what I'm talking about with that being mystical. There's a great slide in the treasurer's presentation. It's actually two showing it's one for each system. And it actually gives you the dollar breakdown of what categorically increased the unfunded liability by how much. But within that, you know, it's like $90 million other gains. So as I was trying to write this, I realized I don't have access to the same information that they do. But at some point I could put that, these are sort of the categories, some of them, not all of them. But if I can, you know, bug Chris or Michael to dig in a little more, I can put with each of these bullets, put those work, you know what I mean? What, which changes did, and can we even pinpoint like which changes account for how much of that growth? And then, and then when we say categorically other, what, what do we mean by that? It could be the two detailed, I just don't know. But we have all that information, matter of fact. So it's like a file on my share drive, I have every year 2009 to 2020 what has contributed to the unfunded liability. So whenever it comes time to put a report together, it'll be sluggy graphic yet really easily. But the treasure and the sort of highlights and some of them all up in the groupings like that over a period of years to give you the flavor. It's the numbers do vary from year to year. So thank you, David for your work at condensing a very complex and technical subject into a few pages. And you'll be relieved to know that we will need to ask Chris Rook to finish walking through this next time. So pass the baton to Chris. And I hope that by the time you come back, we will have finished our suggested edits to this and be ready to move forward. So, thank you. Thank you. All right, so where are we? Well, there's two things that come to mind that we've already talked about wanting to do at the next meeting. One was to hear from Nasra regarding how our benefits and contributions compare to other states. And I think how it would be also helpful to understand how our liabilities compare to other states. And what they've done, what some of those other states or cities have done to solve some of their issues that are the same as some of our issues. So we had flag Nasra for next time. And then we also need to fit in time to finish going through pages four through six. Yes, the six is open. What else do we want to put on the agenda for next time? Well, neither David nor I will be here next time. We're running away together. Are you? I guess. I feel like it's right by the water. Oh my God. I think he told me that your air mattress doesn't hold air though. So you're going to be sleeping on the bare ground. Okay. No, I will not be here. All right. What else do folks want to see? Oh, looking at, oh, sorry. No, no, no. No, just looking at what you prepared, Jeanette. Question for you. Yeah, I think this is great. Thank you. It's just one that needs to be added. And we did that today, by the way. We're looking at permanent, well, some of today, examining permanent temporary revenues, streams to fund the Vermont state employees, retirement and teachers. That's just the one charging piece that was not there. So I'm using this as my reference as we go along. So thank you. So could we do that, the second charging? Is that something that can be, we can start looking at? You already have some of those pieces. Do you think Sarah? Can you ask that again? I'm not sure I understand what you're asking. Oh, some of the pieces of the five-year review benefit expenditures and all of that. Investors and their employee contributions. I think a lot of those things will happen as we start having options for changes. And then the actuarial has to be, that's my feeling on a lot of these things, which is why I didn't try to put the things underneath them because I think that a lot of those as I tried thought I tried to explain less that they won't, we won't have information or hearings on them until we start having some options. Two questions. Do we have natural booked already? Or do we need to book? We need to book. Okay. So it's possible they might not be available. So there's a possibility. Okay. So if they're not, if we could, do you know when we'll be reaching out to Nazra? Tomorrow. Okay. So if we could just get an update on if they're available, if they respond tomorrow. So that way, if they're not, then we can all be in collaboration with, figure out how we want to fill that agenda, time slot, or we can just suggest a third topic now. That's great. My second question, not related to agendas. Last time we put together the RFPs, have those been sent out? Yes. The RFP, I've been in contact with Michael Grady with respect to the legal expert RFP that's been sent out. The only thing that I need to follow up with him is if we want to send it to specific law firms or post it to places he didn't post, which is the typical state places to post RFPs. If there's like a, I think there's a law association of pensions attorneys and I need to find that. And then I do think we should send it to Ice Miller to the 2009 attorneys that worked on us. But so that's done. And I think we've sent the letter to the treasurer. So that's done. I have to send it to the treasurer. As we think about the next meeting, two possible suggestions. Here, you mentioned in the past some of the, how this is obligations fit into the growth of the state's economy. We got a good primer on that this morning, but I was thinking maybe after the e-board meets and new revenue projections come out, maybe the legislative economists could come in and talk through some of those projections. I don't know if Tom could come in or not. I mean, not been asked, certainly could. If you've ever sat through one of his presentations, they are lengthy. I would suggest that if folks are interested, you might start by watching tomorrow. Yeah, I do plan to do that. It'll be on the Joint Fiscal Committee's website because they need to present to the Joint Fiscal Committee tomorrow, so. And the other suggestion, so I mean, maybe we'll see how that plays out. Maybe someone else, not necessarily Tom DeVecche, I mean, the other suggestion was looking at the net economic benefits piece. We're gonna need some input from economists at some point and potentially public assets institute could be a good group to hear from. Paul Silio started sort of on the value of pensions to local economies and so forth. Might be a good perspective to see here. This has nothing to do with next week's agenda, but I think this was handed out. This is the workplace retirement plans for regular Vermonters. And it gives a lot of detail about who in Vermont has a pension plans and who doesn't and what they're all about. So I think this came from AARP. And I think the Labor Department had some statistics, but I can't. I couldn't find any on laborers, but I was able to find that from AARP. Just for our information. From 2015 or? Yes. They did. I was unable to find a more recent document. It's not that specific recommendation. We'll just have to give some thought to how we quantify that piece, because we'll need to sort of get a sense of how a dollar paid out flows through the economy. One of the things that I asked for from one of the folks at JFO was a little thing called physical facts. I have copies here, certainly for everyone who is not easily familiar with the JFO website, how to entertain and I got it as a tab in here. So I don't need a copy. Only got 10 copies anyway. So if you would like one, please, it does, it gives a lot of information that is up to date as of, I think it was February this year. So. Thank you. The person who does this is on my committee all the time and she's extraordinarily thorough. What do we have firmed up for our agenda for next time? Well, we have ATSRA potentially coming in and talking about benefits, contributions, liabilities and solutions that other states have worked on. And then we have been a walkthrough of the document we were working on today. And then I do have like, at least we could get an e-board update for next time. I think that sort of gets to Eric's request, whether that's Tom Cabet or somebody else. Let's get an update. And then I had Eric's again request on that economic benefit of pensions and possibly contacting the Public Assets Institute. That's what I have right now. So that sounds like a pretty full agenda. Yeah, well, you know, Nassar may fall off, but I'll definitely try to get him scheduled before the end of August. And if I might recommend, you know, we could either have Steve Kline or Catherine Benham come in and do the update. Yeah, from the e-board. He'll just charge us lots of money. And that's the other reason why I was going to. Not real quick to come back. So. So I just looked at our schedule and I think, I may be wrong here and I haven't mentioned this to anybody else, but I think that by the next thing after that, which I think is like the 18th or 15th or something of August 18th, right? We're not meeting the week of the, that next. Right. So the 18th board. I think we're going to have to start getting options on the table because if we, if we don't, we're not going to have any time to get actuarial information about them. So because if I look at this, that would give us five, five meetings to get any options on the table and have the information from them in order to prepare some kind, spend two weeks preparing some kind of an interim report. So I think that starting the 18th, we've got to say, we've got all the data that I mean, we could, we could become so inundated with, with data from everywhere that we just become paralyzed. So I think we have to start putting the option. And I think, I think given that timeline and given the fact that we have this gap in August, that maybe next week, it would be a good idea to have Chris just go through and review with us again what the, what the levers are that can be changed in broad scope and I think there's probably. So you could probably put together a document that just identifies all of various things that we could potentially do that impact the asset survivability of the pension. Yeah, nothing. Without actually going into say, change this or change that, but just. Just a menu. These are the categories, yeah, yeah. Just to make sure it's, it has everything that everybody's thought of. Maybe somebody else's thought of something else that we could do, but at least it would be a starting point to identify the levers that we have to work with. And can that, can that include things on the increased revenue side in addition to cutting those benefits? Cause that feels, yeah. And the other thing I was wondering earlier, since I'm talking, Jeanette, you had mentioned at the start of this, I think it was this half the piece about it, people have things that they feel like are not non-starters. I think we should revisit that question, give people like the homework, that's a different feature to really do some soul searching and think about whether there are places where you get an absolute no on the inside so that we can face those next time, like maybe we can start off early on with that discussion. Like, did anybody come up with some absolute non-starters for their constituent group? Yeah, and then somehow, I mean, in my world, there are no absolute non-starters except those two that we talked about just because if we do have them, it's gonna be really difficult. So we each have to look at what those non-starters are for us and why they are and what it, so I don't know if you know the Crock-Pot theory of... Sorry. Not Crock-Pot. I just wrote a heck of an article. Not Crock-Pot. Crock-Pot theory of conflict. So you have a conflict over something and this is in a divorce situation of a conflict over something and really they end up fighting about the Crock-Pot and nobody gives a damn about the Crock-Pot at all but that's what comes up. So I think we have to make sure that we're not arguing about Crock-Pots. If that makes any sense at all because we could get stuck there. I just have a question process-wise about writing reports. I've never been a part of a group like this putting out reports. If we could put some time on the agenda next week or the 18th, I believe about going through what does that process actually look like and entail, that would be helpful. We could probably tell you that right now in a way we do task force support. Yeah, I think we have time right now that would be- Generally, David and Chris will take all of the notes from all of the meetings and they'll put together a report and then it comes to us and we review the report and approve it and then it goes off to the legislature. Isn't that in a general sense? Yeah. So it looks very similar to what we did today. You'll go to the document and the third phrase is we'll highlight them and debate them. And did I hear you say earlier that we're trying to have two weeks to be able to go through that initial report from David and Chris? Well, wait, I think we're gonna have to have, it's gonna take at least one full day to go through it and then revisions or any changes or anything like that. So I mean, David's gonna be on vacation next week. So Chris can hopefully step in and just walk us through the rest of the document. Hope we have all the proposed changes. Then we can hand that back to David. But I think he's talking about the final report that goes to the legislature. And in October. In October, we have an interim report that's due and then we have some comments. Well, what we started working on today is the first six pages or pages of the interim report. Okay. Yeah. You know, beyond that is what we're building over the next couple of weeks, which is an understanding of some of the economic impacts and understanding of where we get in with other similarly sized retirement systems for the benefits and contributions and relative health. And then what we begin to work on for options to reduce the unfunded liability. And do we settle on a date that that's going out in October? I think it says the 15th, right? But I might have said right. I feel like it was here. That's 15. It is the 15th. And then it's December 2nd. That's the one I was thinking. Thank you. And then you were talking also about starting to put solutions on the table or possibilities. Are we gonna have any recalculation based on the fiscal year 21 numbers so that we don't overcorrect this problem? I don't think we can overcorrect this problem. We can't overcorrect. We could throw everything and the kitchen sink into this problem. And it wouldn't overcorrect as well. But in terms of the numbers, take out that last little part that I said in terms of having those numbers to base our. I don't think so. I really think that we're dealing with what we're dealing with. And if there are any corrections, major corrections that need to be made, that that'll probably happen in January when we have. Okay. I don't know. Yeah. So we have a meeting on the 13th of October when we need to finalize that report. Some of the treasurer said that she tried to give us a sneak peek. But that will definitely have it in our program. As far as what the plan looks like this year. It could be, that could be incorporated into the final. Into the final. Yeah. The actuaries provide the reports to the three time reports last week of October, early as most generally in my experience.