 Welcome back to kitchen benefit design and funding task force. We are embarking on our final agenda item of the day, which is a couple of documents that Chris group from the joint fiscal office has prepared for us to to help us understand, you know, where, where the different levers are that might change the unfunded liability trajectory on the benefit side. We've talked a little bit about putting in one time money we've talked a little bit about different concepts of revenue that that folks wanted to get more information on and and so this afternoon I'd like us to have a opportunity to talk a little bit about what some of those changes are and we had expressed last at our last meeting that we should have nothing that's off the table. And so I in keeping with that spirit also responsive to what we talked about earlier today, I'm hoping that we'll have a chance to to go through and talk about some of the potential levers. And instead of saying something's off the table maybe we say that would be on the bottom of my list as a resource and see if we can, if we have some time for for discussion to figure out what what we can see above moving forward and doing a little more exploration. So, Chris, thank you for being with us this afternoon. Thank you for the record Chris group joint fiscal office. Good afternoon everyone. I'm going to split this document your title pensions potential options and I want to underline and put in bold the word potential. You know my role here in JFO is not to advocate for one thing or another. My role is to make sure I'm explaining to everybody so they understand what it is how it works and what's one of the relative impact is from these different options so the actual analysis has occurred in months previous to this task force occurring, trying to get an understanding of, you know, of all the different factors that go into calculating pension benefits. If modifications were made to different ones to different levers, if you will, what does that mean and what is the relative fiscal impact of those changes so my goal here today is to walk through what some of those options are and what they can and provide some context. So, that's, that's it you know I know there's, there's by no means do an enmity and whether any of these options should or should not be pursued, but in order to have an informed conversation we want to make sure everybody's starting with sort of a common understanding of what these different factors are around benefit design, and what sort of moves the needle if you will more than others. So let's, I apologize that I made the rookie mistake in my haste to get these done of not putting slide numbers on my pages. So hopefully I can go through this and none of us get lost but feel free to jump with any questions or, or tell me if I'm saying something that just sounds crazy. So second page strategies to reduce the ADAC pressures and the funded ratio so just as a refresher for everybody, you know, the unfunded liability is really that gap between the assets and the liabilities between these two lines I'm not picking on the Vester system by only putting their chart here I just wanted to put one in to show an example there of what that gap is because I tend to be kind of a visual person and I like to visualize it that way. Whenever that gap between the lines gets bigger, you know, that means you need to pay more in the ADAC in order to close that gap. And in the conditional pension model, the ADAC payments fall on the employer, because employee contributions fund the normal cost, and the unfunded liability payment is included in the employer's ADAC. So in order to reduce that unfunded ability you, you know, you need to take some steps to kind of make these lines move closer together push the liability curve down a little bit or push the asset line up a little bit when all else is equal. Moving on to the third slide so let's talk first on strategies to reduce the liabilities and again these are things that would have the effect of pushing the steepness of that liability curve down a little bit. Yes, sir. I just asked a question I just want to make sure my understanding is correct. If the ADAC was funded 100%, whatever the payments would be from now until 2038, those two points would meet together 2038 by the end of the day. Theoretically, yes. When all assumptions met. Yes. But when you get to 100% funded those lines should be tracking right next to each other. Just want to make sure. Any questions. I want to make sure that we pause and go slowly that so that folks can ask for clarifications. Great. So let's start off with on the liability slide as I mentioned you know both the ADAC and the normal cost can be lowered if changes are made to the plan design that essentially like the cost of future benefits. And that effect, you know that has the practical effect of slightly flattening the steepness of that accrued liability line and when you do that, you see the gap between the assets and liability shrinks the unfunded liability shrinks a little bit. So as that unfunded liability gets smaller. So to do the ADAC payments because there's less of a hole to fill, and therefore the annual payments go down. And the financial system is open to new participants that both those lines will likely have an upward slope because they're going to grow with the normal cost every year, you know, the normal cost represents an annual growth in the liability but you should also be funding it so everything's moving in the same direction at the same pace but the goal in order to improve the funded ratio over time and get those systems up to 100% funded is to move those two asset and liability lines a little bit closer. The next slide is just a refresher on some context around sort of the numbers that are in the fiscal targets that are set forth in Act 75. So, back in January the treasure provided some preliminary cost impacts for making a range of changes to plan design that would reduce the liabilities and the ADAC for both systems. And in March the house also, there were some other potential changes that were proposed in the house, both cost savings and revenue enhancements were analyzed. So the one really common theme between both the treasurer's report and, and the numbers that were put forth in the house which we talked about earlier is holding, you know exempting anybody who's currently retired from any changes I think, I think we've clarified at this point that you know it's very difficult to make changes on people who are already retired, setting aside the question of whether that's desirable or not it's just legally it's very difficult to do so really your, your potential is to make changes on current changes and to people who have not yet been hired. So, one of the charges of the task force is to try to come up with a series of recommendations that would lower the unfunded liabilities and ADACs by 2500% of the size of the year over year increase. And again this chart on the right just kind of translates that bureaucratic language into dollar figures. So how do we do that well, the next few slides will show some options that have ways to potentially change plan design, and after I sort of describe what they are will then pivot to the other slide deck to go to some numbers and kind of show some preliminary cost impacts based on the actuarial work that already happened. So next slide, let's start with colas cost of living adjustments are peg to the consumer price index. The CPI is a measure that the federal Department of Labor does on a very regular basis that basically tracks the price of a basket of consumer goods, and the reason why this is a valuable data set is it helps track price inflation and help measure the value of dollar to the average consumer so if the price of goods that we all typically buy goes up or down, all of those inputs are entered into the CPI. Every year, the CPI is whenever we do the colas based on our statute, they'll take a look at the CPI over the previous fiscal year, and that will inform what the cost of living adjustment will be for the subsequent calendar So we would take a look at what did the CPI do during FY 21, July 1, 2020 to June 30, 2021, and that will determine what the cola will be beginning January 1, 2022. There's a little bit of a lag but that's that's the way we do it year after year. So, you know, colas up to this point have not have actually been an area of some modest actuarial gain and it's because we've been really lucky that inflation for most of the last decade has not been as high as the projects thought they would be. That is likely to change this year. The actuarial assumption I believe is an inflation rate of 0.3% and it was recently lowered from 2.5 I think, and the CPI for this for this current for the fiscal year that just ended can be higher than that. I'm sure you've all seen on the news that you know as as the economy is kind of sputtered back to life after COVID. There's been a lot of supply chain issues, a lot of sort of labor market sorting that has led to surprise increases. Things are sputtering as we get back to normal and as a result, you know, the supply and demand curves aren't quite, you know, in sync with where they should be. As we get through these growing pains, you know, it remains to be seen what the long term trend will be for the CPI and for inflation in general but really every economist this is this is like one of the top issues they're tracking right now because, as Steve noted in his presentation, despite the sort of good news we're seeing, we're really in unprecedented times and a lot of what we're seeing is being juiced up by, you know, a very unusual level of federal spending. We don't know what's going to happen as the effect of that tapers off and the sort of economic fundamentals get a little bit more closer to reality. It's a really interesting spot right now economically, but you know this does however produced because of that uncertainty colas are pretty significant source of risk to the pension systems because it's hard to know long term how this is going to shake out. So if you have a 2.2 or 2.3% inflation assumption, and you're getting three plus than inflation, you don't necessarily or CPI you don't necessarily know how long that's going to last when those years are going to fall in the amortization schedule so this is an area of risk to the plan. A range of options could be implemented to lower these costs and this risk however, you could remove colas for some or all employees upon retirement. So colas are not something that every system there does. There are systems out there that have no color. There are some systems that, you know, like ours are kind of an automatic annual cola. And there are some that you know it requires sort of an affirmative act of the legislature or you know a vote in order to, in order to implement a call. So the landscape is pretty wide on how pension systems treat this. So for example, a cola could apply to the first certain dollar level of your annual retirement benefit, and then amounts above the threshold would not increase with the cola. So that is a way of, you know, mitigating some cola with some equity in mind. So people who have a less generous pension benefit are still getting most of the cola, but if you had a much higher or more generous pension benefit only a certain portion of your of your retirement benefit is adjusted every year. Some systems also take a look at this through what's called a risk sharing lens. And you know maybe they only apply a cola when the fund achieved some metric of pension health. So one example could be colas are frozen, if the pension system goes below 80% funded. And then if it gets above 80% funded, there could be, you know, a cola again, you know, this could look any different ways. So sort of concept here is that it could also happen, you know, if based on an investment benchmark where, you know, if you exceed your rate of return over some period of time maybe there's a cola. If you're short of your assume rate of return, maybe the colas are frozen. And there's also this sort of shared risk shared gain idea where you know if you're implementing some limits on the cola when times are bad. You know, is there a mechanism in place that when times get better, those limits are relaxed a little bit so that way employees and members who shouldered some of the burden of getting the system back to better health, then get to benefit from, you know, from the fact that the health improved. You can also do things like only applying colas once an employee has been retired for a minimum period of time. Does it make sense for colas to start, you know, within a year after somebody's retired, or does it make sense to maybe let the cola apply after three years five years of retirement. And you know some systems out there instead of just doing an automatic across the board cola for everybody are treating colas almost like an elective option where whenever you go in and you're about to retire and you select your survivorship option. You know, you'll agree to a reduced annual benefit in exchange for that survivorship option. There are ways out there and systems out there where, you know, people may agree to take an actuarial reduction on their base benefit in exchange for kind of a guaranteed cola going forward. And so to some of the levers out there that other systems have approached this. I put over here, just throughout the slide deck. Just so everybody's memories kind of refreshed that I tried to distill what the current terms are of these benefits for the different plans. And on the bottom of this slide and the sort of miniscule print. I think it's kind of interpreted in plain English, kind of like who's in these groups, just refresh your memories. Most of this information is also available on the one pagers that the treasurer's office has on their website which believe gales also posted at the committee website I want to make sure that when we're talking about this stuff that people understand what the lay of the land is right. Are there any questions on colas before I move on. Okay. Another potential lever out there is taking a look at how average final compensation is calculated. So, you know, from one of the earlier slides, all that, you know, the main components of figuring out how much you're going to get that retirement as your base benefit or what's your average final compensation times your years of service credit times your annual benefit multiplier. So any changes to those, those factors will change the benefit you're likely to get at retirement. Most Vermont members have their average final compensation calculated by averaging their three highest consecutive years of salary. And the suppliers out there are visas group C, which is law enforcement and public safety. There's are calculated by using just the highest consecutive and group D the judges, their IFC is not based on any average it's based on their final salary upon retirement. The other thing you can do is modify the vesting period. So an employee, not every employee out there is going to be entitled to a pension benefit the day they start you need to work a minimum number of time. So, five years of service order to qualify for a benefit across all of our plans, testing period is five years, five years is a very common practice in governments across across the country, it's very rare to see a DB vesting lower than that. There are some plans out there that have vesting periods as high as 10 years. So, members, you know across the board right now it's five years, but you know if you make a change one to the vesting period and the absence of other changes, you know it really doesn't move the needle that much in terms of dollar savings. And a lot of this is due to the fact that, you know, as we heard from from HR's presentation a lot of the turnover we see is really before people reach the resting period. Before they reach the five years so the vesting period and isolation doesn't move the needle, in terms of savings the way some of the other levers do. I wanted to ask a question because I had observed when we were, I think when we were hearing a presentation from HR. A number of people who turn over either before they're vested or before they've got 10 years in. Really kind of makes me wonder whether whether those whether the pension benefit was actually a factor in within and those people coming to work for the state or to become a teacher. That's a really good question and you know I think I think an important consideration for the task force throughout this work is, you know, happy me, Vermont, an attractive employer for people of more than one career trajectory. Now there are some industries out there where you know you're likely to have much more longevity than in others. If you're, you know, I'm venturing, guess here that if you're a public school teacher in Vermont, there's a really good chance you're going to be a public school teacher in Vermont for a relatively long period of time. They move from school to school, you know, you might change your employer, but like that's your profession and you're kind of in the system here. You know, there is a range of people with career horizons and state government, you know, not everybody is on the, I'm going to accrue 25 years of service time horizon. You have non classified employees, for example, people that come and go with administration senior staff, you know, it's not uncommon for people to hear for less than five years. So is there, is there a way to create a retirement package that's attractive to people who might have more portal or, you know, career horizons or sort of that mindset that may not be as focused on staying with the same employer for their whole career. Maybe they're going to work here for a little bit, maybe they're going to transition to the private sector, you know, maybe they're going to, they're going to bounce around, you know, the workforce is so diverse in systems that, you know, I do think it's a fair question whether having a one size fits all benefit is attractive to everybody or whether more than one option should be made available, you know, it's a question that I think this group will have to wrestle with throughout this process. Please, please. Because I think that the attrition in those first five years could just as likely point to the difficulty of the work, which leads to an opposite conclusion, it leads to the conclusion that we need to make the job an attractive one so that we can retain teachers. But it could be there, but that's not the exact opposite. So I think there's a subtle distinction between what what is most effective at recruiting somebody and what's most effective at retaining somebody. There's a subtle distinction between what what is most powerful for recruiting somebody versus retaining somebody. So there's on the on the off to the right slide to on what is anything other than service actually performed with regard to these years. And what I'm trying to understand here is how many of these groups have the ability to roll on the news. And we'll leave or use a time that doesn't talk about into their final year of salary. Plus up. So yeah, unused leave time would be sort of an example that I think of as sort of what would be excluded when you say excluding time for services other than actually performed. I believe groups see on there's an allowance for a certain percentage of unused leave time to be counted. Sick time. I don't believe so. But I would have to double check the statute. So going back to the question about the importance of benefits to people at the state level and occasion, I would say definitely, you know, it's my thought that the longer you're in education, the greater that importance of the pension and the benefits to the if you are 1718 years left to go. And it's really critical, you know, as a 21 year old, you're still learning a lot about the world you're hearing about pensions your comprehension maybe isn't there. But pensions for retention are huge I feel, you know, it really puts people in a difficult between choosing to stay in a profession they love versus recognizing you know I can't afford to sacrifice my financial stability. In my first my benefits get cut. So I would say that pension benefits are huge, especially with retention. Any questions on this slide before you move on. So other potential option of the tool in the toolbox if you will is making changes to the normal retirement eligibility, and just as a refresher, you know, normal higher on throwing that around to me and you know, retire with actually no unreduced benefits you know it's it's your full pension for retirement, you know, in order to qualify under our systems you need to reach a minimum age, or a combination of age and years of service whichever comes first. So Vermont has a rule of 87 for visas members and a rule of 90 for some teacher members. And the effect of those rules is that an employee with 30 plus years of service can retire earlier than age 57 in the state system, or earlier than age 60 in the teacher system. Some pension plans nationwide though, require all actives to reach a minimum age with no rule. So it really does advantage employees who began their service earlier in their careers, but can result in higher and no pet cost, just because if you if you retire at an earlier age and you have more time and retirement. You know there's that's more benefits that are that you're going to be paid. So, so there's a range out there of how how different systems treat this, but the right now that's the system you have. There's a couple exceptions group C on on the state employee side that's the law enforcement and public safety group. They can retire early without penalty, or in other words no unreduced benefit at age 50 with 20 years of service with mandatory retirement at age 55 certain group F correction staff may also retire at 55 with 20 years of service without reduction. One person that's out there for both teacher and state employees is that if you have 25 years of service, you have the ability to purchase five additional years of service credit. With the cost on purchasing service credit, it should be kept, I believe it's calculated on an actuarial basis. So you're paying for what the cost, theoretically under the assumptions in place at the time, you're paying for what the cost of those will be in terms of what the normal cost of those extra five years should be. So how many people actually purchase credit. I don't the treasure of this money. It's pretty common. It can also be like for templated. So I purchased that purchase military service years. It's not just the end of your career. And those are pretty common provisions that you find in a lot of big state plans is the ability to purchase some service credit for other public service that you've worked elsewhere. If you didn't qualify for a pension benefit there but again it's the onus is on the employee to purchase the actuarial value of that time. And like you said the cost was up significantly. So, you know, back 2003 when I left it was 9200 years. And that's because the normal cost has grown. And they can. There's less time till I decided to read the words. One thing I don't see on your capture it's not quite modifying a normal time. I think it fits in this liability driver is incentivizing. I think there's some spots here where you both strengthen the plan and reduce costs. That is, you know, those are kind of options I think you should put at the top of the list, you know, bottom top ones that kind of hit that sweet spot of both saving money and making a stronger plan. Hold that thought for the next slide. I just want to make an observation but if someone else has a question first go ahead. It's something that you said a moment ago about how how we assess what it costs to buy years. And it made me worried that because we have missed many of our assumptions over the last decade, have we also missed the putting the right price tag on what it costs someone to buy years. I think that's a very fair question. And you know again the calculations are based on what what you know and what you assume at the time. But what we know and assume has changed, and it's changed in the direction of adding cost to the pension system not reducing those costs. So you might might be reasonable in assuming that they have undervalued what what we asked folks. I think that's a reasonable assumption. And again this goes back to, you know, the demographic and economic assumptions you have in place. So go into calculating the normal cost you know the amount that a year's worth of pension benefits are going to are going to cost you know what do you need to set aside for your to make sure those benefits are fully funded so you know if when your actual math is based on sort of what what is the price of a year of future retirement benefits and then the price that goes up, because your assumptions changed, then yeah I mean we, the price would have had somebody bought five years of service credit today. So it's likely paying significantly more than if they did that 10 years ago. And just to close the loop on this pondering, who makes the determination of what the cost to buy years is. I think the actuary is under working with the triggers. And are they based on the demographic and experience assumptions that were approved by the board. Okay, so it's the Treasurer's office in, in conversations with the actuary informed by the decisions of the return. The decisions of the retirement system boards. The actuary comes up with the factors that are used in the calculations come up with situations that are based on the years of service that they have with their current salaries and with the projected AFC is going to be based on the current salary factors that get calculated. Any other questions for the next slide. So another option or tool in the toolbox is you know taking a look at modifying the benefit calculation itself. You know as I mentioned your base retirement benefit is based on multiplying your years of service and your average final compensation by a service credit multiplier. And the systems here also set forth a maximum benefit level as a percentage of AFC with the colas are on top of that that's a post retirement adjustment so this is this dictates your base benefit. Both the service credit multiplier and the AFC cap and this goes to Eric's point can be adjusted to encourage desired behavior there's potential to do that. For example, increasing the maximum AFC cap may encourage employees to work longer than they otherwise would, which in turn may lower your pension and OPEC. Same with you know adjusting the service credit multiplier upward or downward will adjust the relative generosity of the retirement benefit when all else is equal, but you really need to do some actuarial analysis to make sure you have a good understanding of what the savings would be, because for every additional year somebody works, they may also be earning a higher salary so that could adjust their AFC upward and and you know you might save on one side but the cost kind of increases on the other. Over here on the right in this table I wanted to show you what all the benefit multipliers and caps are and kind of translate this into like what does this really mean. So Group C member, a law enforcement public safety member hits their cap after 20 years of service. So 20 times two and a half percent equals you're going to be entitled to 50% of your AFC. So any additional year you work beyond the 20 years of service, you know your your benefit will go up based on your salary history, going up, it's not going to go up necessarily based on the fact that you worked an extra year. So you can see what that looks like for all the other groups here too and you know and the visas new group F, you know the 60% of AFC cap and a 1.67% multiplier so you roughly hit your cap after 30 years of service. I think Chris put a point on that and I think Harold mentioned this one, one department of human resources spoke but you hit your cap and then the next year you still pay your pension. Yes, you're spending money in but you're not getting any additional benefit, except your potential salary. Yeah, you're not occurring additional service credits you are you're occurring additional salary growth, most likely. So obviously everybody's employment situation is different you know that's not necessarily the case, depending on where you are but that's that's correct. And you are getting paid. I mean, you rather have your full salary than a 50%. Right. And you know one lever that could be used to sort of get to Eric's point is, you know, if you want to encourage somebody to work beyond, you know, just for example the 36 years and new group F. So there are possibilities to say, you know, forever your work beyond 36, your AFC cap could increase by some percentage, unlikely to see real savings though if that increased by some percentage is not less than your service credit multiplier. And you could also, you could also say, you know, you don't have to contribute anymore. Once you hit that cap, you no longer need to contribute to the entry fund anymore. You're delaying that person pulling on the bench but you're not this incentivizing. Yeah, there could be and I think what HR was referring to is you know there could be a possibility of kind of freezing somebody's benefit at some level at the same time you're freezing their contributions and then they could continue to work and not the contributions but you're also not, you know, your benefits going to be what it was before before that occurred. So that is, that's a possibility that could be costed out. I think it's both. Yeah. It's interesting there's, there's like there's multiple ways to do this. There's always something like you mentioned Chris, I hadn't thought of an arrow for both of us to stop the contributions but there could be something like that where you have to phase out the contributions. Rather than stopping it in 0.65% year one, you know, a 1% less than zero. It's continuing incentivizing that behavior. It's interesting to discuss the options that are available. Yeah, and I think it's also worth thinking about you know what if this is the direction you want to go what what amount is sufficient to be a true incentive to change behavior. You know is is 1% savings in your pay likely going to be sufficient to really change your retirement plans, or does does the lever need a little bit larger. Any other questions on that slide. All right. So we talked about liabilities and again these are just some of the options when you when you take a look at all the factors that go into calculating what the benefits are going to be now. These prior slides really focused on taking a look at each one of those little lever and seeing how they were and what effective changes would have. Now let's take a look at the other line the asset line on the graph here are some things that you can do to boost the assets to try to make those come a little closer together. Obviously, a constant focus on your investment managers and investment policies is kind of an over here you know you want to make sure that you're being as efficient as you can managing the money at minimal expense, and at minimal risk and volatility you know that's what your job is is to really make sure that you know the money is being invested prudently, and, and, you know, in accordance with fiduciary duties, and you know it's always important and it should be a given everywhere that that it should always be top of mind to try to make sure you're maximizing your investment opportunities and I think you've heard some testimony from the chair of the pick about some of the steps they've taken in recent years to move to more for example, passive managers out of active managers which are more expensive and don't necessarily overperform for the price premium you're getting. So those are types, the types of strategies that the pick has followed, and a lot of other systems out there have moved to in recent years should always keep your eye on that ball that's a no brainer I mean that's, you know, it's obvious and you know it's one of those things one of the most frequent questions I get when talking about pension is my portfolio did x percent last year how come the pension system did. And, you know, I just, I want to take this opportunity just to remind everybody that we invest differently than the pension system does. Most of us around this table likely have a greater appetite for risk and volatility than the pension system does, especially if you're like me, and you're 34 and a really long time horizon to ride it out and ride the highs and the lows of the market. You know, the pension systems, especially a more sure system like ours, that's paying out more and more and benefits every year. They need to also protect their principal, you know, the systems cannot afford to lose 10% or 15% of their assets in a market downturn. You know that there's a huge issue so, you know, a lot of what the pick does with their investment console is to try to build a portfolio that really tries to capture the gains in the market, while hedging your bets against the banks. You know, you have some investments that sort of act as ballast in the tank to try to make sure that the system is stable and balanced, even when the S&P and the Dow are doing crazy things. You know, you want to hedge against inflation and try to make sure that the money have doesn't demand buying power so there are drags on performance that some of us around this table may not have in our own personal portfolio so that's why it's tricky to sort of compare a large institutional investor like that to your own personal experience. So I don't mean to go off on a tangent and I'm by no means like a financial or investment guy so you're going to want to ask other people about those questions but I'd be remiss not to point out the fact that you know there's just fundamental differences in how the pension systems manage their money versus the way any of us do. You know, an obvious way though in addition to just keeping your eye on the ball of in terms of managing your assets and the performance of that money in the market is putting more money into the portfolio. So we heard a little bit about investing one time funds to paying down long term liabilities. You know, there's been a lot of interest in conversation around additional dedicated revenue sources those are all options. And you know employee contribution rates is another level. So. And again, this is by no means an exhaustive list. There are certainly going to be revenue things that we haven't thought about yet or discussed yet but I'm just trying to frame out the sort of context through which these different ideas and proposals end up translating into moving those lines closer together. So, in terms of strategies to increase the assets, you know, I can't stress enough how important it is to fully fund and plan to fully fund the a deck every year. Even though the changes every year based on reality changing based on what's happened to the fund, you don't want to be in a position where you can't the a deck, or you know you didn't plan ahead and realize that an a deck in the future is going to end up costing more than it is today you know you don't want to set yourself behind it's really important to stay on track and make progress because if you don't, you're going to dig yourself into a hole. You can also just one time revenues toward paying down the unfunded liabilities, and we mentioned, we discussed this at length the few meetings and now my point here is this you know every dollar you earn through investment gains is a dollar that you don't need to pay in future so you know there's, there's an obvious efficiency there, um, indicating revenue sources to paying down pension liabilities can help relieve monetary pressures from the a deck payments, especially if they're new revenue sources that aren't already being spoken for to fund some other priority in the budget. One thing to keep in mind though is if, if the conversation pivots to a recurring new fund stream. It's probably worth thinking about a funding policy that specifies how that money should be factored into the actuarial mass. You know, should the new funds just be used to pay a portion of the a deck. That would really maximize the budget relief, or should the new be dedicated above and beyond the a deck and stacked on top of it. That could accelerate the improvement of the funded ratio and save interest costs over time, but provide less near term budget relief. I don't profess to have the right or wrong answer to this is the kind of thing that the appropriations committees have to wrestle with when they're putting their budgets together. So it's an important consideration that you know if new revenues are dedicated or those revenues going to be to sort of offset the existing a deck and reduce the cost that that a deck poses on all the other revenue streams coming into the state, or should that be above and beyond that doesn't necessarily mean that the state can afford the latter approach, but it's, it's a consideration of how to treat the money that I think needs to be front and center. I want to mention, is that using borrowed funds in order to close pension oral public abilities is risky, and it's not recommended by GFOA. Just curious, is there a difference between funding the a deck greater than 100% and investing one time revenues, or in a given year is that the same thing. I think the practical effect is it's likely treated the same way in the actuarial mass. That's referring to a potential. Yes. Observations. You remind me TFOA, Government Financial Officers Association. It's, it's the nationwide organization of number crunchers and public sector budgets, you know, and state and local governments. So, in addition to the sort of one time or recurring revenue option you know one thing to take a look at is, you know what what impact does employee contribution rates have on the system. Right now, employees pay a fixed percentage contribution set in statute, regardless of how well the pension fund is doing, or how expensive the total normal costs. And again in our system here, what active members pay out of their paychecks goes toward the normal cost it does not go toward the unfunded liability, the employee or pays the funded liability payments. The normal cost however has grown substantially over time, as the assumptions have changed right here are the, you know, the current contribution rates. But, you know, for time the, the contribution rates have not kept pace with the growth in the normal cost. Whenever you take a look at the most recent valuation of FY 20, and you just look, you know, across the system aggregated across all group plans. The rate of the state employee normal cost in the aggregate covers about 53.6 or so percent of the normal cost, and the share contributions contribute about 49%. So overall members pay about half of the, you know, across in the aggregate across all groups. Employee members pay roughly half the cost their pension benefit. Obviously look different from group to group and we would need the actuaries to break that out for us but you know group B for example in group C, likely have significantly higher normal costs than group F because it's just that there's a different benefit multiplier and a different sort of inherent generosity in the pension benefit. But you could structure these contribution rates in different ways. You know, we right now we have flat contribution rates that are set in statute. You can also have sort of tiered progressive rates like our income taxes where the more you earn the more you pay, there's a little bit of equity in that feature. You can also have systems out there where they have variable rates, instead of just fixed rates. So, the system I came from in Philadelphia is a variable contribution rate, pegged to a percentage of the normal cost. So every year when they recalculate the normal cost, they recalculate how much my contributions going to be. The other thing that that you can do that some systems have done in the context of risk sharing is adding a supplemental surcharge on top of the regular contribution rates and triggering those supplemental charges, you know, based on some overall metric of pension health. So, you know, one of the systems in my home state recently moved to a system where they'll take a look at the last, you know, nine years or so of investment performance relative to the assumed rate of return. And it goes below the assumed rate of return by some level on a supplemental contribution kicks in. And then this is reevaluated on a regular basis. So if all of a sudden, you know, the average brings you up above the benchmark, you know, those supplemental contributions might go down. You could also, you know, tie it to achieving a certain ratio where where members may pay an extra few percent until the fund reaches 80% funded or some metric like that there's just a range of options. So that's how employee contributions can be structured. It's important to note though that the employee contributions in isolation are not going to lower your total accrued pension liability. The real impact that this has is lowering the ADEC payment, because if employee contributions are higher when all else is equal, they will pay for a greater share of the normal cost that would otherwise fall to the employee or through the ADEC. Now, it's relatively easy to get a back of the envelope calculation on, you know, if we if everybody's contribution rates went up by one percent across the board, what would that roughly translate to and you can do that by just kind of modeling based on what the overall covered payroll is going to look like. So you can get pretty close by taking a look here on that, you know, in the FY 20 evaluations. The systems were assuming that in the current fiscal year the covered payroll would be just shy of $600 million for all covered state employees and just shy of $700 million for all covered teachers. So, you know, a rough back at the end of the calculations if everybody across the board paid an extra one percent, you know, roughly $6 million of additional revenue coming into the visa system, roughly $7 million coming into the teacher system. And that is the increase as payroll increases every year across all plans right now. The assumptions are payroll would increase by three and a half percent a year on the state side, 3% a year on the teacher side. It's just wondering here. There's an opportunity to think about policy here like a new revenue. What I'm thinking is if employees paid a greater percentage of the normal cost. Reducing the amount that contributed a portion of that would go to the directness in the funder's liability. You know, so it doesn't change the space, so it wouldn't have the budgetary, but it would have improved liability. Yeah, I think that that is a potential path forward. But you know, obviously the feasibility of implementing that, you know, I think in large part depends on, you know, what can we do to manage the budgetary impact. But yes, just wondering if that's not. Thank you. It would happen fast, but I thought I heard you say something about right now, the employee is roughly half the cost. Can you say that statement? Sure. So right now employee contributions cover roughly half of the normal cost in the aggregate across all groups. Based on the preliminary contribution requirement calculation and the FY 20 evaluations, the total normal cost for all teacher members across all groups is about 11.02%. On the state side it's about 12.67%. So employee contributions, you know, cover just over half on the state side, I think across all plans they bring in about six points, they were projected to bring about 6.7 or 6.8% of payroll on the state side it was around 5%. And those numbers are all on one slide in the valuation study and they're recalculated every year. And there's a little element of imprecision on that too because you're kind of taking what's happened in one fiscal year and projecting it based on what you think the payroll is going to be at the end of, you know, two fiscal years of the future. Two questions. One, do you know how common a progressive contribution now across the country? And in the situation you've described the variable rates like how, what was the variability that you experienced through your own experience? Sure. So, you know, a progressive tiered structure, you know, in my review of sort of what what the landscape looks like historically is not a dominant system. I think some systems have started to embrace it a little more though. In recent era systems have made changes to their plan design. You know, the system I'm familiar with that we recently did in Philadelphia is based on your income you would pay a surcharge that went as high as 2.5%, I believe it is. So people who earned $100,000 were paying extra 2.5% above and beyond their base contribution. And I think people under like $35,000 paid nothing or a pretty nominal amount. And these tiers were sort of structured on sort of the bell curve of the salary distribution. So, you know, they made it so people who are sort of at the bottom quartile weren't shoulder the low to the extent people in the top quartile were. And, you know, with respect to your other question, I would have to go back and look what the range of supplemental surcharges are and fluctuation and some of the other systems it's low single digits percentages. You know, and a lot of these systems when you put something in like this, you put guardrails about how big or how small those those fluctuations can be from year to year, because, you know, I think, I think there's a very compelling policy argument, not withstanding a political argument that it's probably not desirable to have people's paychecks fluctuating wildly from year to year. So putting some just based on the performance of the pension fund or something else. So, a lot of the systems I've seen have put some guardrails in where, you know, contributions may not be able to go up by like one or 2%. And then this is revisited, you know, every year or two years or three years. So there's a reasonable range of how high or low these costs can fluctuate from year to year. That's a great question. That's a great question. I got the phone a friend on this one. A couple years ago. Some incremental increases that were adopted whereby the employer employer and employee contribution rates went up by. Like an 8% or a quarter percent or something like that. They went out like four or five years or for each year and went up. But they are set like that. Yeah, I think I was like three or three years ago. I'll look it up and provide the information. It's been a little, I think about 10 years ago or so the teacher contribution rate was changed. But I would have to pull that. Actually, I think. I can provide. We have a. Yeah. For each group. And one of the other just sort of possibilities in this sort of space is, you know, different plans have different levels of generosity is based on what group you're in. So, you know, each group has more favorable terms than for example, yet they pay the same contribution rate. One, one path forward could be, you know, does it make sense for each group to pay some, some contribution that is a little bit more proportionate to the true normal cost of that group's benefits. And more generous benefit is being offered higher levels of contributions are being collected to pay for that more generous benefit. And, you know, I don't want to go on a tangent here but on the subject of, you know, maybe creating more than one option for, for different groups of employees to choose. One of the things that Pennsylvania recently did was for new buyers, they can choose from two different types of hybrid plans. So what you contribute, you know, obviously your benefit is based on what you contribute so you can either choose to pay a little bit more to be in a more generous plan, or you can choose to pay a little bit less and be in a slightly less generous plan. So make the decisions that fit their own career trajectories but it does provide people with not a sort of a one size fits all approach. That second statement that you made about the people who would be choosing to pay a little bit less, that that have to do with long term plans. I would think that they're like, they're very likely is that their current situation at home would might require them to necessitate that they pay a little bit less. The differential in the overall rate is small, I think it's 1% or less. The real, the real sort of difference is that in one option you're paying a little bit more to define benefit and a little less to a defined contribution component. And then the other one you're doing the opposite you're paying a little bit more toward your defined contribution component and less to the DB. So therefore the DB benefit is calculated on a lower multiplier. And therefore all the contribution rate is, it's, it's, it's within one percentage, depending on the plants, how it split is different. So I sort of touched on this throughout, but this sort of concept of risk sharing. I wanted to dedicate a slide to, because this is something that that has become a prevailing trend and a lot of systems that have made changes to their benefit in the last decade or so. So you know, and I think you've heard this sort of ad not as nauseam at this point in the traditional DB model. The employer bears the risk of addressing underperformance of the pension fund. The employee doesn't bear any risk of higher than expected costs or lower than expected account balances at retirement. So a lot of states to help address the costs, the growing costs of their, their legacy systems, and try to mitigate their risk going forward from missing actuarial assumptions in the future, have adopted some strategies to sort of share their risk a little bit more with the, with the members of the plants and if you have a digital copy of this I added a link here to as a report on this which gives a pretty comprehensive and very readable overview of some of the some examples of the risks that other states have followed in this sort of vein of risk sharing so I'm not going to spend a lot of time going into it today but it is a really good read if you have 20 minutes or so to browse through it. So some of the most common and prevalent forms of sort of risk sharing are, as I mentioned tying employee contribution rates to the performance of the pension system so you know, it could be tied to the some relation to the cost so when your assumptions change in your normal cost goes up, you know, you've maintained some consistent percentage of the cost of your future benefits and grow sort of in line with one another one is you know this example of contribution rates might increase if the fund misses some actuarial benchmark, and then decrease fund exceeds the benchmark. So you can also tie certain benefit provisions to the performance of the pension system. So, maybe colas could be tied to overall performance of the fund you know if you miss your assumptions. Maybe there's a freeze on a call of that year if you exceed your assumptions maybe it may be the color resumes. And there's these two models of plans out there that are being offered in some states to new employees called hybrids or cash balance plans and I have one slide on each of this kind of provides a high level overview of what those are hybrid plans are a trend that is being increasingly adopted by a lot of states and the aftermath of the Great Recession, and they incorporate features of both DB and DC plants. So the members typically participate in both systems. And there's really two kind of models out there there's this, the sort of side by side model and the stacked hybrid model. And a lot of times in the side by side model, you'll participate in a DB plan that might look a little bit different from the legacy plants, maybe there's a little bit less of a contribution rate. There's a different retirement age maybe a lower benefit multiplier, but the key sort of theme is there's still a defined benefit component, and newly hired members are still participating in the pension system. And they would sort of be creating a new group, you know, a group G or group H, where, where new folks would come in they'd still make contributions into the system they'd be paying for their normal cost. Their funds would be invested in VPIC with everything else. They would just accrue a benefit at a different rate than the legacy plants. But in addition to that, there's a DC, a defined contribution plan offered with an employee or match. There's an example here from my home state where, you know, there are, there's, there's two systems where, you know, you participate in both a DB and a DC. The one you know you contribute 5% to the DB and your service credit multiplier is 1.25%. So that's less than the legacy plan which is high is like 2.5%, which is why the system is really struggling to do what it needs to do right now. And they have next to that a DC component where members would pay in and then the employer would match that as well with 2.25%. So that way, members not only have some defined benefit at retirement, but they also have an alternative savings vehicle has some portability, where you know maybe if they're not going to be there for 30 years, they can they can move to the next job and still some money accumulated with an employer match in a retirement account that's portable and they can move to the next job. So that's the more prevalent form of hybrid. You know, there's another one called the stack hybrid in Philadelphia is really the most prominent example of this that at least I found or that I've seen cited in literature that it works a little different instead of everybody having sort of two sides of the same coin and you participate in both. It's the way the stack hybrid works is the DB is available to everybody up to a certain income level, and then the DC plan is available to people who are above that. So that line that income line in Philadelphia was set at $60,000 and that was a level that was relatively close to the median salary or average payroll. So what the plan means is, if I earned $65,000, my benefit looks the same as under the legacy planner pretty close to it. You know, the multiplier is the same the contribution rate is similar I think we adjusted the vesting period to 10 years but generally people who are who are there didn't didn't lose a whole lot from where they were previously with respect to the changes to the DB. So for more than $65,000, I would still participate in that plan but I would stop paying contributions after $65,000 of income, and my FC for my benefit calculation purposes is also kept at that 65. But for every dollar I earn a 65 I put money into a DC plan that is matched by your contributions. So the higher earners not only have sort of a base defined benefit that provides reasonable level of retirement security. They also have sort of that alternative savings vehicle available to them on top of it. The real advantages to the stacked hybrid that we found where a it helps limit your future liability from paying really unusually high defined benefit benefits. It was not uncommon to have people who would at the end of their careers you know you may start at the bottom wrong. And after 40 years you leave as a commissioner or deputy commissioner with a very generous salary. You've accrued so many service credits that you're retiring with a very good six figure pension, which is something that you know certainly drains money out of the system and is an experience that is representative of the vast majority of the workforce. So one of the advantages of setting that cap was, you limit some of the future exposure to paying overly, you know, relatively generous benefits, but you also provide an alternative savings vehicle available to people who we had a lot of earners who didn't have the 30 year career prize and you know some did and they worked their way up, some come and go with with with mayoral administrations. So you know this will help people who may not be there for 10 years to be able to see some while they're there and move on to the next job and still have a little bit of a nest egg built up to portable. The real advantage of the DC is it adds that element of portability because you can roll those contributions over into IRAs and take them with you when you go from system to system. So are there any questions on this slide. Of course on that one. Most someone's AFC. Correct. And so for as far as the country's concerned, like every person that's involved in pension earns 65,000 or less like that's the, that's the way it works and the exceptions to this where we did not include public safety or law enforcement, and elected officials chose not to them themselves. But otherwise all sort of rank and file city workers who are hired for future hires, the pension system treats them as if their AFC can't go above 65. One of the other forms of sort of risk sharing out there or models out there, the alternative to TV models this one's less prevalent but it is prevalent in some states it's called a cash balance plan. It's not as widely adopted but they do offer sort of the same idea of a defined benefit but when you take a look at your normal pension system you know your typical model, your benefit is dictated a lot by your final terminal earnings your average final compensation your three years at the end which tend to be your three highest years. So if you're in a cash balance plan. The, the benefit you get at retirement is based a little bit more on your career average of earnings. So, if you're in a cash balance plan. Every year you work. The employer puts a credit as a percentage of pay into your hypothetical account, you know it's not like a decent it's not a defined contribution where you've got a person in the bank invested in some money on this is a hypothetical account where you accrue credits. So every year, the employer will give you edits as a percentage of pay and a defined interest credit. So, these accrue over time in the account, the account centrally managed, and the employer funds these accounts on an actual aerial basis like they do with DBs. The risk though remains with the employer so if your money didn't grow at the rate that the interest credits for growing and somebody's account the employer needs to make up for that. But as you work and the longer you work the balance of credits in your account will start accruing bigger and bigger over time. Now, how big that balance grows, plus your retirement age determines how much money you're going to get at retirement. This system tends to be a little more portable than a legacy sort of DB plan, because whenever you leave before retirement when you terminate, you have a couple options you can either leave your balance in the plan and keep getting some interest credits on it. You can invert the balance of credits into an annuity whenever you want basically so you know within some reason if if if I'm retiring at 67 the calculation is going to look different than if I retired at 62 for example with with the same balance. Or you can invert the credits into a lump sum and roll it into an IRA. You know if I decide to leave and go somewhere else I can, I can take the credits I have exchanged them for cash on on on some actuarial basis, and put that into my retirement savings and I'm going to take with me to the next job, but unlike hybrids. You know, in a cash plan. You're not maintaining the membership participation in the legacy DB system, you know what all these new hires are not going to be making contributions that can go toward sort of solving the problem that's built up it's sort of creating a whole new walled off system that is outside of of the current systems that we have in place. So, are there any questions on that before you go up. And she has been done so through IRS and then the employees that give a tax balance based upon the corporate formula and they then take it to their IRA, or they probably not actually seen that curve. Is that a factor. I think it sounds accurate. The options that they go through the same. Yeah, yeah. I mean, it wasn't called a cash balance plan for that. Right. And you know I think a key distinction here sort of between the cash balance in your normal sort of legacy plan is, is, you know, the sort of the determining factor isn't how long you've worked and what you what your final salary was it was, in addition, you know how much did you earn throughout your year there you know how big your balance grow and over time how many credits did you accrue in your account and then, you know how many years do you reasonably expect to be retired for those will determine, you know what your annuity payout will be. Okay, so we're almost with this one thing to keep in mind throughout this conversation around options and levers is, you know, the universe of impacted members. And as we mentioned it's really hard to make changes to people who are already retired. You know if you make changes that are limited to the, or if you make changes to the current workforce. That is likely going to generate much larger near term fiscal impacts, but they're likely going to be more difficult parties to come to agree on, as I'm sure we are all suspecting. On the other hand, if you make changes that only apply prospectively new hires, you know that might be a little bit easier to come to agreement on, but it's going to take longer to recognize the fiscal impact of those changes because you need employee attrition to happen, because it's all based on the new hires coming in, who either paying more or accruing a lower liability so over time it becomes more of a more of a net positive to the system. You know, one possible path forward that we sort of mentioned in the context of thinking through recommendations around 150 million is, you know, does it make sense to create a new plan for for new hires and incentivize current hires to maybe switch into the new plant. You know, maybe, maybe folks don't have the 20 or 30 year career horizon and maybe there's an incentive that that that could be made attractive to people to switch plans for some period of time to maybe earn a different retirement benefit but also pay less out of their paycheck for it it's just an option out there that's worth considering. One thing that you know I remiss to not point out and I think this was a common theme throughout this pension conversation has been, you know, changing often had unintended consequences to employee behavior, you know, those unintended consequences could adversely impact not only the pension fund, but also on the business side of delivering core services you know you don't want to create mass exodus of people retiring at once, especially if those folks are already eligible to retire, you know, when all else equal likely representing an actuarial gain for every year they work. So, it's something to be mindful of is that, you know, whatever changes you make in this context, are likely going to have some sort of unintended consequence, you need to understand what those unintended consequences are and do your best to mitigate it's just, it's always something to be mindful of. So, options for future hires, you know, and again this is a sort of trying to structure something that you know, we can have a conversation about what to do, if anything for for people who are currently active employees and paying into the system but as you start thinking prospectively. You know, you have a few options you could either the status quo just keep doing doing, where you can create new plans with different benefit and contribution structures for new hire so that's that's some of what we were just talking about you know you could stay with the defined benefit model but maybe with some different terms than the sort of old plans or the legacy ends, you could create defined contribution plans with employer matches. You could do hybrid plans that have those features of both the DB and the DC. You know, I think it's worth asking questions about to what extension new hires have the option of choosing plan, you know there are there are some systems that it's mandatory to go into a new plan. There are some systems out there where you have the choice you can either go into this plan, or maybe pay more to go into the old plan. So, you know, this sort of idea of incentives versus mandates is something that that is important to be mindful of. And in a similar vein, you know, should there be taken to encourage people who are already in the system to maybe switch to just based on their own personal financial interest and career horizon with with the employer. These are all questions that are worth thinking through and evaluating the context of making any changes going forward. You know, a lot of states have changes prospectively and typically they were created mostly for new hires with the goal of reducing the risk of growing retirement liabilities in the future so that's been the common theme is like, how do we just contain the risk going forward. And, you know, it's, as I mentioned, having more plan options may appeal to different segments of the workforce just because everybody, especially when you look at how diverse the occupations are, especially in the state system. You know, maybe some folks have higher expectations of career mobility than others so I think part of sort of the recruitment question that we're all wrestling with is, how do we make sure these benefit packages are attractive to every second of the workforce. And one thing I want to stress here is, you know, DC plans have had a lot of conversation in the last decade plus moving all new hires to a DC plan will do nothing to address the current structural facing the pension plans or new liabilities that have already accrued, because if you move everybody to a DC plan you're going to have people in another system are not contributing from the active payroll toward these legacy plans so there may be compelling reasons to implement a DC option for people, but the one thing I want to make clear is doing that is not going to fundamentally solve the math challenge we're all wrestling with. And even though there's been a lot of conversation around DCs, and more states have adopted them as sort of options in their menu of retirement benefits, very few states or large governments have abandoned the DB model entirely. The DB still remains sort of the gold standard and the most prevalent model of providing retirement security among state and large city governments. The DB model is looked a little different over time. So, if you have any extra time on in your spit in your ample spare time, and you want to read a little bit more on what some other states have done on these issues. There are a lot of links here that go to some materials at nasa together, which are actually very easy to read and they're pretty informative about this. What some of these strategies have looked like in other states, and and what folks across the country have been especially since the recession, when modifying their retirement structures and it can be a really helpful sort of guidepost to look and see what all's been adopted. So this is my homework assignment for all of us to take a peek at these given that we're going to have a presentation from nasa. A couple weeks. So Chris not to second guess this very list and my head is really still spinning and I've heard all of these things before. Are there any folks around the table who can think of potential adjustments that should be considered, or should be included in this in this list of. I don't know if this is other but I think it will point at put out the idea of potentially giving people the option to pay more in for exchange of service credits down the road. I don't know where that fits in here, but thinking that if people pay in a higher percent of money in their careers that that can translate to being able to retire earlier. It's helpful. I think that that's something that would have to be costed out by actuaries. Ideas. So, a lot of monitors. Draw return. So I would like to see what we say. That might be a good segue to the second slide. Do you mean working until the full? Or deferred deferred drawn. Okay. I also wanted to add just, I want to make sure that. Talk. I can imagine as I see the complexity of how these things all fit together that it's it's gonna take It's a fair amount of time to even to give a request to the actuaries to ask them to come back and tell us, you know, does this work is this helpful and how helpful is it. And I think that in just in terms of their palatability I think some of these that are more of a carrot and the stick woven into one might be better might be more acceptable to folks who are in the workforce then then then some of the things that are a little bit more straightforward, you know, a little bit from list a and a little bit from list B. And so I want to make sure that we move as quickly as we can the group to start thinking about, well, I'd like to cost out, you know, this, or fill in that note. So I was doing a deep dive. And that was one of my precious after this. The documents you have on your, I'm just on on the house operations and all of that because you have you guys have gone over this. All right, a lot of this information, but I saw just in the treasure of pieces report from January, that she does a lot of, there's already been some actual actual work on if we should say so. Is there a way and there are different reports with different estimates and stuff like that. Is there a way to just grab all of that from the different reports and just have it. Is it. That's another good segue. And Chris is, is a treasure to have for us to be because he anticipated that that would be the next set of questions is understanding the extent to which you can impact the unfunded liability with these changes, but I also want to make note that it is now eight minutes of four o'clock and I don't think that we're going to cruise through this with any level of understanding in eight minutes. And Michael passed out of a sheet of paper here for us that I guess I would like to suggest that we give Michael a moment to explain what this is, and that we come back to this at the beginning of next meeting is that Okay, because the understanding the relative weights of some of the changes or the impact of some of the changes is really important to informing how we, how we plan the first flood of asks of the actuary. So, anyway, Commissioner, take it away. Thank you very much so. So I was talking to Sarah, you know, during the break and saying, you know, I think the agendas that are important to me, but what would be probably most helpful for us at this point is that a broader sort of perspective as to where we're heading. You could mention a couple of meetings ago. And so how I visualize that or think about that is, okay, so what's the, what's the work product that's upcoming, you know, sort of skipping ahead of the final report for that just to that interim report. So we need to put out an interim report on October 15. You know, we have seven meetings between now, seven more minutes between now and October 15. So what are the things that we need to accomplish in those seven meetings and again just going from October 15, forward or backward I guess, you know, in October 13. That's the last meeting we have for that interim report is a public so you know I think you could spend that meeting pretty much, not like going into the weeds but saying like, yeah, we're all good with the final report so much of that work would have to be done before. So, so then if we're talking about really going through a draft and really deep detail I mean that's probably October 6 September 22. So, maybe even September 15 is when we see a first draft that of that interim report. So, some time period. So, if that is the case the one we need to accomplish on September 9 August, I think it's 25 number 26, and then August 18. So, so I just wanted to put that on the table and we could talk about what happens after the interim report as well. But I think just picking that October 15 date and thinking about what the next seven meetings look like who do we want to hear from, what are the work plans reach those meetings, you know what we hope to accomplish that we can meet that October 15 goal in a way that is thoughtful and constructive and we hear from all the people that we still want to hear from. One question that comes to mind is, is whether the request made of the actuary formally to give us a cross subsidization. So, let's just make sure that all of the folks sitting around the table understand the process because I know that we've already agreed that we want to have that done. And that that is something that can be done now in advance of us trying to figure out what menu of ideas we want to work on. So, for those of us who've not been through this. How can, can you explain the process that we're using in order to make that request. So it's something that the request will come to the joint fiscal office. Yes, so we just need some email. You did have something from the request coming from the joint fiscal office requesting. We've already had conversations with the actuary they've seen that they understand the topic over. But it interests in terms of a formal request. Okay. Do task force members want to have a discussion about that right now or would you defer to us to initiate that analysis of the subsidization between the different groups within the state. We're specifically in our charge. It is. You know, we did that much especially just want to make sure there weren't any red flags. Will is here this week. Okay. So, working backward from the interim report date, recognizing that we need to, we need to figure out what, how we're going to plan out August and September, understanding that those two meetings at the beginning of October will likely be focused around the first and drafts of an interim work. We also already have a couple things on for those early meeting, like the 18th year at the second draft rate of the state. And then on the point that we're going to have that report. And now we have added part two of Chris's presentation. We're adding impacts of various possible changes. We're adding that to the August 18th agenda which we spoke about back way back at nine o'clock this morning, which feels like it was a day ago. I love the idea of not the mother. I think you're specific. Interim report for me to be what exactly what we want to have in that. Where we need to be very good. So, we should factor in some agenda time at our next meeting to, to have a discussion about what each of us thinks should be included in that October 15th report and then from there. Hopefully we can come to an understanding of the steps that we need to take along the way to get there. We have some witnesses, or not, not witnesses, just somewhat, you know, speakers who we would like to invite, but there's a list. But it's been finalized right now. Can we send that, will we send that when it's, when we have a more solid plan on, we could get possible. I'm not sure what you mean by a list. It's the list we came up with some people like from. I think it's for me. Is it for me, Andrew. Yeah, there is a couple thinking about, you know, trying to get policy live talk about public assets to come to talk to us. So, just on that one, is he going to speak on, I mean, because I've looked at the website, they have nothing on pensions. They published a lot of, a lot of work on a broad range of issues, but we haven't been able to find anything related to that, which is why I went. I'm just wondering, I found absolutely no research on pensions on their site. So there will be an email sent just with who the people are and why. I'm just saying there is a list and we're just sending me out saying, Hey, this will be, let's look at this and see if we can have. I did have with that it. It's always been filled on that. So it sounds like we have net economic benefits. Actually, and secret services that schedule. Yes, but they've gone back to now. Okay. So that might be on the agenda for August 26. I'm kind of thinking that's correct. As we chart out what what our big picture work plan is that we can insert people we want to hear from on this topic. Maybe revisiting us on August 18. I don't know who made this document, but is it possible that whoever made it could turn into like a document where we actually start mapping out the different things underneath maybe maybe as a page and then we all have access to it. I think it would be something that shared as a little bit about whether we're all editors or not. It would be great for us to just all be able to have a comment. I just I typed it up just during the meeting night, but I could do a Google dog and share it with everybody. I think you're absolutely right. I think ultimately that's what you want to do is sort of, and it's not like it's a concrete thing like it can't move, but you know, there's a certain person we want to hear from. We should know like, well, times running shorts, we should make that on the 25th or, and you can sort of build that out and see what, you know, what else we have to get done on that day, you know, to meet those deadlines. Yeah, I really appreciate that. August 25 for that date. I perpetuated the message of this mistake. So, if there are other speakers we need the sooner we identify them, the easier it will be to get them. So right now, we have master coming in and reached out to NC purse. We're going to provide a list out this afternoon or tomorrow to see if you guys can look at it. You're going to provide a list of speakers. Okay, so we'll talk about that on the 18. Thank you. I believe that it is past time is all you have time for today so we will. We'll see you all on the 18. Thank you so much for being with us today to take notes.