 Task Force. Not to say the whole name because I don't think we need engine task force. It is July 22nd, great. And here we are. And so let's get going. John, who would like to walk us through these John is that you or Sarah or let's let's take a moment to just have give folks an opportunity to review. Oh, okay. Good questions, any, you know, things that you needed more information on or Task Force discussion about last. Good morning, everybody. Nice to see you all back here today. Before we get too far into the agenda, I think it's great that we always have this time to reflect back on this meetings just kind of look at it. So far we've had two things through this process and we have really important work to ahead of us. The first meeting was mentioned that we need to have honest conversations with each other and that we're here as a group of individuals not separate. And I think those are ideas that we can all get behind and supportive. Since our last meeting, I had a chance to talk with Molly and Eric, Kate, Leona and Dan, just about how things been going so far. And then as we were starting to reflect together, we noticed we had some similarities in our thoughts so far, and we'd like to take some time this morning to address the entire group with kind of our shared thoughts. And we're going to have a variety of topics we'd like to look at from agendas to our duties, covering x75 as a task force. Sure. Do you want to do that now or do you want to add that to the agenda to have that conversation? I'd love to go through it now because I think there's parts where if we go through it now, there might be time then to be like, okay, well, yes, we actually need to address this now but later in the agenda also and possible retweak of the agenda, especially near the end of the. Okay. And I will just remind us that as being on YouTube, it's very tempting for us to think that we're talking to those people out there in the world, and we're not. We're talking to 13 of us here and it is pretty awkward that we did in this kind of long line here but there have been some instances, not here on this task force but where in meetings seem to be addressing a larger audience out there and not talking to other task force members. So just so we all remember that who it is that is taking part in this conversation and is actually part of the conversation, just to remind you. So, so, yeah. Awesome. Dan, do you want to start us off? Sure. I guess for me just looking at things. I guess going forward, it seems like it's important as a, as a committee doesn't make to me it makes sense to maybe formalize the process, a little bit more in the sense of creating an agenda at the end of a meeting together. A little bit more I know you've been asking what do you want put on the agenda but to me it just makes more sense to try to all of us come to whether it be with a vote or whether it be just some type of agreement amongst all just some of the things to put on the agenda. Just for me it's like, what is the, what is the process of us making a decision, you know, more does have to be more formal in those sense of sense of the committee. And if it, it also seems we're two meetings in, but I'm not really sure on where the, you know, really as a committee what what is our focus. You know, I know the last time I did this they set up some guiding principles and these are the principles that we're going to follow. So again, to me it just seems to make sense that for us to move forward, we kind of should we formalize principles of what we as a task force, need to be important because that's really what our goalpost is, when we start making decisions and start voting and start trying to decide what we think is the best path forward on this and how are we going to do that so I think that's important for us to sit down and take some time, whether it be at the end of today or set it up on an agenda at the next, you know, just take some time to really think about, you know, what, what are the principles that we all can agree are important for this and, and what are the things that we're going to do to push this forward and take the path that we all agree on where it needs to go and what we're going to do. So for me, like I said just general just maybe more of a formalized process going forward. Not that it is that but I personally have heard from others it just, it seems like we're here. And it's, it's, it's the perception out there that it might not be as formal as and open as it was said to be. Did you have a part that you would like to add in also regards to agenda or reports. Yeah, we just feel very strongly that we're in a point where we should be creating together using time at the end of the meeting to be able to do that and also how we're going to address all the charges that are in front of us just feel like that would be a better way to have shared voice in the process. And Leona, can you speak to where we've been talking about witnesses coming and joining us and I know Leona was hoping to speak about that this morning. So really, in regards to the witnesses, we've had some great, you know, testimony from the joint office, and that has been very informative and very helpful. So we're just looking forward to a variety more variety of witnesses as we go along in the process outside of just the JFO office. So that will be awesome. So can I ask a question about that is when we made the list of who we needed to hear from that we, that's a kind of a growing list that we would keep adding to so. So what we'll have at the end of today, some conversation about the product, the public input process. Yes. Thank you for adding that to the agenda. And also, I really thank you for sending out that list of information, bringing together what we've all talked about, I thought it was really helpful to take a look at that and and see not only what we've discussed but kind of start to see a path forward. And I thought that was great. I was reflecting on the, you know, our agenda item last time about the report, and we focused on the recommendations. And there's a great section at the beginning about the guiding principles, speaking to what Dan said. And we're going to have, you know, more talk of recommendations today. I just want to make sure we make the space to the organization of this task force is very, and that it's a diverse stakeholder group. And I just want to make sure we have, we make the space to chart our own path. And I think what would really be helpful is, you know, maybe next, next meeting, we could take a look at, again, at our charge and take a look at that list, and kind of put you know, okay, we should have a meeting dedicated to this topic. And, and this, you know, these are the experts will begin to bring into that. It's going to take a little time to bring the actual professional services on board. And, you know, I think we can use that time to really put some context around the numbers that will eventually come back from the professional fee actually. So I just want to encourage us to make some time for that to think about collectively, how we want to meet our charge. Make sure to bring, bring fair on that. The information list that was sent out in between the actions, a really good start. So I really appreciate this. And so I think to kind of wrap up that part I mentioned possibly looking at the agenda, recognizing that we already have some people scheduled today and respecting their time. But if there's no objection to setting 2025 minutes at the end today where we can all work collaboratively on agenda. I don't know if we need to make a motion to accept that we spoke about formalizing the process essentially but getting agenda creation on as a task force. Today at the end will be great. Okay. I understand the need to be more formal and to make motions and stuff I'm not sure that I feel the necessity to do that, because it, in my mind it, it makes it less, less conversational. And, and I feel strongly that this these 13 people should be here talking to each other and and not. This is more the size of one of your committees. So it's harder for me to imagine how, how you operate that way but on our committees we have, we only take a vote when we have to show an action. I mean, if there's otherwise we just have discussion. And I guess I would just add to that that the, the request for us to be more collaborative with building the agenda is, is, you know, received and we agree we're fine. I mean, it was a little hard from day one to build that agenda when, you know, when there was clearly a body of background information that we all need to cover together. And as, as we have moved through these first couple weeks I hope, I hope you recognize in the agendas the requests that we've heard from you about what you want to cover, and we could certainly take the last, you know, that last time on our agenda today to talk about agenda for the next meeting. And we can tell you what what we've already lined up in response to previous requests and we'll figure out how we fit that in the other. That would be excellent. Yeah, I think I think what you know for me personally I think we'll just, I think what we'll find is after you know a couple of days we've all kind of got our feet wet. I personally am not, you know, this is not something I do every single day so just getting used to everyone here and getting more comfortable with being in the room with everyone and doing that. So I think as time goes on. I think we'll certainly be more upfront and speaking more to what we're thinking and saying and going so, like I said, for me that just seems to be where we are right now just we're getting comfortable. And in speaking with with everyone outside of this and also with you. Everyone takes this this charge very seriously. And I don't think anyone here, you know, we have spent a lot of time in the last few weeks just getting together as a group talking about this and understanding it and really understanding it. So, if anything, I hope that's the biggest message that we can put out there is that, not that you don't either but I know for the six of us, we take this extremely seriously and we want to just make sure at the end of the day when we vote where we're all comfortable with what the result is. I couldn't agree more and, but I do, I do want to say that I hope you're not thinking of this as us and you know not because because that that shouldn't be the case at all we are not. I mean there are six Union representatives here and six other others, but it's not. It's not this group and this oh no that's that's that's not okay if that's the side I mean that's not the sense though it's just us getting together because you know we just, we have different, you know we have different views on things and I you know with Andy and Eric. They all have different views and I have right so it's just kind of us understanding each other and knowing where we're all coming from and making sure that you know we understand where you're coming from and understand that we're all heading in the same direction. And I would hope that those conversations would be part of this group of where we're coming from not, not in separate groups because, because if, because we all need to be here and engaged. And so I'm, I really want to make sure that we're not thinking of this as sides. Yeah, anyway. And our point of bringing up this topic this morning was to ensure that it's not separate sides that it's us working collaboratively that we're working on the agenda together that we're making decisions together that we're deciding on witnesses together we're talking about panelists talking about public hearings again as a group. And that's why we're bringing this forth because we want to make sure that that we are all here together. It occurs to me while I'm sitting here. I'm taking myself back 30 years to wilderness trip leading but it's like we're doing the norming part of group formation which is you know you, you form. And then you norm. So we're creating the norms right and then they're storming we got to look out for that. So we're moving to performing okay I think this is no I'm not sure but I do have one little piece that's perhaps a little bit of storming. So put on your seatbelts that I wanted to offer from the last meeting, which was that there was one point where we were talking about the hearings, and we were, we were discussing whether or not to have hearings and perhaps the timing of the hearing. And a comment was made about how listening to testimony when people didn't understand the problem. And I just wanted to raise that that didn't sit super easily with me because there was an assumption that the people who were may not have understood the problem. And while I totally agree that most of those, those of us who were testifying I was one of them. We're very busy doing other things teaching, etc, or in their, their jobs and not looking over the budgets and that sort of thing in the same way and with the same level of depth that our public servants in this building were. I think that there was an understanding of the problem. And it made that comment as I sat with it over the last week or two has made me wonder if we have a common understanding of the problem yet, or whether we still have multiple perspectives about what the actual problem is, and I think it might do us well to stir up some of the storming, you know, stir up some of the issues that led to the conflicts in the late winter months and early spring months where teachers and public employees felt the need to come forth and say, No, that can't happen. And, and find out what's behind that because you know from my perspective, I understand that there's a huge part of the problem that has to do with money and managing money over the next 18 years. And I simultaneously feel like there's a huge part of the problem that has to do with workforce, and making sure that we're able to attract and retain and maintain our services for all Vermonters. And so I want to make sure that we're defining the problem holistically and that we're really honoring the stories of those people who can bring us other perspectives, so that they're sitting at this table with us through us. And I think that that was part of that was the intent behind giving all the information that came from JFO, and then today is going to come from the Treasurer's Office. So that and that the our goal was, I think we talked about last time is that we will come up with a, I don't know if you want to call it principles or what but a common understanding. This is, this is the issue that we're dealing with and that we would all agree on that issue and, and I think we talked about even when, if we have whenever we have any kind of public input or public hearing or however, however that happens that we would have that available, so that people so that there's an understanding that this is what the issues are, not, not recommendations at this at that point, but just a common understanding that all 13 of us have that this. These are the issues we're dealing with. And so that we can, I believe that's what we talked about last time in coming up with that and that was so we've been trying to lay the groundwork for, so that we all have a better understand, and there, there is a lot of misinformation out there, and by in in, in the workforce in the legislature. I mean, there's misunderstanding of what the issues are right everywhere and misinformation so we're trying. I think that that was our goal in having laying the groundwork here so that we all had a common understanding and agreed upon that Yeah, and that's, that's a perfect goal and I just also want to acknowledge that, you know, for myself I'll speak for just myself, you know, I can get triggered when I think about the recommendations from house gov off last spring, you know, I can get triggered and I have to do my work and say like yep that's behind me I'm moving forward, you know, and I think that's possible, possibly there for other people as well and if we can just own that that elephant is potentially in the room that will help us become a team that's moving forward, you know. Yeah, I think that's why I think that we need to. Everything is on the table. Yeah, everything. But we have a common understanding but that whatever recommendations have been made by anybody in the past are going to be on on the table and the recommendations from 2009 and recommendations that Dan wants to throw out or Kate or whatever, wherever they come from will be on the table, but I don't think that we should lock ourselves into into responding to something that has been put out before. If that makes sense because some of them may be the same some of them may not be the same will that's for this these 13 people. And we're downstream. And we're downstream, you know we're moving forward. Right, right. Yes, so whatever, whatever happened before is back there and you know you've made trigger responses. Hopefully we could take a deep breath and say, Okay, I got it we're past that. That's really refreshing to hear. You know I think that dovetails well with kind of what I was saying about creating this space for our own work and our own recommendations. So in terms of, you know, coming to a common understanding of the problem I think as a as a task force we're going to have the responsibility of laying that out in the report that we put out at the end of the day. So that it is so that people can digest that. I think that's a that's a great goal. Anything else about. I think one final piece of this one might be slightly silly but yeah I'm so my class is silly is good. That's how I operate at school is very important. I spend the first six weeks and really throughout the rest of the year in my classroom setting routines and expectations and rule creation together. So my perhaps silly question is, I'm honestly not sure how to refer to everybody at this table what would everybody like to be called. Yeah. John. Dan is fine. Of course, I prefer Andrew. Andrew Michael. Good. Good. That was. Thank you. Yes, because I've noticed that some people say, Senator parent or Senator white and I just, I think that we need to think of ourselves as 13 people instead of any type. I just finally learned to. Well, you can say it under your breath. Okay. Good. Thank you. Thank you. That was helpful. Thank you. So now, let's look at the RFP here that we have to for our future work. Let's see there is a draft of a letter to the Treasurer's Office just asking for more information. So do you want to go through that. I'll go through it all the way through. So I worked with legislative council joint fiscal office and also with Michael for the Treasurer's Office and putting this letter together. So it identifies the scope of work. And I think at our first meeting we all agreed that we would use a Segal group as the actuary for the task force. So this just identifies the scope of work. It doesn't have Segal starting to initiate any of this work at this point that will be up to the task force to decide when the work begins. But this at least identifies for the Treasurer and for Segal, the type of work that we want to go and that's listed in the second paragraph in the numbered order one through five, which is tied to act 75. I'll just go through it quickly because that's the key component of the letter. The first issue is the cross subsidization between the service groups and just so people understand that issue there was a study done by the former actuary in 2009, which may be accurate but indicated that there was subsidization by group act to all the other groups that make up the service. So that was at least the information at that point in time. And so part of act 75 requests that we look at that issue. Again, do we have access to that? Did we get that? No, I have a copy and I can make copies for everyone. Yeah, you know, it's, you know, in talking to or actually emailing with Michael the other day, there doesn't seem to be any basis for the contribution levels for the various groups that make up research right now. So, I mean, that's something to look at. I mean, they're, you're, and I should also say there's a lot of subsidization and pensions. It's a lot of mortality. Somebody who dies at 65 is going to be subsidizing somebody that dies when they're 95. Sure. So subsidization is not necessarily a bad thing. I think it's important to understand it and that there's transparency around it. And I think this is one area where at least some people felt that there wasn't a lot of transfer. Absolutely. So that's the first issue. The second is various possible changes to be serves and be serves pension benefits contributions and retiree health benefits. So without us, you know, we can come up with any recommendations we want, but unless an actuary actually looks at those and analyzes them, we will not know the costs or benefit to them. So obviously if we come up with different recommendations to change benefits or contribution levels, we need the actuary to determine how those impact the two pensions. So that's the second one, various methods of amortizing be serves and be serves pensions and retiree health retiree health benefits. So currently, the pensions are amortized and I think, you know, Chris root from GFO explain how they're amortized. There are different amortization methods. And so that may be something that we want to take a look at right now the amortization increases by 3% a year until 2038. So, you know, that is something that is just one method of amortization there are other methods that pensions can be amortized to and with respect to retiree health benefits right now that's funded on a pay go basis. So there is absolutely no amortization, though the Treasurer's Office did prepare two documents that we can show with you with respect to how you would amortize that which is how we go about pre funding. And John, yes. So I think that relating to the unfunded portion of the benefits not the benefits themselves. And maybe just add that in for clarity that it's amortizing unfunded portion of the benefits retention and health benefits. It's the amortization schedule determines what our ADAC payment is. It's, it's Chris correct me if I was it's it's amortizing the normal costs, plus any unfunded liability. There's an element beyond. Yes. I think what Michael was getting at is the unfunded liability is the part that's captured in the memorization schedule the normal costs. That's how good. So just the distinction between the two. It's really just for clarity if you think it's clear. Okay. I think Eric Eric go ahead. A question as well. The funding policy number four. What do you envision that capture. Well, that would look at everything. But, you know, if there we did decide that there was new funding sources, or different ways of paying for the pensions, such as the, you know, changes to benefits changes to contributions changes to the way we pay it. That would be looking at the total way we would fund it. I think that if you look at some NASROS information that is one of the things that, you know, they suggest that if you're making significant changes to pensions that you look at the overall funding methods. So this would also capture the impacts of one time dollars or new revenue dedicated to the pension. Okay. So I'm just, should instead of funding policy should funding sources should that be would that be that I'm more clear. I don't know if that's what you're getting at well it's it's not just the funding source. It's just an overall funding policy. Okay. Of how you go about funding a minute and it's not necessarily just looking at say money or one time money. We're looking at the overall way of figuring it out. And that includes like, you know, how does an amortization schedule impact funding. Sure. Because if we were to propose changing that that would change the way we would be funding. Sure. Absolutely. Okay. Thank you. Then the final one is the impact of any prefunding arrangements for OPEB. So that's just that was added by the Treasurer's Office and you know that's just, you know, again it's looking at how you amortize. How you amortize retiree health benefits and what the overall impact is to funding those. Make sure we capture that. So those, that's basically the scope of work, obviously this task force would have to come to agreements on any of these. I will have to say that with respect to the cross subsidization issue we don't have to necessarily do any work there that would be something that we could just ask the actuary to look at because that's looking at existing data and not any recommended changes. So that's something that we could start earlier than some of these other things that we record work from the task force. So I just the rest of it just talks about the timing, and then the amount of money is 100,000 up to $100,000 and just to make sure people understand why I picked that number is we have an appropriation of $200,000 for the experts. So I basically took half of that amount and put it there and so if anybody has any concerns or questions about that. That's why I highlighted it in the letter just so people understood why there was there. One question since one through five kind of outlines things were more specifically is there, would there be a good reason to add six one of, or various other topics that arise, or will this limit us if we just have these five on here. So that makes it various other topics that arise. I mean, you know, that's fine. Everybody still okay with this the way it is then and any other questions or concerns. So with that change, is it okay if the co-chair sign this letter and thank you for doing the work. Oh no problem. All right, so that was the easy. So the next document is with respect to retaining a legal expert to look at potential benefit changes and contribution changes. So most of this is following a template that were required that the state requires this fall with respect to the RFP. And so the dates that you see in there are consistent with state contracting. It will take a while for us to hire a legal expert as you can see the due date for the RFP is August 20. But I worked those dates out with legislative council, just to make sure we're confined with state contracting law. The key part is actually on page 1234 under 2.2 scope of work. So this is basically advising the task force about any constitutional legal contractual issues relative to the state pension and retiree benefits. So, you know, if we were so the issues they'll be looking at is if we if we were to change a benefit or contribution amount, what are our legal, how can we legally do that. So for example, do we need to collect the bargaining over a change. Do we not. And so that law is constantly changing about what you have to collect the bargaining over or not or what you can do laterally as a state. And so that this legal opinion be very focused on providing us guidance with respect to changes. So, that's basically what that scope of work focuses on and it's very similar to what we did in 2009 with respect to the legal expert is looking at the legal issues around changing benefits and contribution amounts. And remember that the chain any potential changes that would be being looked at would come from this group. So there aren't any changes that are anticipated, right to be looked at here. We're just saying that when, if and when we come up with changes, they're going to look at it. Right. And so, you know, yeah, this will be looking at what would be needed to do beyond just, you know, we can make recommendations but you know there's a couple of steps that have to occur for those recommendations actually to actually I mean, the legislature would have to take action through passing a bill, but there also may be a collective bargaining step that has to be done before changes could actually be implemented. Yes, john question. And this is really taking a step back from the RFP, like in terms of what's on the page. Do you mentioned previously there's a small group of experts that work in this area. If we have a sense of, if we know of anyone who's interested in this work, I would just hate for the heart to go out and for it to close without and fit to not speak back to square one so just wondering if we have a sense of whether folks are going to be interested. Yes, I mean, we're seeking here a national expert and pension benefits. There are actually several law firms that specialize on this. The firm that we used in 2009 was ice Miller. They still do this work. I checked with them. And I think there's several other firms that do this I mean what we're looking for is a legal opinion with respect to changing benefits we're not looking at litigation. I mean there's tons of firms that do pension litigation but that is not what we're looking for. We're looking for somebody to analyze. Basically, you know what is illegal parameters that restrict limit us or we're done with respect to changing contribution or pension benefits, or for that matter retiree health benefits. Yes, would this firm would they be present in our meetings every time we meet or would it be. I think no I think what they would do is they provide us with a legal opinion. I think before we accepted the legal opinion could probably invite them via zoom because I doubt they will be of a lot law firm to participate in a meeting so that if people have questions about what they wrote that we can get those questions answered and if there needs to be redraft. That can be done, but it's in looking at the legal opinion that ice Miller in 2009. There are general parameters about what you can and cannot do that are governed by case law. And so that will just be a guide of how we can move forward, you know, can the Legislature of the State Act, doing something without negotiate or kind of do something or does it have to negotiate. So regardless of what our recommendations may or may not be. We will at least have that guidance about how we move forward after we arrive at recommendations. Thank you. Yeah, I had one question, kind of similar to Andrew's last one with adding number six. Is it customary that there's only one firm or I think I think of the medical field I go for a second opinion is there ever an opportunity where we would, or a I want to have multiple firms or have that capacity within this document anyway. Um, it's, it's, I mean, you could have multiple firms. I'm not sure. I mean you could have multiple bachelors for that point, but it's a cost issue. And it's I'm not sure. I'm not sure you get a very different opinion on these things I mean that the law is is somewhat well settled. Though it changes from, you know, as, as different cases come about but I'm not sure. I mean we could if that's something the task force wants I mean it's just it's a cost issue. Though I will say we have much more wiggle room I think with respect to the cost of legal expertise, then we do with the actuary the actuary will be expensive. The legal opinion I think the last time Michael, I think he told me it was like $5,000 for the legal 15,000 so last time was $15,000. So we would have some room in the amount that's been appropriated to get a second opinion if that's what the task force wanted. Yeah, I'm not necessarily recommending to hire to I just mean the capacity for that in the document. Yeah, I think the only other challenge would be the timing because as you can see from this, I mean we're talking about August 20, the, the RFP closes, that still leads it up to the task force to actually select someone from the group of law firms that applies for the process. So I think that would be the biggest dependent to get an impediment to getting a second opinion. But it could be done we still have a lot of time after that. I think it makes more better but I think it, you know, I'd like to work on this matter to have multiple, you know, attorneys about opinion, you know, the areas like John said that have settled I think would be common agreement on those areas. And then that gray area, I think they would just describe the level of risk, depending on the conditions that we take. And so I think I think you know, whenever we work with the council, you know, they usually set that up well and, you know, any other questions. So is the task force comfortable with moving forward with the RFP. Great. Great. Thank you very much. Thanks. Thanks. And you can see that most of them, most of all of the pages except that one are the standard RFP process that the state so anybody who ever fits on anything with the state has all of this. The most difficult thing about putting the RFP together was figuring out the dates. They would work with the task force and work with our contract laws. Great. So I think we're moving on to our next topic, which is our treasure. Pierce, would you like to join us? Put another cheer if you don't need a witness but I have a lot of foldies with additional information. You can do anything you want. I couldn't have them fall in all over the floor so you can do that. That would be very fine to do. And what we want to do here is go through the first part of the report that came out in January. And we're not getting into the recommendations yet because we're not at that point. Once we, once we get to the point where we're all throwing out recommendations, but we did not want to get caught up into that. So we're going to go through the recommendations and forget about making sure that we're all on the same page about the issues and where we are. Does that make sense to everybody? We are, we aren't going into recommendations yet, but we're, although this report does, but we'll stop kind of on page 29 or wherever that is, I'm not sure, but so thank you. And welcome. Do you know everybody on? Yeah, it would be helpful. I, as we've talked, I know that there are members of the employee groups and I'm delighted that they are included this year. The biggest mistake in 2009 was to exclude them because a lot of the work happened after the commission or committee finished its work. I don't know who's with who. Although I'm guessing right now that Molly's a teacher based on the way she presented materials. All right, so why don't we go around German, identify who we are and how we got here, maybe that would be helpful to you. Thank you. Do you remember that. I think I do. Thank you representative house appropriations pointed by actually Molly Stoner fourth grade teacher appointed by Vermont and yet. Andrew Edwards kindergarten teacher pointed by Vermont. I'm Eric Davis. I'm an analyst with DC, and I was appointed by DC. I'm Jeanette White. I was appointed by the program or the committee committees. I was appointed by Reverend Hansis, chair of government operations and appointed to the task force by the speaker of the house. John Gannon house cover ups and appointed by the speaker of the house. High school teacher. I am the one and I'm going to buy the SCA and I'm a probation officer at the spring. Dan Trottier I was appointed by the Troopers Association. Thank you. If it would be okay I'd like to try to address a couple of things that you folks mentioned in your in your conversation I think that just inform on a few pieces that there were some guiding principles and Senator White you had a great deal to do with that back in 2009, preparing a guiding principles for this and I, I can't tell you how much I, I endorse the idea of looking at those. They spent a fair amount of conversation on those and I think that that's, that's, that's a great idea. The equal representation and having folks involved in here again that was a mistake in 2009, and I commend the, the General Assembly for for making that happen. I think that's been very helpful. You know, in terms of creating the agenda again that's about getting away from that, not us. You approach everything that's been done over the past and everything that's been done. And I think that the legislature that has moved the ball is because people collaborate and work together so I want to again commend you folks for for doing that. With respect to the policies and moving forward on this I do want to respond to anticipation of your letter with some discussions with at least the teachers board and getting back to Molly in terms of the defining the problem. So I want to thank you and thank you to the teacher Mr. Horner talked a lot about how to define scientific method and the first step is define the problem so I very much appreciate that. I did want to point out and it's, it's clearly this is your commission not, not me task force not me but back in a little background ice Miller was selected and what they did is kind of do a general parameter and then responded. The individual that was I know that the VSE a employer might have been a, along with the Vermont NEA presented a their perspective at the time. That individual was Beth Robinson so I think people know her fairly well. But I think that you might want to give that a copy of that to your to whoever you select. Because I think that having that information and obviously I'm not a lawyer but I do know that the landscape is is changing as well but I think that would be helpful for them in terms of response. If you do not have that we can provide that for you. And again, I just want to say thank you for all the good work. My experience and Michael's experiences with contracts is that that one page is great it's important, and that's the crux of what you're trying to do, but everybody gets caught up with the contract terms with the stage you know whether it's indemnification liability issues so planning having a, at least a few discussions on that with whoever, especially if you're going to be dealing with attorneys. No, no disrespect to attorneys. But I think that that's been our experience and working with folks. What we think is straightforward. In those terms of those boilerplate contract provisions, but you can always appeal to the attorney general's office to, to give you a little room on those. So, again, thank you for the opportunity to be here. I did do a presentation that takes the materials out of the report as well as some other materials. And one of the things I remembered to do this time was put page numbers on it, because that's, and that was an addition about two o'clock less yesterday morning but but we do have that. So, and I do know that some folks like it electronically. I planned on that and by the way I did make copies of other documents and I made 12 copies, not 13 so Michael you're, you're going to have to wait to get back to the office, but hey. So, the agenda that I was hoping to go through. And again this is your, your task force was to go through the pinching funding status the methods how we get there. How does this all work and, and then go through gains and losses. What you know what are the drivers and the increase in the unfunded liability. A little bit about how an experience study works and what we gained from that and looked at. I'm not going to, I just have some attachments that that really come from the pick of which I'm a member but in, and I don't plan on doing a lot on investments but it's there for for your review, and then pre funding OPEB. That is a hot topic with us, we've been trying to work on that for some time, and then some summary, and I was remiss in point you know to that it's great to be here and see you all in person, including Chris loop from JFO because we've talked many times but today was the first time we had an opportunity to meet. So I think that's important. Page two, three, excuse me that you see the purpose and I'm going to try to go through some of these quickly the purpose of evaluation. You know it really is about assessing the adequacy of the system to pay current and future retirement benefits. It's all about retirement security. You want a system that will be able to pay people this generation, the next generation the generation after that, and ongoing. Intergenerational equity. If you don't resolve problems. The next generation is going to pay for it. So security comes to mind, you know and in the scares that we have at what will happen if, if Congress and the president don't act. Outputs you know you have you calculate the act the accrued liabilities actually accrued liabilities, you calculate the value of assets that differs from the market value and there's a reason for that not mention that in a little bit the funding status you know what percent is funded. That's an important piece. What is the ADEC that now folks that have been here a long time. No disrespect representative Fagan when we used to talk we'd say pay the arc pay the arc and it was a really good, good line. You remember that as well senator. I'm sorry I'm used to that that respect level there, but it's now called the accurately determined employer contribution. Just so we go through acronyms gas be the government accounting standards board created that new term. Hey that doesn't have the same. It doesn't have the ring exactly I you know I we got into pay the pay the art we were successful with that. And so far, and I want to say thank you we've been successful with paying the ADEC even if it doesn't have that same ring to it. I identify some of the losses and gains and review that within the context of the authority the amortization period getting to some of your concerns about that. So those are the types of things that evaluation will do they're taking a look at the long term sustainability of the fund, they're giving you the measures and where you are. And they take a look at the funding policy and that's a more narrow approach from a from an actuary. They're not going to tell you how to do things they're not going to say you should do this benefits on there. They're calculated for you, but they're really looking at the adequacy of how much is funded and how you fund that and how you amortize that over a period of time which is actually in the purview of the general assembly. We are in a closed system and I wanted to get that across to folks. There are two ways to do valuations the first one is an open and you really don't do that because it creates all sorts of nuances and problems with it and an open, although we did that representative in Copeland Hansen and representative Gannon when we were in that risk assessment back in 2019 which really is a precursor to where we are now. They did an open valuation to say what's happening now and what's it going to look like with some of the trends. When you do a valuation, you're looking at a closed valuation what does it look like as a June 30 so it's essentially a snapshot at that period of time. And as I said it's done annually. I've struggled with how to present you know what what how this all works, and so I've done a little bit of reading I've cobbled together here so I want to give credit where credit is due. I want to include some of their, their valuations and their, and their reports and other states tutorials, as well as GRS which stands for Gabriel rotor Smith another actuarial firm and that piece in the middle really comes from them. And I thought that was pretty, pretty helpful. I have a sample here hired at age 30 somebody comes in. I'm 67 so if I were to start you know I'd have a different scenario in terms of probability of retirement than someone who's aged 30 or somebody that comes in. We see a lot of teachers that come in mid career for instance so they're going to be different decisions and probability so what's the probability they're going to reach retirement, are they going to leave before that. I would naturally estimate that, based on characteristics of the census the, whether it's age whether it's turnover that we've seen historically consolidation at 46 had an impact on that we tried to give them information about what happened in there and folks that were in different schools and provided, provided that. So when will the member retire, you know at age 30 you have different options. And so you, I'm already past the normal retirement date but I plan to stay here for some time so just for the record. But you know, and so you're going to retire with an annual benefit, what does that look like are you going to retire early retirement he's going to do normal. And how much is that benefit going to be. And that's based on again these are all based on assumptions, what the salary increases will look like so they're looking and saying, you make X now. And when you, you know, get to retirement, you're likely based on wage scales, something that's called productivity which is looking at gross domestic product and what's happening and in different areas that impact the, the productivity of the workforce. They're going to take a look at cost of living patterns that the state has, and they're going to put some assumptions about what that benefit would be. And there's obviously inflation to that I always use the example I'm, I'm an older person. When I got out of college in 1976 I had a job that was $13,000 people said wow how did you get that you know it was pretty good. I don't think I'd be working for $13,000 now, and unfortunately by the way some people do. And that is a travesty in terms of income and, and what happens in terms of people in this state. And then how long are you going to live in retirement that has changed over time. So what we do find that people are living longer, not as long as some of the mortality tables that the Society of Actuaries came out with and that was one of my discussions with that at the time I knew table came out in 2014. And then they've had updates every year since and those updates said yeah they're going to live longer, but not quite as much as the first one so we've tried to grapple with that. As we're looking at the impact it has on the, on the act on the actuarial results. So take all that information they do this for every single person, and they create a range of probabilities because that 30 year old or myself, or that 40 year old. They're going to be different options that they have so they create a range of probabilities so, for instance, I would be in there split over a different period of time for different probabilities of what death is going to do. And then more at, at certain certain assumptions, they aggregate that up for every single person in the workforce. And then what they do is they put that in a what's called a projected value of future benefits, the normal cost the the actually the liability that those individuals will have, and then they look at assets. And so what assets are available and those come from investment earnings they come from employee contributions they come from employer contributions. And I will say that employees have stepped up to the plate, since 2010 and are contributing more, and it really worked hard on this. As we're looking at some painful decisions we need to recognize that they've been there as part of the conversation. And then you produce these results which I had on the previous page some of the results. Page five, and I'll try to move a little faster as we move on but page five is just what that looks like in terms of accrued, actually accrued liability. What is it going to cost for those present and future benefits. And then what is the normal cost and a normal cost means that if I was hired today, you would not have any past service costs for me that part of the liability. And what it would cost each increment each year divided up what are you going to need to put aside so when Beth hits that retirement, or when that 30 year old hits that retirement or when Eric hits that retirement. What is the amount of money going to need to put side each year to make that happen. And then with with those future normal costs will look like this is all done on a present value basis, taking a look and saying what are the dollars you need in today's business to make that work. And so, just wanted to explain that as we move forward. Any questions on any of that. I like the GRS piece because it put it into a human context on how does this all work in terms of decision making and it's a lot of work. Just the key points and I'll try to go a little quicker to the different sections, but so I try to put some key summary points at the front and the funding status is deteriorating. The unfunded liability is growing in both plans. The cost of the ADEC is also growing in the teacher system that is funded by the general fund for the most part there's a now a piece that comes from locals we put that in place. I'm trying to remember about 2014 2015 where they would, if they're on federal grants that they would reimburse the the the state for those dollars that are being reimbursed by the feds and transfer those to us. The general fund pays for most of the state piece. There's a the the the state system visas. It's about 36 to 40% of it 30 and then the other cost centers so whether you work in transportation, whether you work in human services and you're funded by federal instance, and I did not bring the figure but if memory serves me correctly someplace about 23% of the dollars that are required for to pay for pensions is reimbursed through federal government, whether it's in human services or transportation. I'll confirm that number. But that is, it's something in that range. It's a historical growth in the liabilities and in our report. We identified that the increase from 2021 to 2000 and, or excuse me the 19 val to the 2020, the 19 valuation sets the or the 20 sets the unfunded liability and it also gives you the recommendation for the ADEC it's just timing in terms of when this is done, and how that impacts the appropriation process. So an increase of 604 million and an increase of just under 97 million. I have a question. So that's one of the first question I asked, when we started this, it's happily identified all of the problems that are causing the deterioration in the value of the assets and in the capability assets actually. That's a, that's a very good question. And I know that, you know, we've done an experience rating, we have done what we normally need to do. And I'm asking a question that may not be answerable 100%, but I'm asking your best asset, have we identified all of the problems that are inherent in this fund so that we can then address them. So, we're going to get into a little bit more of that on actual gains and losses but to answer your question which is a great question, you're not going to be able to anticipate everything these are estimates actuaries prepare estimates. The rate of inflation for instance has been going down down down down. And the CPI you northeast is what we use and calculating benefits this year and you see that in my presentation, it's up over 4%. And the security uses a different CPI index, and they're talking someplace north of five. That's some of it is related to our coven and tent up demand. I, I'm not an economist I frequently say that I think that this is a longer term piece that's my non professional opinion of this. I don't know what year, but it's sort of like the, you know, the stop clock there, but they can't predict that in economic events no one could predict the great recession, or coven. The, when I, one of the charts in here that you see on investments is the, the Asian markets that impact in this Brexit, certainly, none of us voted for Brexit. You know, and to this day I'm not sure how that all again I tried to predict before that and I said that's never going to happen. I'm not very good at those predictions the last time. I know this is a serious issue but I'm going to say it anyways the last time I got an election right with McGovern Nixon and I didn't vote that way, but those are events that you can anticipate. But there are things under our control the national events inflation national policy, those are not things that we can control but local state issues we can. And one of, and you see this later in the presentation one of the issues that has eluded us we brought this up in just about every report that we sent over to the General Assembly over the past several years is workforce issues, particularly in the teacher system. If you take a look at the turnover in employees if you take a look at the, the retirement experience. It's about 37% and again I'm doing this from memory there's a there's a number in here we'll see how close I got of the of the changes in the increase in liabilities. The way I've described this to the past and testimony over the over the years is, you know you have property tax pressures you have different pressures you have new policies around schools and reorganization. As you press the balloon at that end. We put it the other end in terms of retirement and its impacts there. And the trick of this is to take a look at the whole cost we look at it in silos, we look at the impact it has in terms of property tax and property tax relief or whatever it might be. And then we don't look at it and make the link up to what the impact is on the pension system. And my belief is that there needs to be a holistic look at that. We've testified to that effect over the years, it's a tough one to get your arms around. But that was a big issue representative Fagan. The other is the decisions we made while we stopped the process of not funding the pensions and started pay the arc pay the arc. We continued on to 2015 to pay for the health benefits and the teachers fund out of the pension system, and that added over $100 million the unfunded liability. So there are things in our control, we should identify those and look. Now, I'm not going to get into the, the property tax debate that's not my job, and I'm not a workforce expert. But the reality is that you need to take a look at it and define getting back to Molly's point again, define the problem, and then look at what are your decision and policy decisions that you may want to address there. I'm going to talk about this more and you're going to say you just said a whole bunch so how much more you're going to do but we'll go there. Oh no no no it's a great question, and it's great context as you're looking at this page seven is the funding status and it's really made up of a couple of things and one is the status of the pension liabilities do you have assets available to meet those and that's the bottom line again retirement security is what this is all about. We want individuals when they get to retirement to have enough income and to have a fund that's there and not a fund that's deteriorated to the point that there is no security. I read a report recently about the increase in elderly bankruptcy and poverty, and I think that you folks should talk to AARP about some of that, and that's a travesty. Again, and it hits Vermont even more because we have an older population. And I think that we need to take a look and say what are we looking at in terms of security for those individuals down the road. And are we contributing as the employer and the employee contributing the plan at the recommended rate you know are we funding the ADEC. We are now. We didn't in the past, and again as recently as 2015 and the teachers there was some underfunding, and is there a plan in place to deal with the unfunded liability that amortization that date, and is it doable. And the answer is, well you have a plan in place to retire this. And the question is, and Chris and I agreed on this number is that you're going to need to have about $500 million, $500 million in the in the late 2030s 2036 that 78 to pay for this is that doable. Now if you put that in present value, it's not that much of an increase. But on the other hand, the state budget is not increasing at that same level. So, is it doable. And is it going to be a point of tipping point we say we can't do this. And we want to avoid that tipping point. Sure. I don't know if the answer right now or not but number one. How are the percentages, you know, I contribute, Dan Trotter is going to contribute x percent. How is that how was that or how is that number determined. That's a matter of policy. And, and frankly, the legislature sets the benefits, including with the contribution levels. Now, the boards do provide recommendations. Sometimes they're, they're, they're taken sometimes or not, you know, Senator White, we've talked a lot about, we're actually involved in a task force right now, or work on who belongs in Group C, who doesn't belong in Group C. Ultimately, the General Assembly is going to make those decisions. So the General Assembly is the owner in the creator of the solution, we're going to provide information, but it is the General Assembly that's ultimately going to make the decisions, presumably with the governor and you know that we don't get to a point if we have collaboration with it would be potentially veto you set the benefits. Excuse me I'll look at you to you set the benefits, you set the funding policy and you appropriate the dollars. We provide background. We act as a, as a conduit for the boards boards meet generally monthly a little bit more than that so we provide support to the boards and the Attorney General provides legal support to the boards, a board of trustees who are fiduciaries to the fund. Does that answer your question or did I just. Yeah, no, again, I know one of my questions is coming. And I apologize, I have my kids gave me a sticker on my fridge he says I can't math. So that's where I'm coming from so numbers. When they say hey you should contribute you know, Dan Trotter should contribute this percentage Andrew should contribute this percentage. Where does that number come from. And that was one of the things that I had one other question and I don't know if it's possible to get that but is it safe to assume that if, and I don't know how often the actuaries, we have the actuaries doing their thing but if they said in and I'm just going to use 2019. It was this and now in 2021 it's going to be this. Is it safe to assume that they made changes to their calculations and if so, are we able to understand what changes they made so we can understand okay why did this number go from here to there. Again a good question. And there are two ways that that happens one. Again, if you go back to that first page with age 30 their assumptions how long is it going to take for what what's the probability of a retirement how what's the benefit. Those are assumptions that are built into the valuation they aggregate that up for every single employee. They're in the valuation report are done annually and there's a chart in there that says, these are the assumptions, and this is how much you varied from those assumptions, and we'll have an exhibit in a little while that shows you that. In addition to that, if the assumption is off, you true it up and you true it up to an experience study, which we do every five years that's a statutory level that's what happens as a general practice across the country, but I think we agreed and we agreed and frankly the the general assembly has changed that to every three years so I think that that's a good move, but you want to true up your assumptions doesn't make sense. Now, again things can change from there inflation being a great example and I think inflation is the biggest risk, because it impacts so many different pieces of the assumptions, whether it's investments whether it's cola, whether it's salary growth, and as that changes that has an impact. So having more frequent helps, but that's what you do you true up and you and hopefully make the appropriate changes for the assumptions change, but to the extent that they are supported by any actions by the general assembly that those happening and not in the same process. Eric has a follow up and then I have one as well. Thank you. I have a question on the plan to retire the unfunded liability and how it relates to the funding steps. Especially considering our charge includes looking at the amortization schedule. Now, hey, the legislature has been paying the ADAC for since 2008. But the ADAC is predicated on each subsequent payment increasing by 5%, the beginning 3% in the end, when that was agreed to you know I think people said it's going to get worse before it gets that turning point until payments to a point when you're actually paying down unfunded liability, paying the ADAC and paying down unfunded liability, not necessarily the same thing. So there, do we have a sense of what sort of deterioration in the funding status was planned versus unplanned because there are certainly other pressures that have brought down the funding status. So we do not foresee when we reach the amortization. Just something to keep in mind, think about the amortization schedule. Absolutely. I interrupted you so if there's more to the, to the comment or the question I apologize. The question of how much deterioration was planned, how much do we expect versus how much was on. So I look at an amortization schedule as a mortgage payment the analogy. Now at the end you own the house. Hopefully here you own retirement security. But it's so it's a period over time and depending how you set up the mortgage if you do it in 15 years. If you do it in 30 years, if it's back loaded interest only at the front, you get different levels of interest that you pay. At the beginning of a mortgage you're not seeing the principle, in most cases of the, of the, of the loan essentially, going down because you're paying interest. And if you look at the amortization tables that are in the actuarial reports. We'll show you the same thing that over time you're paying off interest at the same time is gross in terms of the liability because you're paying interest first, and you have an opportunity loss on that because in terms of paying down the unfunded liability. Now, as assumptions have changed, and as realized gains and losses have changed that schedule changes back in 2012, I think our estimate was that it would get worse, just as you said, but by about 2021 things would start to get better. So things didn't work out that way. Okay, and the actuary as we change this change assumptions and as we change as real behavior and real gains and losses interact with it, you're going to see a change in that it is back loaded. And that was something we changed I believe in 2016 with the General Assembly. The office pointed out that the interest you're paying is pretty high because it's back loaded every year it increased in 5% increment so you're looking at this, you figure out how much you have to pay with the interest and it's back loaded. We asked you folks to make it 3%, which is a little closer to inflation. So that seemed a little more reasonable. I think we should look at on that and that's saved both systems $165 million of interest, and that saved the taxpayers $165 million of interest. So looking at that how much is a balancing act because when you change that that meant you were paying more upfront, just as I said when you change a mortgage, but I think it's something that you do want to look at. I would caution that you do not want to just kick the can down the road, because that costs the taxpayers in the form of interest, but there are ways to take a look at it. The actuaries and our risk assessment reports which again represent again and we were part of that process. As, as we're you Sarah I'm sorry I just did that. Okay, I can't get Copeland hands us out at the same time so I get tongue tied. Okay, what can I say, but I think that there are ways to take a look at that, but just using that and saying that just puts the problem out the road. Government Finance Office Association did a best practice and what that means is you're all you're kicking it down you're costing more and you're not solving the problem. The rating agencies do something where they call above water below water. And if you keep doing that. You're essentially below water and you're going to stay there. That's a good follow up. I agree completely with that. We've done a lot of work building up. We don't really want to see that is there are projections from 2008 when the previous immortalization schedule was was was formulated. If those could be shared with the community. Absolutely. I will try. I tried to do some of this because we we want to make sure that we don't, you know, blow through our actuarial budget very quickly but we can pull out the tables. I can put something together that looks at some of the assumptions that push that, and then I will run it by our actuaries because, you know, I'm not an actuary. I can do some of the front work, and then let them take a look and say now you got to change this you got to do this. I'm going to try to get you something to get to that effect and, you know, I've, I've said that Eric, and this is a compliment that you're a bit of a actuary want to be, and I consider that a compliment so it's a very good question. I'll take it as a comment. If you take a look. I'm sorry. Sorry, representative. There you go. Quite all right. I had a follow on to the question that Dan was asking before, but just wanted to also put out there that while the legislature has determined the benefits and the contribution levels. The other part of the equation, which is the demographic assumptions and the investment returns are, are completely out of control of the legislature. With good reason. Yes, but, but still, you know, a significant impact on the position that we're in right now. I wanted to come back to the question about about what those employee contributions are based on because it has occurred to me that that even if you can assess how much of the current unfunded liability is due to underfunding of the past. And hope for better demographics and investment returns in the future. There is still a part of that unfunded liability that that seems to be due to a system that's that was that has been changed incrementally based on, you know, the historic employee contribution levels that that might have been based on assumptions that are no longer valid in terms of longevity in terms of, you know, how, how people move in and out of the workforce. So I would just ask, do we have the ability to, to ask ourselves as a task force, what, how would we build this retirement system, if we were starting over from scratch and we wanted to make sure that today's, you know, 28 year old is going to be able to live in retirement with a predictable benefit until they're 95. So we do have historical information on what the, what the contributions are, and what share of the, that is versus the ADEC, the, or the arc in the past and we can provide that to you. Generally speaking, roughly 62% of what's paid in the, in the two retirement is through investment income and depending on the year, I mean when you don't contribute like in the teacher system back in 1997, for instance. The employee paid more of the share than the than the than the state so those contributions are roughly half a little a little more geared I believe to the teacher system that is in the 2009 report, a piece of that. And that one is a long time ago and I'm going to have to defer and take a look and we have changed some of the rates but we can get that for you. One of the concepts that you're talking about is risk sharing. And I think that that feeds into, you know, the decision making around that. And whether those are accurate. Ultimately, everything is actually neutral because of the, the employee and the employer do not pick up that and contributions. If you pick up or investments, it gets, you get adjustments to the ADEC every year so, ultimately, it's actually really neutral in terms of con combination but what share people have, and how much they contribute is something that varies from state to state, and it's some of it is public policy decisions, whether you want to. You have recruitment issues in one group for instance or, but we can get you that information but it really is a lot of that's public policy as well. How much do you believe as a as a as a legislator that that this person should be paying versus another group in the system and in the municipal system, there are separate. It's a menu you can be in group ABC or D, D is actually law enforcement, and in each group there's a different level of employer and employee costs. And those are only the municipality or the school system because over 50% of the municipal system is actually non teacher, non certified teachers. There's a separate amount to if they pay for it they should get you know they get the benefit associated with it so it's a little bit different in the state system, we call that a single employer entity. So that's all, you know, when you get down to it's all together we don't report separately on that it's a single employer, but we can break that out for you. Did that answer the question or am I going around it or. What I'm trying to understand is if we were starting from scratch right now. Would our employer employee contribution rates be what they are now, or are those vestiges of a system that was designed 3040 years ago that has been incrementally changed over time. So, I wasn't around in 1947 or something when either the teacher the state plan was, was developed, but my presumption is there was a decision about what share people were supposed to do, which would be investments how much would be employer and employee, and it was probably based on you're going to take this share of the normal cost for instance or whatever it might be. I, we can certainly take a look at what the percentages were, but ultimately that was a public policy decision you have to fund the whole thing, but who pays what is up to the General Assembly has that changed over time. And is it the, is it, is it look like what we did in 1970 or 1985 or whatever it might be. We can provide some of that information I've done some of that for the teacher system I dusted off the old actuary reports back to 1982 did some analysis and I'd be happy to share that with you. I said someone else is going to have to do it for the other two systems because that that took up an awful lot of my time. And we will delegate that to somebody at some point in time like we can talk about that, but, but we can provide that information for you. Some people did jigsaw puzzles to pass the time during the pandemic I take it you were refuting actuarial reports. A little bit a little bit but I did find new hobbies to so you know it. I now have decorative flower vases all over the house which if you look at me say that's not best. But you know at some point in time when you're in the house for a very long period of time you, you pick up new, new things to do but yes, I spent a lot of time on on these issues, because they're important. So, when I'm thinking about your question kind of. I think about it as making change incremental changes and we we built a house a long time ago and a lot of our friends built houses. And we called them hippie belt houses, because you built this little part and then you built a shed off here and then you built another one off here and then you built something off here. And so, if your original house that you started with had faults, the whole thing had faults. And so your question is, was, are we building on to something that might have been okay to start with. But isn't okay now, or might not even have been okay to start with. Okay, absolutely. And that's a public policy, you know, during testimony at one point, and I won't get into what group or and someone said, how did that happen. And I wanted to say, you voted for it. But the reality is that you also voted on a based on information you received in those discussions and has the has the landscape changes and the landscape is changed, and we know that. And we need to go back and assist. Yeah, and I guess my, my point in bringing this up is really that I want to make sure that we have fully illuminated this part of the challenge so that when we do make those recommendation decisions here as a task force that may ultimately lead to policy decisions adopted at the legislature that we're making those decisions with our eyes wide open and a full understanding. And I guess, you know, many of us were surprised to find that the 2009 recommendations didn't get us where we thought we needed to be sort of on a more sustainable track in the long term. So that may be because the 2009 recommendations were largely set aside and ignored as opposed to adopted by the legislature but my hope is that among this task force that we can that we can have a full and honest assessment and turn over every rock and understand how we how we got here as well as whether the foundation of the central, you know, structure of our pensions is, is or was ever sustainable. So, I guess what I would say to that is, I think that more recommendations were done than, than that have been characterized in this. I don't have the report in front of me someone has it the 2009 report, and I'm doing this from memory someone can test me. There you go take a look at page six. If you if you want to hand that over to me I think I can answer that. Yeah, let's make sure we don't go too far down. Sure, thank you. I believe that, and I guess I do have the wrong page but we'll work that out. I believe that the recommendations were at a much different scale the teachers. I think at that point in time was someplace in the $60 million and we were trying to get it down into the 40s. I believe the recommendations that the actuary put together with someplace around 29 $30 million I was hoping to find that I thought it was page six but I know it's at the front end. We did 20 million out of that 29 30 million of recommendations now they came after the fact you know through that different discussion. It was different, but there was a percentage that was was acted on since 2009 and 10. The real increase in the workforce issues and the teacher system exploded in 2011. So I think that that's some of the piece but the scale of this thing back in 10. I think they pretty much did their job. The problem is getting to your point. Assumptions and real life change since then the investments have changed. You know the rate of inflation again. The, the workforce issues and I keep talking about the teacher issues but they're there in the other in visas as well salary expectations. The teachers were like this the salary expectations that are in the, in the valuations up to now that the pre up to 2020 teacher salaries haven't kept pace with that. On the other hand in the state system, don't get mad at me. They've exceeded that. So you have to look at the assumptions. I would also point out that there's a fundamental issue here which is assumptions are a guidepost there to help you develop your plan. In reality, it's real experience that counts. And at the end of this thing when you get to 2038 or whatever you might end this thing, it's going to be based on when people retired, what were the investments what was the rate of inflation what was the cost of living, not what we estimated, and I see some actuaries call it a guess, but what we estimated back, you know in 2009 and in 2010 and 11. Thank you for your time today. I have one question I remember I think it was in one of the services presentation that the fund that says actually was on an up tip. Maybe 2018 2019 and then the assumed rate of return one from seven and a half seven percent, which I think that started to lower down. And thinking back to Eric's point about having it get worse before it gets better roughly than 11 years into it, things started to appear that maybe they were getting better there before changing that assumed return. So maybe the system and recommendations from 2009 actually were working and we're getting us on the right track for the changes. So right at the time, they, again, events changed economic events change economic cycles changed, as I said, Brexit different, different, different economic events, as well as workforce. That gets me back to the presentation so thank you Andrew. And if you take a look at page nine. This is the state system and we provide this in our annual report every year and in the various reports we do the committee. If you go to 2007 in the state system so right in the, this is the unfunded liability where it is you see that the state system was in surplus that negative 11 million and the funding status means that they were over by 11 million dollars that was 100.8% not 108 100.8 very fragile, but it was there. And then a great recession hit and you see those numbers grow fairly substantially. So before 2007, you see some growth in the state system. And again, you learn surplus 2008. Most of the great recession hit in the latter part of that year, you know the September of 08 which is part of the fiscal year 2009. So you see these downward trends, we expected it to get better and for, you know, for, you know, from seven, you know, a little bit. But what you see is the continued degrading of the numbers. And some of that we said, we got to take a look under the hood and find out what's what's going on that's part of what you're doing today, but the numbers have not improved in fact they've gotten worse and taking a good look under the hood with those issues that are we've got a piece on that a little further down to go to the next page the teachers and well, let me just so what I did on page 10 was just show the liabilities growing with the unfunded liability look like and and how that that increased over time. You see in 2010, when we did a few fixes that went down a little bit, but it didn't hold. So the next page page 11 is in our report and this is the scope of where we are now. We're talking in the state system about a $225 million increase from 2020, 19 val to the 2020 val which again affects the 2020 budget. So we were looking based on a mandate from the retirement boards to provide a recommendation to you on how to bring that down to the 2019 levels. And if you recall, representative Gannon in our 2019 risk study, we were looking to lower it past lowered even further trying to lower it from the 2019 val. That's behind us at this point in time. You know, we're concentrating right now on trying to get to this and the change in the ADEC was $36 million. So to go to the next page, we have the similar pages for the state system, a teacher system, and you see that a similar pattern that 2008 and beginning there was a tough time, you know, getting into the 60s. Now I want to caution, and you see that little arrow on that and reflects a different actuarial method. This was a little mind boggling to me I was a deputy treasure at the time. We won't get into who said what but you know they put in a very small amount into the into the into the ADEC versus what the the actuary said and I looked at Jeb Spaulding the treasure and said boy what did they see next year's number it's going to look horrible. And then it didn't change. So I'm saying, why. Okay, and started to dig, then called called our actuary. And what happened was the state had a in statute and I don't know I think it was in the 80s that someone came up with this idea and it was called frozen initial liability. I know I'm getting into the weeds but give me a moment. So we had an outlier actuarial method. And what happened is, it froze the liability so no matter what you do the liability was going to stay roughly where it was. And then everything went into the normal cost. So you still had that increase in the arc. Now the ADEC, but it was masking the real unfunded liability so when folks say, we were almost there, we weren't. A couple of pages in because I was trying to stay with the graph process so if you go to page 13 you see the same graph that you saw in the teacher system and you see the same goal, which is at $379 million increase in the unfunded liability in the $60 million that both of those total up to the $604 million increase in unfunded liabilities in the $97 million bogey. But if you go to, I just explained page 15 so I won't do it again. That's that that odd methodology. If you go to page 16, and these were in the 2005 report to the legislature. If you take a look at it and you can't go back those are those were what it was, if you take a look. I'm going to go back to 15 because I'm having trouble reading those small graphs. But the, the, it distorted it and the cost associated with it. So under the new method the method that's correct. The method that's a standard for funding purposes and is the standard by gas be for accounting purposes, the unfunded liability in 2001 was not 93.8 million. If you use the current method it was 315 million. And if you take a look at the funded position you'll see that that that 92.3% is actually based on the same consistent methodology 81.1. Now the reason that's important if you look at that graph in the upper left, you see that the red line is the actual contributions, and the blue line is the is the actually recommended contribution you see the variance between them. And you see the decline. If you use the EAN method. So, the reality is that the numbers back then and I remember one person I'm not going to say names and well we didn't put as much in, but the number didn't change so we'll worry about that down the road. It did change. You didn't measure it right you know, an analogy that's been used in the past is that if you go to the doctor's office and the blood pressure machine isn't working. And they take and you say, and you, and you know they take that and they take your, your pulse and everything. And you go home the scales not working. And your imperfect health, you know, you, you, you might have different habits than if you knew it was higher. And this is part of the problem in the teacher system that the methodology that was in statute. We immediately recommended to the General Assembly that that be corrected and you folks did that. So, are you folks today. Yes, sir. But the question on the past underfunding. Clearly it's been more prevalent in teacher system. More of it had more of an impact there, but understanding that the state system was fully funded in 2007 with the assumptions at the time. That doesn't mean that all the contributions were made, you know, maybe if we were 180% funded, we would have been able to withstand the shock from a greater session. So that I have not seen the I've only seen the been able to find the contribution histories for the state system maybe back 15 years or so. If, if that is available to the try it is, it is, I think that would help. I would say largely the state received pretty close or or the amount. And the way that the state does it they assess it as a percentage of payroll, and we tend to underestimate the payroll so in many cases the state actually had more than 100% of the contribution. The, the difference, again, is coming into the great recession and then some of the assumptions again salaries are different than we expected workforce changes the retirement incentives in 2010 and 2016 are mind boggling to me. There was a, an assumption about how much the unfunded liability would go up and how much the ADEC would go up, but it would be offset by operating costs and number one again that's that same property tax pension equation. I don't remember the number of Michael but with something around 100 positions vacant after the 300 or so in between 2010 and 2014 of the state added 543 positions. I remember that number because I talked about that many times. Now, I'm not a workforce expert. I can't tell you whether you needed those positions and not that's not my job. But recognize that when you do those things now you've increased the normal cost. And when you now change assumptions that's had an impact on the unfunded liability not when you start it's a normal cost but when you change liabilities, and you have these people in for that period of time. You know it has some impact on the overall health of the plant. The bottom page 16 here it shows 2001 to 2005 looking at the actual recommended values versus what the contribution was worth. Do we have the historical data pre 2001 also up to 2008 believe this 2008 when the ADEC was being funded again. Yes, sorry again is do we know I get excited about talking about this. So, I'm not happy with why we're talking about it. But it is a topic that's near and dear to my heart but it's also, I don't want to understate the seriousness of this it really is and now I stopped interrupting you go for it. So students out there numbers are fun people enjoy talking about that. So, just thinking about that we have an actual dollar amount on the underfunded amount in the teacher system, and not just the dollar amount but the lost opportunity cost of investments and returns. So the chart on page 16 has two pieces one was the difference in the EAN and the frozen initial liability, we did not go back further than 2001 on that because a there's a cost and we wanted to get to what the sense of the funding issue. The difference between the red line in the blue line are on page 18 of the package. And you'll see and I highlighted in yellow and put in red. The serious levels of underfunding. And the, we can try to calculate that there's a little bit of a nuance. One of the folks that talked at the public hearings I said, I don't know if he's a math teacher or not but he should be. And he took a look at the interest rates at the time and calculated that. But there is a little nuance there as well which is, when you do the ADEC and you haven't calculated and the gains go up, you now amortize that over a period of time it's sort of like a home equity loan on top of your mortgage. Okay, and as a consequence, some of that is being repaid but it's being repaid in that mortgage over time. That's a little more difficult to calculate. We can have a conversation and folks think that that is worth it. In terms of your decision making process but it will cost you some money. And I'm going to see that it's a really important piece of information. When you're trying to put together a puzzle and you're missing a couple of pieces. It's a little frustrating to. Yeah. And again, we are. And I do want to get back to a motion that this teacher board did on terms of the interactions between you folks and ours with respect to the actuary. I can do that. Perhaps after we take a, I assume you're going to do a break someplace in this because you don't want to listen to me for again add on and add on but. Thank you. Okay. We're going to do, you're going to do best with that okay. Thank you. I'm going to talk a little bit more about the impact of the salary expectations or assumptions on the end. So an actuary will take a look at several components when they're looking at the, the, the, the salary as well as cola and the like and I'm trying to find the page in the presentation that will help with that page 24. And economic assumptions are interest rate salary increases payroll growth. As you see the inflation is a big factor, and that number is suddenly changed post coven words, you know how long it stays with see that productivity is, is taking a look at the levels GDP and so on and with the, the, the increase in productivity and with the increase in salaries are nationally, but you see that payroll growth, and they make an assumption they make assumptions about cola they make assumptions about salary increases and not just payroll growth, which is that productivity side in the GDP but what is this career the salary scale. What is the, again that productivity that that piece there which is. I'll try to give you a better definition of that down the road I've been trying to put that together with different actuarial interpretations of an inflation. So there was a scale that's built in, and in the actuarial report you see that scale, and it's by, it's by ages and it also has by when you started for years of service at the front end at least in the state system, you have more raises or more step increases at the front than you do at the other end so it takes a look at all that and averages about in the teacher system. Those assumptions have been made in the teacher system from 2011 to 2020, the actual salary changes for teachers has been less than that. So actual I was paid more No, I guess what I'm saying is, is that it's an actuarial game, because the teachers did not have the same increases in in salary that were the assumptions. Now again, I don't know how the assumptions make sense to public policy at the local level of how much you should be paying a teacher. And by the way, I think teachers do a fantastic job and, you know, along with social workers and a number of other at, you know, tough positions on, you know, I, I, I like teachers what can I say they have an incredible job and they make a real difference in the in future generations in terms of citizenship and, and their ability to be part of the economy, as do all jobs, I have a real high respect for public service. But in the case of the teacher system, those salaries increases were lower than the expectation and the assumption in the state system. They were the other. Okay, now that doesn't mean that collective bargaining on the state system created a bad result. I'm not an expert on workforce, and I'm certainly not an expert on what the prevailing rate should be. But based on the data that the actuaries had, and based on the best estimate, they put in salary assumptions and there's variations against it. I was kind of interested in that because if the salary changes were lower than expected, you know, like Kate was saying that means that less money is going into the system but it also means I guess at the other end that retirees had a lower final three years and maybe that takes precedent. That's part of it and also shout contributions go to the normal cost. So the employee, the formula is employee contributions go to the normal cost, and then employer contributions are a combination of what's needed to complete the normal cost that how much do you need for, for a best of that 30 year old or Michael, or any of you. Molly, how much are we going to need in terms of, you know, put aside for that normal cost. So employer pays a portion of the normal cost when you look at the ADEC. It's broken out between normal cost and unfunded liability, and then the balance of the employer cost goes to the unfunded liability as part of the ADEC. So yes, there's an interaction. You're going to have a different AFC average final compensation at the end, you know, in terms of those, but in addition to that employee monies are directed toward the normal cost. And the reason I was asking about that is because I think it, it's hard to know how any given change we make is going to affect the numbers because say for example that a teacher retires earlier than another teacher. Well they're retiring on a lower salary for the local school district that means that there's, you know, lower salary presumably have an incoming teacher but then that money that's that that incoming young teachers putting into the system is going to build over a much longer period of time. Yes. So how do we even begin to distill out how the choices we make. Okay, so we can give you examples after we finished our report. What we did is we asked the actuary to take a look and we gave them real people without their names and without their social security numbers, and we gave them real people a different types you know that 30 year old that mid career person that person that was going to take early retirement, and we said how this, how is it going to affect that individual with the retirement would look like. And we did that a number of scenarios, we can do those. Once you start to come up with some ideas, or if you have a scenario want us to test and what that does to the individual, because we think that's important to know what it does to the individual, I think that's extraordinarily important. We want retirement security need to understand what the impacts were, and some people had more gains and some other people had losses. Obviously, since we had, we were reducing the unfunded liability. There were more losses than gains in that process, but we can certainly provide that for you so once you have a sense of what your scenario might look like, we can apply it to different folks in our system and literally the retirement system came up with a series we talked to the actuary, but which ones I think would be helpful. And then we gave them those real real people without the names and then they did the calculations. We can do that for you. I'm not sure if I'm understanding this correctly that back in 2009 actuary is made an assumption that teacher salary growth would be at a higher level, compared to what actual real life events took place over the past decade that teacher salaries have not grown to the point that actuaries assume they would, which because of that lack of growth that actually was in a way a game for the system because it didn't cost as much money to the system. In fact, the only difference is that we did experience studies and 1015 20, we did a mini one in 2017. So those assumptions have changed since 2009 have evolved but again what happens at the, in terms of the whole particular in the teacher side. You know, you've had a lot of interaction with policy decisions around workforce, and on the state side as well. You know, again, I'm not going to suggest that that I have no idea where those positions of those 543 positions I mentioned earlier went, and how that give it up, we need to do a better job. We need to do it. Okay, HR will have to volunteer for this one. I'll tell Commission of fatigue that I just volunteered or for something, but we need to do a better job about workforce and where they deployed, you know, and I take a look. And I see issues in some places corrections for instance. Over time costs, because of the number of staff that you have there, and you can't go home and say well, you know, my replacement didn't come in so I now I'm going home and you know, the folks in the facility, you know, would you, they just have to wait for the next crew. You can't do that so we have overtime costs what are the overtime costs in relationship to if you hired more individuals. Do we have the right distribution of folks. Those are questions that need to be answered and they. I'm not going to answer them. You need other types of professional help but they will bear on the decisions that are made here because overtime gets into your average final costs for instance. These are really terrific questions. Thank you. Okay, so I'm going to try to move up a little bit actual gains and losses on page 19. I'm just going to hit the key points and then try to go through some of this. You know we have losses every year I think we've talked about that assumptions don't actually match. We have to retool and those over time. Some of those are in our control some of them are not as I said, for months a great state but we're not going to probably change the national inflation trends, and we're certainly not going to have an impact on what they voted in in England for instance. You know the Asian crisis a few years back. And we don't have a control over that and my favorite one is the Fed monetary policy which they call taper tantrum tapering of the of the of the, the treasuries and how they're, you know, how much they're buying for instance, and the tantrum is a part of the markets reaction to it. But we try to we try to true up for those. And then you have different types of gains and losses and there's a chart in here we'll get to momentarily on those. The experience study the recommendation, moving from five to three years, we concurred with that I think that we were talking in the same direction that's great when all all minds are working in the same direction I think that all of us in the room can agree that we'll get to the patterns. I think the last comment and I quoted directly from a memo from Segal, after assumptions are used to estimate the plan's future benefits and payments, but they do not determine outcomes. Ultimately, the outcome will be how much did you earn. How much did you contribute. What were the salary changes how much did you get in retirement. The assumptions are helping is a planning tool. They help us get there. They help us understand scope of the issue if things don't go the way that what it looks like if they do go that way with the assumptions will look like and what, how bad is our plan funded position and what do we need to do to correct it. But assumptions also are just that there are assumptions there are guide posts there for planning purposes, real behaviors make the difference and ultimately where we come through on this. So page page 20 is the cumulative losses in the in the visa system now you notice I went to 2007. Remember I pointed out that in 2007. So when you started to see some some changes in terms of the impact that that the, the change in methodology had in terms of mostly the state teachers, but it did have some minor impact on the state but since they were funding it it wasn't as big a deal. And then I wanted to get with post recession looks like now 2011 is mostly post recession, but in the case of investments we smooth those over a five year period. So if you take a look at 08 no nine being your biggest chunk of change in terms of losses. If you over a five year period you're still going to have those monies into 2013 or so. So, if you take a look at this. Again, the, the, the big ticket items for the, for the state system I do need to put my glasses on for this. You take a look at the positive numbers so retirement gains and losses is a part of it I think the retirement incentive is a part of that you take a look at the other gains and losses which really include the retirement as well plus changes in the way benefits were calculated and some of the changes in the systems over time. 95 you take a look at, again, I got to do do this with the paper here. It's salary as I just said that 95 million. I take a look at investment gains and losses were about 56 million. Some of that again being phased in from the recession. Mortality, you know people were living longer, we had to make those changes so you see, we went from 293 million in unfunded liability to a billion 40, and these are the components of what made it go up and down. If you look at the teacher system which is page 21 and this by the way is what you should be looking at to the questions that you folks have had, what are the drivers, and what do you have in terms of ability to influence those drivers. You're not going to increase, you're not going to influence mortality all that for months a great state to live in a healthy state. But you can have an influence on retirement experience, for instance, and what are we doing that incentivizes people to retire. And that's an issue. The retirement incentives worked away from a good pension system, they helped on the operating side but there has to be balance on the teachers system. Yes. I'm not sure this is a legitimate question or not, but, and I don't think it's necessarily a question for you but in terms of what we can control and what we can't control. So, any, we can only make decisions about the retirement funds and the benefits and contributions. But we, we can't control what local decisions are I mean I've been talking about the teachers fund now not that yes, not the state employees fund. We can, we have no control over those decisions and so how do we determine how those decisions might impact our offset or reverse any, any decisions. We make and I don't I don't know. I think that's just something that we need to, we need to address it's not necessarily for you but it is something that's out of our control that does impact this. I think there are a couple of pieces that I remember way back, and I remember talking to representatives Sweeney about this and the disconnect because it's local. And they set the salary levels they set the make the pick the decisions there. We made the decisions about appropriations, and I think the disconnect was, well we don't have control over this and there was something in the mindset that said if we're not we're going to skimp on something. It's going to be that because we don't have control with the decisions that are impacting this. That was a mistake but I heard that. And I don't know if every legislator or every government official or every board member or every member of the treasurer's office at the time had that perspective but because we don't have decision making around the policy pieces around many of those not all you have a you have that disconnect and that's where the only thing I can think of in terms of why you underfunded one versus the other. So I think that that's part of it but you do have some, you know, some impact on, you know, through education policy and education funding, and what decisions are made at the local level, whether it's you know the changes that were made in fact 46 or whether there are changes that are made in terms of going to not someone's not going to like the word I'm about to use but mandates about property tax increases. You know, those things have an impact, whether or not the retirement incentives that were happening and I believe to some extent are still happening for teachers, whether or not there should be a cost piece to the state when you push up the benefits through the education fund I just hit one of the one of the third rails by saying that, but there are ways that you can address it. And I think that it's important to take a look at what's driving the teachers, and if you look at it. 319 million dollars of the changes were turnover turnover which is you know members and terminations and staffing issues at the local level and then you take a look at retirement gains and losses combined and that's on the next page. I was pretty close 39% of the increase the 482 million dollars related to that. We broke these out a little differently. And that's not, I think the JFO report aggregated the demographics and we thought breaking them out would be helpful. The report I reconciled the two hours and it's 100% correct. Okay, so thank you, in terms of those numbers. But I, I had the reconciliation back here if anybody wanted to look at it, but 39% of the increase in liabilities is related to that. Those two items, they're offset by salary. They're offset by other pieces, but the reality is that's a big chunk of change. And what can you do and policy decisions that have an impact on it. If I were, if I were a current teacher, paying into the teacher retirement system and understanding the impact that these decisions have on the health of my fund. I would be rightfully wanting to concentrate on that and I hope that we will continue to drill down on that to understand the extent to which the advantage of retiring a high salary teacher to the local school district. It may not be great for the local school districts bottom line. It may not be great for the remaining teachers retirement system. So what I would say to you is right on. That's exactly the point. And looking at this thing as a totality, as opposed to, you know, that division and we should bear that. We should bear the cost of that because right now, it is the teacher retirement fund that's bearing the exact. Getting on that, that third rail again and some really tough decisions around that but it is something that you need to look at. You got it. Yeah. And I just wanted to add to that it's interesting when you just oppose it with the, I don't know how many people here are seeing the article and Vermont bigger that came out last night about teacher shortages and that you know a county in west of Rutland has was hiring over 25% of their staff this summer. And you talk about teacher turnover, you know, absolutely, absolutely, and it's a big piece for us and we try to get at this with the actuaries when at 46 and you had school consolidation if you don't have a contract at the end of the year, you end up in an actuarial bucket called inactive. And we did you know trying to work through that so what we did is we walked through and took a look historically did those teachers that did not have a contract get picked up in a in a school and we're able to resolve some of that but those are big issues and looking at that. It's tough, but I would recommend getting to your point that we that you take a look under the hood and look at what you can do here. So we're going to do some work sorry we're going to do some work on demographics this afternoon and we've got HR coming in to talk about the demographics of the state workforce but there. It's more difficult to get a fine grain understanding of the demographics of the teacher workforce, because we're sort of, you know, we need to look at data, you know, from the retirement office, or from the teacher health insurance as sort of a proxy for that and I'm just wondering if there are other sources of being able to understand, you know, how many early retirements were offered what was the benefit that was offered to the two teachers, either across the district or across the state, because I think we should understand what that has looked like historically yes, and assume that we want to have a better understanding of that going forward to know it's back to this teacher retirement. Would we have that at all or, you know, I asked Jeff way back about this and we were trying we ended up with some anecdotal data which is described on page 23. I think that we need to take a good look at the contracts as well. Excuse me, let me find. Yes. So this was based on some communication between Jeff and myself back in 2017. And we brought some of this, you know, I think I used this anecdotal we know some schools, we don't have a full picture I think the, the testimony I had was, I went to a bookstore and the person behind the desk said I'm a teacher retiree thank you for the good service from your office and it's fantastic those people do a great job. But with the retirement deal I got, I couldn't pass it up. Okay, and I started to say to myself, Well, what's going on here, and how many of those are happening, we know in the region because we're a single employer in and but we don't know what's happening here. So, back in 17, the rough estimate that we had was slightly less than 50% of the schools have some type of process, it may fluctuate. Jeff's gut feeling, if I can speak to you Jeff is that there's less of that now than there are but when we talk to retirees we do here. Well I have to make a decision about retirement because I have you know whether I get this incentive or not. There's no current data. We are going to look and see if we can get contracts from different schools, and see if that if we can get some sense of what those contracts are where they are provision some of them are ad hoc. It's not in a contract some of them contractually and try to take a look and see if we can get a handle at least some words happening, and then maybe ask the, the lea of the school to give us some more information. We did see some geography in this, and that, at least on the materials I really appreciate Jeff getting this to us during this, the southern part of the state has less of these than than the mid part of the state but we can take a look at contracts, get some idea of what's going on but that's going to take some work, but I think it's work that would be well suited to getting to solutions. Just, I just want to bring something up because you've accurately reflected this on page 22. And I just want to make sure that everyone here is this, because I've been getting a lot of communications from folks and the first thing they say is that you need to, you need to fully fund the pension every year. And then we have been since 2007, both sides. Yeah. However, this does accurately reflect that the, the health care. Absolutely, was actually coming out of the course, even though we fully funded the page. Yeah, absolutely. The focus of the fund was paying for open. Somebody named Ron Huber and you and a couple of others got together in 2015. Ah, Ron, yes. He went through every amortization table we had to check them, and he told us we were right, but, but it was a, it was an interesting process. Just right there and what really got going to finally turn it into a Twitter's not going to pick out, you know, where we're not pulling money out of the corpus of the fund. Yep, coming out of operated funds, right. I love the number on that one. It's what I've been the first time. Yeah, you're not fully funded. Exactly. Go to page 17. And I agree. Mostly in principle, I have a few nuances with, you know, some of the discussion that's happened on this and reports that you receive. There's no impact on the change in 2020 to 2021 for the unfunded liability and no impact on the on the ADEC. It did, however, lower the levels coming in great recession that and and frankly, you know, the ability to recover when you're in a lower funded position. And, and your point that the 175 million of 2000 to 2000 and from 2007 to 2020. Now, healthcare numbers. I can get numbers from 2000 and 01 up the statement to a change. Michael, you probably heard stories about vision actually Michael in the audit his office wrote an audit report about what I would call the fiasco and implementation. But I can get numbers from 2001 and try to estimate the impact. But the, it does have an impact on the ADEC still because of that mortgage situation but you're absolutely right. I want to make it underfunded. Yeah, we were pulling funding out of it. Yes, in order to pay for exactly not underfunded. Yeah, 2007 going forward. Yes. I've been on that committee upstairs since, since the last 10 years and we have dogged and the permanent funding. Absolutely. And now the ADEC. Well, yeah, we're only funding in the, in exactly in the pension system we're not funding the OPEV and a pre funding basis. Yeah. Yeah. And you're going to see that I'm going to make a big push for that. I just want to because people don't. Yeah. Okay, so the change we made to go to pay go instead of putting it on our credit card which is essentially what you're going to do is mind boggling. It was a $480 million benefit to, to the system, and to lower the cost for taxpayers and, and when I say taxpayers by the way I should say other taxpayers, when I'm referring to employee groups because 78% of employees in the state system that retired reside in Vermont pay taxes in Vermont, 75% of the teachers, the myth that they all run the Florida is just wrong. Okay. No Hampshire, Florida's next. No Hampshire's next after that. And some people I have a staff person that lives in New Hampshire so my presumption is retirement he's probably going to continue to live in New Hampshire should come to the great state of Vermont. But the, the reality is that $480 million by making that change in 2014 you enacted it and it was implemented in 2015. It was one of the highlights of our office in terms of working with you and yes Ron went through those piece by piece with us. And it was an arduous process but it was worth every penny. So, and it was a lot of pennies. Eric has a question. I think this has been a really helpful dialogue in terms of what's driving some of what we're seeing and I want to dig in on the turnover piece a little bit just so I'm understanding it correctly so when we think about solutions we can tailor that to the drivers. And that turnover being a driver of unfunded liability that I assume that is people leaving sooner than you actually assume that they would continue in the workforce. It's behavior changes. Retirements are a little easier to understand because, and this is not the case in every once everybody says you're going to lose a whole people and that's going to impact the system. Yes, it will impact the system. But not everyone who retires is an actuarial gain. Some folks are smart. When you terminate, or you have turnover you're hired and rehired and those are a little more ambiguous in terms of the impact from person to person, but clearly, it has an impact and we can dig deeper under I haven't dug enough under the whole under the hood there. We can dig deeper on that. This might be going back maybe 10 minutes now but it's just about some percolating my mind. So thank you for bearing with me on this. Just trying to make sure I understand the idea that when locals offer an incentive for a teacher to retire it helps the local budget, which helps a little taxpayers there. However, it is a drain on the pension system because people were retiring earlier so they're taking their pensions earlier. But at the same time, if teachers work longer, it puts more burden on the local budgets and less burden on the pension system. That's the that's the look at it in balance to the holistic approach, you know, instead of pressing the bullet at one end, taking a look at the whole thing now. The people that that retire that are actuarial gains because a lot of folks when they get to the to their more mature age. Okay. They, the more some of them are maxed out under steps. Some of them, they're going to get cost of living adjustments, but we refer to them as actuarial gains to the system I was at a retirement party for someone. And I remember, I got up and called him an actuarial gain, at least Suzanne young understood what I was saying but not everybody but many. Okay. So, when you do that, you end up putting pressure they're retiring early so you're paying out dollars, you lose that actuarial gain that they have in terms of their salary position and. So it has an impact directly there again the other one is a little more ambiguous in terms of the decisions that that impact that but we will get more information for you. And it feels like it kind of speaks to the complexity of all of our consideration. Yes, thinking about. Okay, well if we do make this change how that impacts human behavior. And you know thinking about it teachers who are at their bottom step think their max amount are standing for extra time how that forces local school districts into making difficult choices. So repeatedly over and over the easiest way to trim a budget is by cutting people, which, of course, cutting teachers really has a terrible consequence on the education of our students and they are communities in the impact they are in the services that we can provide so it's really does speak to all those pieces we need to consider women. Absolutely. Absolutely. It. It's not complex, but you're asking the right questions in this. So thank you. Question. Is there anything on the front end of a teacher's career in terms of turnover than the first five years, the best before the best period it's impacting this number as well. I'd have to go look at the benefit we made some changes to that in the teacher system in 2009 so that when you left, we calculated an actuarial impact of that and adjusted for that in terms of Michael. You remember in this is that there's a. Yep. The individual when they leave. They get their interest their money plus a percentage. And we try to calculate that to make it accurately neutral I believe but we need to take a look at that whether those assumptions hold. I'm now getting into I'm thinking about the you have it someplace in your materials the group plan matrix. I'm a little foggy on this one and I'm going to have to follow up. When can we expect to see updated numbers by 21 close out and increase gains from 24%. Sure. So, um, we do our evaluation process. And this is where we are going to have some, some competing needs for actuarial services and I talked to the actuaries the other day and said we're going to need to ramp up. And because we anticipate a request from you folks, we're going to need to ramp up now the problem with ramping up by the way, I'm going to get to your question in a second. The problem with ramping up is that you need people that are also experienced in our system so you know so they don't have to get from zero to 60 and 4.3 seconds or whatever it might be. So that's going to be an issue the boards did vote to say that the more than happy to use this is the teacher board, yours to share our services, but they also want to make sure that our statutory requirements are met. Now what happens, so this gets to your when. So what happens is we were finishing up right now I think Monday, you know, trying to get people on on boarded that retired in June. So far, a little less on the teacher system than last year, we won't have final numbers to Monday. And again people can retire after that too, but you know that's kind of a cut off point that we're looking at. Then we close the system around mid July we you know we've we've got our June numbers and what's happened in the year we do some census work ourselves the it department works and we try to clean it up. On August 30, we send that to the actuary. Okay, and then they do a cleanup so all through the month of September, they are doing cleanup on our numbers are looking and saying that salary increase doesn't make a lot of sense to me in the teacher system for instance the AFC is limited, the amount that you can counter the AC is 10% in those last three years and anything above that isn't counted. So there are different nuances we got to go through that. Why they're doing that are folks are doing the financial statements and we do all of the financial reporting that's sent to the auditors it's included in the state some comprehensive report. And that gets sent to the actuary on 930. Okay, and then we combine those things and they do a report at the end of October. So we won't know the impact to October. There's a page in there that shows how they smooth it so you're not going to the 24% is great. We're happy with it. It exceeds our one, three, five, 10, and maybe 15 year I don't remember rated return expectation, those are volatile, you know, I won't say what organization but an organization that was pushing an agenda would take the worst possible time, you know the great recession and put it there. You know who I'm talking about but so it can be endpoint sensitive when you take it in terms of the economic cycles, but that 24% is great. But what's going to happen is that there's a difference right now between the actuarial in the market value. It's about 105% roughly. So you're going to need to make up that first, and then we smooth it over a five year period. So I took a shot at that the other day. And I need to kind of retool it a little bit, but you're not going to get with a billion one is what we collected so this year, our earnings are just over a billion one. The teacher system gets roughly 42% of that the state system gets roughly 42. And the remainder goes to 16% of I'm doing the math right to the to the municipal system. So 42% of that so you're talking, you know, 400 and what $60 million, you're going to get that. But again part of it is to pay off the, the difference between those, and part of it will be smoothed out in the next few years and you say why do we smooth it, because if you use market value, you folks could never do a budget, because one year, you know, when you have a bad year, you're going to have to put in a whole bunch more than the next year it goes up. We said that problem with debt service and as they bring up his name, Jim reading would say, you know, how come it was this year and this year, you know, everybody loved it when when the debt service went down but they weren't too happy when the next year went up so you try to smooth it for appropriation purposes. During the great recession. Some folks decided that one way to handle that was to push out their five year smoothing to 10 years, so that there was less impact on the great recession. Unfortunately, when you get the snapback you know and the increases, they also had trouble there so some of them were trying to get the best of both worlds, 10 and then switch it back to five or something. We won't all be there. We won't know to October. I've got a, I'm not prepared to say the number I want to kind of walk it through with the actuary I tried to replicate, I replicated their process that they use for the prior year and came within 3 million bucks, which isn't too bad. I want to make sure that I'm doing it correctly this year and talk to an actuary about it so before I hand out even an estimate I want to have that that conversation. And then we'll be quick. Yes, knowing that you were saying we can't get that report until October but our task force is playing out the initial report in October I think having that past fiscal year returns just as a consideration for us burning decision making. What are the chances we could get that earlier than October. If I, if I talk, just the investment piece alone, and that's moving. If I talk to the actuaries and their game in terms of the process that that I started to get replicate what they've done and see if I can get close. And they will nuance it, I mean they will, they will take whatever I do and say you forgot this you add this and that you know, but when we finish that process we may be able to give you something a little further down the road. I just remind that that's just that piece, your other gains and losses how we doing mortality how we doing retirements we have no idea, but getting to page 24 and 25. I'll go to page 25, the, the, this is what you're going to use for inflation. And if you see their assumptions are 2.4 per year and 1.35. I think one of them gets full last year the inflation rates for the teachers, for instance, was zero for group A, and, and 1% for group B and C group B and C I believe get 50% of the call up to a ceiling of five, but a minimum of 1% group A gets the full but they didn't, they don't round up to a minimum of one that number is going to go up one way or the other. If you take a look with that arrow is 4.6% is the number. They may adjust it because they do, they do go back and adjust these but that's going to be an actual loss. So you got a gain on the investment side you can have a loss here, or at least at best less gain than you had last year. And then you've got the other pieces that I can't even begin to, you know, I can't tell you what the behaviors of state employees or teachers are, I know my behaviors but I don't know everybody else's so so help. Okay, so that gets us back on to this. Again, I'm going to skip through most of the experience study because we've done that. So if you want to go to page 27 this was in our report this came from the actuaries. And this is an our report to you in January 15, and it showed you, you know, again that 260 million was directly related to the, to the experience study and then in the state system, another 8.2 million, based on the valuation getting you up to that 225 million. I really wanted to get to a better sense of what the pieces were. So in the next page and this will be some time to digest so I just explain it. And unless you have questions I can attempt to answer, but you see that we broke this out to adjust the mortality, then mortality and turn over, then turn over and all other demographics, and then just the interest, because when you look at their report, they had roughly, I think Chris, the number for all economic is around 157 million. Yeah, and, and we broke it out and said, Okay, how much of it is inflation versus investments. And since inflation and cola, which is an economic assumption, not a demographic, the cola was a game, you were masking the true cost of the investment so we put that into this to this analysis. So you'll see again on the items that, and we did this with the actuary did this to be very candid, based on our discussions back and forth. You get a better feel for those pieces that kind of get lumped together in the experience study, and the same with the teacher system, and I won't go any further on that today unless you really want to have that conversation. But we can come back with any questions and I'm looking over at Andrew and he's looking at that chart. I have suspicion that I might have some questions from you and from Eric and all of you. People, you know, all of you have been asking terrific questions today and I've been spending years talking to representative Fagan about retirement. I mean, he's never bored with the conversation he really, he's really into it as well so folks here, you do a great job you're informed and that's great investments. I'm going to touch on this briefly because this I'm, you know, I'm not not the chair of the pick. And in fact we are moving forward just to let you know on a lot of the changes pre the report. So the meeting we have next week. I plan on resigning as vice chair and asking an employee representative to be to be the vice chair. That's my recommendation the board could vote for anybody they want. I have one vote. I think that that's helpful. I have asked to be continued to be involved in the ESG environmental social and governance that's something that's near and dear to my heart. We get involved in those issues in our office as well. Clean water comes to mind, you know, but our involvement in the global warming Solutions Act and some of our testimony there. But I think and we're also we're talking about moving them in terms of space. We're talking about some of the functions so we are moving fairly quickly on that, which is good. But long term view something I said roughly 60 to 62% it's really closer to 62% of what's paid out to a retiree that dollar you pay is off from investments. So, 2.62 a billion point one for good numbers. You see my good news, but investments are not going to solve the problem in and of themselves you still need to take a look at the structural changes. Expect some losses from color which we just said and it's too early for me to have any idea on what those others will look like. These are the second pages the chart Tom galanka provided to you your last meeting, however it's been updated to the 24.6. This chart, and this gets to why investment rate of return because there's a disconnect. Folks think that the investment rate of return is going down because they're not getting the investments that they should. That is simply not the case. You take a look at the chart that you had in the beginning again, economic cycles, I'll go back to that one that Tom sent out whoa. You see the line red or orange it's that's what the actual assume greater return is, and you're above and below it that's what markets do you have up years, you have down years. But you see the cycle and where we are and by the way, Tom pointed this out to me and to you folks in testimony, you see those big jumps back in the 80s and 90s. That would have been a great time to have not underfunded your pensions but. So we do have ups and downs that's what you expect in a cycle and over in the corner or the some of the more important market events, or more significant not important. The next page is from from Nazra and you know, Chris, you know that chart that you had in there they do that every year, and that thing makes me busy. Okay. Okay, I know the chart you're talking about it took me a while to wrap my head around that but I do like it now. Yeah, well there you go. Yeah, it is busy and I actually have that chart over a number of years so I can provide that but Nazra did this chart that just showed it in simple line graph with the averages work and look at inflation. That's driving the reduction in the rate of return, getting back to your point I made earlier. The return assumption helps you plan, but actual investment return will ultimately just like actual retirements actual behaviors, actual inflation, are going to determine where you end up in this thing, you do the best with the assumptions, but the inflation is doing this now, I have no idea what it's going to look like down the road, you know I'm concerned about this one year is it a flip, or is it a sign that inflation is is going up. I don't have to wait and see, but this chart shows you that and up on the top I put where we were at approximately those times so back and oh to we were at 8% the averages at eight and five, we were above that no five. We made a, but I think was not the best move and oh five, we looked and said we just created VP. So let's push up our return assumption a little bit and that disconnect between what VP does in the assumption was not there. I think that you see that trend down. And at this point, we're at 7% 2019 to go to the next page. The average as a may now they update this all the time so there's a July number I haven't gone back to look at it. The mean is 7.13. The median is seven and we're at 7%. So just thought I'd point that out. The question is, or is our smoothing in line with what other folks do and as I said during the great recession some folks played with that a little bit. But it is majority are in that five year period. We're in that fight we have five years and so it looks to me like those assumptions are relative are reasonable and well within the range. The other piece of this, and I'm almost done folks believe it or not. And I did this a little different than Chris I think you were trying to look more cash flows, and I was looking at audited operating results. And it gets very complicated because you know you can't invest in a crew, you know, I guess you can if you do some things on the margin in your own life but I certainly wouldn't wouldn't recommend that for a pension fund. But so the blue thing is the blue line is the amount of sources of funds, and we have a more detailed in our annual reports of what makes up those employee employer investment income. And then the orange number or line is the actual application pain of benefits administrative expenses and the like, and you see that all across in the visas, the, the, the, the payment of out the door is higher than the amount that's coming in. So you want that to some degree, the purpose of having a pension plan is that you can get the value of investments to pay for those instead of taxpayer dollars. So you want that to some degree, but the borrowers a little bit the unfunded liability is a little bit skewed a lot skewed actually, but the assumption you know someone was surprised when we said that, you know that you're taking money out of the fund. So this is going up. You know your balance in the fund needs to go up. But the idea is that you're using investment dollars to pay for some of this, but you want the corpus to go up. You had a chart in there that I didn't include here Chris but you see that generally is going up in one two and obviously 2008 wasn't a good year, but that that pattern. Vistas has the same pattern. And you'll see that they had some bumps in 2013 and 14. Some of that may be the teacher piece I was trying to think of why last night, or getting to your point representative Fagan that's that you know that that might be that we solved it around 15. The difference is Venus. Venus is a young fund. Okay, relatively new and you say 1974 is new but if you go back to the 40s for the other funds. They are more mature and in terms of their process so in the front end, you're collecting more with the understanding that down the road, you're going to use those dollars and you see all the way across that this is a cash positive fund. Okay, I put it in just to explain that it's you know we're not concentrating that, although you will see in 2009 that eight. This was something that was done. I was a deputy at the time but I spoke against it. They were in such a great funding position, they said we're going to take some money and we're going to put it into like a cafeteria fund for healthcare. So they, they can't take it out of the corpus of the fun that's not legal, but the contributions coming in, they made a statutory change and said these are going to go toward health care, and then the great recession hit. Okay, and so, and once you put it into the health care it's irrevocable fun so but they, they haven't done it since but that money is still there. Getting to the next page. This is the most common equation that people cite. Eric is saying yes in his reading Chris is saying yes in his reading, all of you that have done with pension so it's, you know that it's contributions plus investment income, equal benefits paid plus expenses that's what you want to see crossover when this question isn't working. You have a crossover event. Gassby calculates that for accounting reports. It's not surprising that New Jersey had a crossover event. Okay, a couple of other states, but we do not have a crossover event at this point in time. We continue down the road we could, but even more important is even before you get to the crossover point, you're going to reach a critical juncture, where the legislature, when the governor and others are going to say taxpayers are going to say we can't do this anymore, when you get to that $500 million. Okay, you can't do this anymore. And, and you end up not paying it, or you'll end up creating systems that do not provide retirement security. So that tipping point is why I'm so concerned about this because I want those next generations to have the opportunity for retirement security. Now you're saying while you're also cutting benefits in some of your proposals. There has to be that balancing, because you want to have retired, you know, if they've done some of the changes in social security a little earlier, they'd be in less less bad is that a way to say it. Not in the same situation they are now. So, and as all of us, I'm probably not going to hit that tipping point there because I'm a little older but that 30 year old is definitely going to have some concerns about that unless Congress asks. Before we leave investments, I, I apologize, this might not be the best question for you, it might be better for Tom, but has there been a look back at all in terms of our investment strategies when our funds may have underperformed. I think it's going on. Yeah, all the right things right now. But just in terms of learning from past performance. Big time, big time, and I think that one of the things that was helpful in the in this in act 75 is that they put some pieces in there that I think we were doing already to be very candid. We did not have been streamlined into one area for transparency. We had it all there but it's, you know, trying to trying to navigate websites can be a little rough so trying to do that trying to also create a communication around it to employees those are good things. But the practices that we've had with things that we were already moving on for the last five years and I got to give Tom an incredible amount of credit for this and the committee. If you took a look back to 2010, what our investment lineup look like. I don't believe we have even one manager that we had back in then, and our structure is different. We have some downside protection, I believe, and I used to say this at committee meetings it was a difference that I had with some, I won't say who I should not be doing this I apologize that we had more downside risk now some of that was legitimate coming out of the great recession, you didn't, especially the teacher system it was so badly funded that it couldn't take another hit to be very candid so you had to have downside protection. I think we had just a tad too much. And we're trying to have the balance between growth funds and and and downside protections and inflation protection. Real estate is a great, at least pre COVID was a is a great inflation protection at one point. I don't know how we ended up there but we had commodities in there. You did. And we did because they that was assumed to be and depending on who you talk to including your investment consultants that's a great inflation buffer. I think that in hyperinflation that might work doesn't work with regular inflation, and we got the heck out of it, and I think that was an incredibly good move. So all of the things that we've changed, I think are to the good. I know that representative Fagan spent a lot of time going over things I think you're happy with the direction we're going. I know representative again and you spent some time with our investment folks. I'm not the person you should be talking about this particularly now since Tom is the chair, the pick is spinning off into its own entity, but we've made some incredible changes that I think are very good. And, again, I think downside risk was important. I just thought we were tad too far there. And so in boom markets we didn't do as well in down markets, we did incredibly well but if you look at the market. Overall, it's moving up. So you want to have a little bit more upside gains in the downside protection I think we've made that change. I think I'm at the, oh, the one last thing is open. Yeah. So we have about 10 minutes before our noon break. Okay, loud through without a morning break my apologies we usually try to put a break into what people get up. So I'm going to do this one in seven minutes how's that. Okay. Fund the darn thing. Okay, okay. Okay, we have presented pre funding of proposals we've talked about this is 2014 in the presentations we've made to, to go box to appropriations to ways and means to finance. Okay. And 2019 we submitted a very good formal proposal on this and then again several times in 2020 2021. The bottom line is just like an attention system. If you pre fund, you get to use those investment earnings to pay for healthcare. If you don't, what happens is that you're paying for a dollar for dollar with tax dollars. And looking at the chart, I'll go past page 42, looking at the chart that we presented last year. If you, and that's based on interest rates that were in place last year for treasuries actually you have to use by by law, the 20 year double a bond rate, Treasury bond rate that's published in the bond buyer and other places. Using that, if you pre funded, you would be saving in the teachers plan $821 million over time, and the auditors in the actuaries would allow you to book this right away, which really does a lot for your balance sheet and you start earning those dollars over time because you're investing those dollars. It just blows my mind that we're not there to be very honest. And someone said, you know, we don't want to be here in 10 years, you know, on the pension side, back here at the table, you are going to be back here at the table on this thing to you solve it. Okay, we need to deal with this now. The numbers for the teacher system, the amount of money you need to put in is fairly fairly modest, the state system, it's a bigger lift, but with the revenue numbers that you had this year in the statutory piece that 50% of any money's after surplus money's after filling your, your mandatory and your, your, your, your reserves 50% of that goes, my guess is actually I know the number but someplace around $50 million is going to go back into the kitty for the state health care plan. And we may be able to take a look at those numbers and do a little better job it's a heavier lift, but you got to get to the lift, because we're talking $1.6 billion. We need to do it. We need to do it now. You know, and we don't want to be here in 10 years saying how did this help now. If you look at there's a chart in here at the end that has some of the initiatives that we've done. At least I think it's here. Maybe I didn't put it in. But we need to, we've done a lot on the liability side. We've done changes steered health care so you have to work longer to get a subsidy. And, and that subsidy changes over time. Those things have added a lot of savings to it. And, Michael, I'm going to be careful here but we're, we will be announcing a change that will actually enhance benefits and lower the premiums. For one of the systems will be down to that in early August I hope I can't give you any more details of it. You got it. You got it, because we can't get ahead of the contracting process and the like but it's a substantial decrease in premiums. It will impact the old pep over time, which is a good thing that doesn't mean you shouldn't pre fund you still need to do it. But since it will be effective in January, it won't be, you know, full year and then the next year so if you ask me how much it's going to impact the old pep, we're not there yet. And that ends my presentation except we're not going to talk about that. Okay. No, I wasn't talking about Oh, okay. Yeah, I just, I had said that we wouldn't entertain any conversation about that because it's still in negotiations. Right. No, I think she wants to ask a question about the presentation as a whole. Oh, I'm sorry. I'm sorry. I thought. Sorry. Sorry. Don't ask your question. So much, so much for that part of the beginning about, you know, the, I know, I know, I'm just having fun with you. So I just send it to I'm just having a little fun with you, you know, so hey, no, no, I just again I recognize that I already promised that I wouldn't, but go ahead with your question, Leona. There you go. I don't know what it was. Looking at the old pep. We've discussed and looked at a lot of it around prefunding. Is it the upfront cost that has been. If you take a look at the states, the teacher system, go back to that chart, we were talking about the premium was 41.8 million. Yeah, as it exists now we're talking about 13.3 and 6 million, you know, as a starting principle. So we're talking, you know, 20 million bucks. Okay. And then we said for the next three years, the premium would have to increase three or four years I think it's three now would have to increase that 10% increment so you would have to put in 10% over the premium, which isn't a ton of money. And then 3% thereafter which is close to the rate of inflation might be less than the rate of inflation down the road, and you get to prefunding. The state system is a bigger lift, because it, while it has some money in the kitty because we had 50 some odd million already. And with this other will have about 100 million in the kitty to help with this. But the numbers and the premiums and the cost or higher. And I, you know, I know you've asked me several times to get into, you know, what some of the differences are I know that there's a difference between spousal and family care and the tears are a little different, but I just I think we have more interaction on the teacher side we healthcare on the state side is part of collective bargaining, basically whatever the state that the active employees get they get in, in retirement, the benefit structure. We don't have as much visibility into that under the hood. But I don't, I know that I saw represented again and say well that's still money. So when you're talking about the power of investing. That was a nice chart that you had in yours, you know, power of compound interest. I think it's time to do it. And the time to do it is now. Thank you. Sorry, Leona. Actually the time to do it was three years ago, but I have a brief request or question about process. So several of us asked questions looking for information. What's our process of recording these so that we get that information thing about getting that all part figure you're working on pre October. I have a question about the impact on the unfunded funds, where that would be. Yeah, what's our process to that list of things that we need. Someone writing it down. I think that right goes down. I hope we did. Okay, if you get those over to me, we will, we will do that. I'm going to defer to the chairs about how you do that, whether you, you know, streamline it and get it over to us. And again we've asked in that that motion that was made and I think it's consistent with the board, teachers board that that everything come through one source for instance JFO to us, we do not want, you know, 10 people calling and diffuse and even worse, calling the actuary at you know, a fairly high, you know, cost per hour. Asking the same question or variation of a theme. I remember when I was a deputy we had one member of one of the boards, the folks in here know exactly who I'm talking about. Okay. There's a smile behind that that we call the actuary directly. And I finally had to say, you can't do that because you just cost us and we were already doing this. We need to have some control over that process so it's up to the chair, how that's communicated to us. At the end of our discussion at the end of today, we'll make sure that we have all of those things on the list and add them to the list that we've already started, and then figure out when we're going to put them. That makes sense. That's fantastic. I just want to make sure I wasn't sure if somebody had the assigned task of recording these types of questions. We'll make sure at the end of that that we get everybody's requests. Okay, like we did before. So, just in terms of you talking about demographics, I have not done the demographics for the, for the, the active employees, but I did do it for retirees fairly detailed. And again, I handed that out at the risk meetings, the risk assessment meetings back in 19. It's not updated data, but it's pretty darn good. And it breaks it out between gender it breaks it out years of service, the AFC by group plans. And it's we have one for the teachers and one for the state we'd be happy to send that over to you I think it would be very instructive. And I have to do this, give me one more minute it's not domain to this subject but if you go completely, you go to the report that the treasures report, and you look at a pen to see F1 and F2. I'm just going to pull this out because this is a subject near and dear to my heart. It's about gender equity and pay. Okay, so I'm going to hold this up so this is the state system. And way back in 1980 and yes we do have retirees that are still collecting benefit from this. You see the disparity between women and men in terms of retirement benefit that the average is in the middle. There's a trend line there, but put it this way so you can see it as well. It's gotten better is still a disparity but it's gotten better. But this is something that I think we need to talk about to outside of this but I can't, I got to put a plug into this about, you know, disparage and pay. Some of it's related to the time that you're in the system, you know your service time, the teachers system has less disparity but it hasn't changed much since the, the early so I just thought I'd point that out. You see the counts at the bottom of how many people we have that are still collecting benefits from those ages and that's something about the health of Vermont in terms of folks in the good news is that the living obviously has a cost impact but I'm delighted to see those folks still collecting benefits. Last piece and I think it impacts women, as well as older retirees. I was at a teacher. Every year I've gone to a not this past year because of COVID a retiring meeting retired teachers Association meeting in Rotland. And this person who spoke ahead of me talked gave a presentation on how to how to apply for food stamps. And to me, after a full year of public service whether in the state system or the teacher system, you should not be having to apply for food stamps. It's just a travesty, in my opinion, my concern is the next generation the generation after that why we have to have to say well best you're also talking about, you know, benefit changes and in the legislature is, we have to find that balance, but we have to continue to maintain retirement security. And as I mentioned earlier in my presentation. It's a massive increase in the bankruptcies for for for older folks. This is something we should need continue to take a look at I want security for the next generation the next generation, as do you, but we need to take a look at that balance as we're looking at this. And I'm bugging to me, and that was maybe four years ago, but that I heard that presentation, I was appalled. So, I'll leave it at that. Thank you. Thank you. I'm going to say before we, before we break for lunch. But thank you. Stay if you want me to but I don't think you do. You said that you could control your own behavior and you can get back that you couldn't predict the behavior of teachers or state employees and I will tell you that my guess is that most teachers and state employees are probably voters. According to the Constitution, voters are required to be of a quiet and peaceable behavior. Okay, well, as I said, we can assume that they will all be of a quiet and peaceable. As I said earlier, 75% of the retirees in the teacher system live in Vermont 78% in the state system and my presumption is the active workforce probably follows pretty closely to that. So, take it from there. Thank you. Great questions. I really appreciate the opportunity to go over this. You can tell I hate the situation we're in. And in all seriousness, it's mind boggling, we have to deal with it. It's painful. You can also tell I kind of get into the subject fairly deeply. I'm happy to come back answer questions. I do validate everything through the actuaries. And we are, we are a resource for the boards of three board of trustees are the fiduciaries in it and we work with them. As you know, Eric and they are they set the guidelines and we're headed with these things so we'll keep them informed as well. Thank you. I won't say pleasure because of what I just said but thank you for the opportunity. Thank you.