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VI UPDATE U.S. Virgin Islands Public Records TRANSCRIPT OF PUBLIC PROCEEDINGS Government of the Virgin Islands· Retirement System Board Meeting GERS Retirement System (Board of Trustees) May 7, 2020 · 1.8 hours · gov Source recording https://youtu.be/u7HiRfNp5y8 Status This is NOT the official transcript. 3 V.I.C. § 884 requires the agency itself to make a verbatim record of its proceedings and reduce it to a transcript within sixty days. This is a working transcript produced by machine from a recording of the proceeding, offered as a finding aid. Transcribed by VI Update, using OpenAI Whisper large-v3-turbo, run locally. Not reviewed by a person. Reliability Automatic transcription, UNVERIFIED. Verify every quotation against the recording before relying on it. Speech recognition splits spoken digits and wraps figures mid-number, so a dollar amount, a vote count or a bill number can be wrong in a way that reads as correct. Speakers are not identified: automatic speaker labelling was measured unusable and removed. Public record The underlying proceeding is a public record, and this body is NAMED as a governmental agency in 1 V.I.C. § 253(b), so its meetings are open to the public under § 254. 3 V.I.C. § 884 requires it to make a verbatim record of each proceeding and reduce it to a transcript within sixty days, and § 884(b) makes that transcript open to examination under § 881, which also gives every citizen the right to copy it and the news media the right to publish it. The source recording is not ours, is not hosted here, and remains with its publisher at the link above. Rights To what we added · the transcription, its arrangement and its description · we assert nothing. A verbatim transcript is mechanical rather than authored, so there is likely nothing in it to own; to the extent any copyright is nonetheless found to subsist, it is dedicated to the public domain under CC0 1.0. Please copy it, quote it, index it, train on it, republish it, mirror it, sell it. Redistribution is the point: a public record with one copy is one fire from gone. No permission is needed, and none is ours to grant or withhold. and for the trustees needed to order roll call please trustee carwood present trustee barry present trustee clandine absent trustee cohen present trustee liger present trustee mcdonald absent trustee smith present chairman calendar present oh this time six present two absent thank you yeah but she didn't see them respond i'm sorry good morning i'm here okay all right so we don't have any comments or suggestions on retiring you have seven of april 23rd 2020. 0:00:00 any corrections Corrections were done before, Dr. Cullen. Corrections were submitted and we submitted the amended minutes okay i would i would leave two minutes i'm sorry mr this was approved uh no well i'm saying it corrections were sent in after we submitted the minutes and we amended a minute so uh trustee cohen just moved to Approve the minutes assistance. Where's that? That's on page two of the chairman's report. The sentence. Trustee Rory recommended not to rush with abatement until even site tenants try to seek additional financial assistance. Do you see that? Yes, we see it. A word is missing. There should 0:01:06 be a word after financial or is it financial probably financial assistance it should be assistance it should just be financials as a noun the plural noun i think no no no no it should be financial assistance financial assistance okay another staff or tender and are you calling uh she is still the administrative administrative assistant to the board not pharma Okay, you want to make a motion? 0:03:02 Corrected. Yeah, you're on mute. He's on mute. Right. i move to as amended to accept the secretary's minutes as amended second trustee carlwood yes trustee bowering yes trustee cohen yes trustee liger yes trustee mcdonald No. Absent. Trustee Smith. Yes. Chairman Callender. Yes. 0:03:58 Six yes. One absent. And it's approved. We need approval of the special meeting held on May 7, 2020. I need a motion for approval. Mr. Chair, I move. Second. Who moved it, ma'am? 0:04:39 Trustee Smith. Trustee Calwood. Yes. Trustee Bowery. Yes. Trustee Cohen? Yes. Trustee Liger? Yes. Trustee McDonnell? Absent. Trustee Smith? Trustee Smith? Yes. Chairman Kalender? Yes. 0:05:17 Machine transcript · UNVERIFIED. Verify every quotation against the recording. Speakers are not identified. VI Update · usvipublicrecords.com · public record, no rights asserted (CC0 1.0) 1 of 13 GERS Retirement System (Board of Trustees) · Government of the Virgin Islands· Retiremen Chair six yes, one absent. The minutes of 5 seconds, 2020 has been approved. Communication and correspondence are issued. Correspondence dated April 21, 2020. Address to Austin L. Nibs, Administrator, CEO, Government Employees Retirement System, 3438 Comprinsons Garda, GRS Complex, Suite 1, St. Thomas VI 00802, five zero their administrator mr nips our auditor bert smith and company is conducting an audit of the virgin united states virgin islands other post employee benefits opeb as of september 30 2018. as part of their audit bird smith and company is required to review and assess the accuracy of the census data submitted to the actuary the auditor have selected a sample of beneficiaries for review and are requesting the relevant supporting documentation from your agency you will be provided with instructions and access to the auditor's secure portal once received please use the website i'm not going to read that into the record to address the auditor's request and upload the documentation once uploaded please email kate brick bridgewater at birth smith and company.com to verify that the documents have been received please direct all inquiries concerning this request to our auditor via email at k bridgewater and bert smith come company.com sincerely clarina modest elliott executive assistant commissioner dof copies to court carlwood senior commissioner dennis jeremiah grs ceo cfo i'm sorry letter dated may 1st 2020 grs 34 38 compensations gardens st thomas virgin islands zero zero eight zero two 0:05:46 kind attention of mr nibs dear mr nibs press release of may 1st 2020 mall operating house in view of your press release i would like to appraise you of discussions held today between store owners a total of 22 businesses occupying 43 days within the mall have decided that they are not able to open their businesses under the current environment a couple of businesses that cater to virgin islanders will open for the week of may 4th through may 9th for mother's day thank you you're sincerely run the puri hma means even site merchants association email from mama where it's good it's dated uh tuesday april 28 2020 good afternoon mr nibs it's in regards to payroll protection program sba let me introduce myself i am mr manover renting that's it renting two locations in building 3a and b shoppers haven and caribbean gems been your tenants since over 21 years thank you for your email and suggestion you'll need my phone thank you for your email and suggestions to apply for ppp reply to your email is i have applied for ppp loan on april 8 2020. i have followed up with the bank of popular yesterday 4 27 2020 and i got emailed back today stating that they have not received any status from sba once they do they will advise me accordingly according to ppp loan we are obligated to utilize minimum 75 percent towards payroll for forgiveness of the loan being small family-owned business based on fewer employees we have smaller payroll structure our expected ppp loan amount is smaller as well thereafter after meeting all the obligation of the payroll federal taxes utilities and health insurance i will be left with very minimum amount to share for the rents of three locations two locations at haven site and one at crown bay as you know on march 14 2020 the 2019 2020's choose kit seasons came to an abrupt end further the recent news from cdc in a bid to prevent the spread of kovic 19 on cruise ships has issued a new directive to extend 0:07:51 the no-sail order for at least the next 100 days that is approximately july 1st 2020. having said that when the cruise ship starts coming into saint thomas there will be fewer ships on one ship days the ship is docked at gate two that is behind building one and two we see little or no foot traffic in building three considering all the circumstances we predict our business may start from october 2020 onward thus i am requesting a grs board to provide a 50 rent reductions for the month of march and a rent abatement for april may and june 2020. hope to hear from you soon major president sharpers haven and caribbean gents i have a question mr news what happens if we get a 15 page letter excuse me what happens if you get a 15-page letter i can either ask the chairman not to read it into the record or accept it as being read if you want me to do that for the rest i can it saves me a lot i'm just i'm just asking just i've done it before i've asked it you know for it not to be read and to accept it as being read its entirety you know that's just that's just me but go ahead you know i have a 15th letter so yeah well i have a lot of correspondence um it's up to the board the board thinks that uh each trustee has a copy of the letter just that it wouldn't be read into the record and I can ask to be accepted as being read. 0:10:23 my suggestion would be um for you to uh summarize the letter give it give the body essence of it and um submit the entire thing to be part of the record but the board already have a copy of all the letters there's no need to summarize it again because we have copies of the well well that's that's my point so why are you reading the whole thing again i think he's summarizing it the thing about that i suppose because that would be my suggestion maybe he summarizes mr chairman can i can we just accept the correspondence or i can make reference to important correspondence that I think need to be read into the, read into the record, or accept the correspondence that I sent to the board as being read into the records. 0:12:12 Because you have no objection, I don't see why not. I do have a question though. The whole concept of reading into records so it can be submitted for the stenographer to have a record of the correspondence. understand about the lengthy correspondence and summarization would be fine but if we don't have if if nothing is read or if nothing is spoken on i mean at least say i mean what like the recommendation of a summary first correspondence is to me from this person referencing such and such you have to acknowledge the fact that this correspondence came from this person so that in the 0:13:37 Machine transcript · UNVERIFIED. Verify every quotation against the recording. Speakers are not identified. VI Update · usvipublicrecords.com · public record, no rights asserted (CC0 1.0) 2 of 13 GERS Retirement System (Board of Trustees) · Government of the Virgin Islands· Retiremen transcribe record there is some acknowledgement of that male that correspondence me i have to read the whole thing but first letter comes from mr such and such from switzerland in reference to his inability to and what he's asking the board what is it he's asking of the board i mean put put summarize the letter who it came from what is it what is asking and and um you know the the board has the entire letter we have that and just ask for it the rest of it to be accepted at a minute full letter that's that's been good for me i mean i could see a problem if as i say if you get a letter that's 110 pages you'll be here i'm on here listening to mr nibs read a letter that we've already already mr chairman yes that that would be sort of my concern is before you do all of that is that there should be an inquiry to ensure that in fact the trustees are in receipt of the communication and probably have read it but sometimes you know if the document may not have been read and sometimes it may depend also on when the documents will receive so before we you accept it into the record there should at least be some inquiry that they have in fact been received and read so that at least the majority of the trustees are aware of what's contained in the communication in event there needs to be some inquiry or some action taken by the board i think that's critical also uh attorney williams uh maybe a question should be asked whether or not any of the trustees have any concerns or any questions about these letters that's correct mr chairman what i can do for the next meeting just like i do we do in minutes we summarize in the minutes we don't we just give you a one online i receive another from this the reason why what it was i can do that as a summary and attach it to the to the um correspondence when it's sent out so we don't have to go through all of this again i i can that can be done so i i but you would but you would still submit the entire document yes everything will be submitted i just put a top sheet a summary of each each correspondence one or two one sentence very short sentence also mr chairman uh a correspondence have to be have to be discussed upon the board then how would how would how would we do that would we then uh bring that particular correspondence up in order in order for us to to discuss it for instance um a person may be asking for rent abatement and and the trustees may not agree and then we wouldn't have to discuss it in order for us to to vote on it no nothing that nothing nothing that i suggest prevents it i mean i'm suggesting two things 0:16:03 one is that mr nibs in in his summary he was summary of the of the correspondence i received a conference uh he's a correspondence from little switzerland it came from the president they're asking for um whatever rent abatement and and they're asking for rent abatement because just said the the no no sale date uh has been extended and um you know i have i have the entire letter with me it was submitted to you as board members and at that point is when the board decides whether to to make it to to ask the question i mean we're gonna have we're gonna have to make the decision right i mean if they're asking for went to abetment we're gonna have to discussed it of course it's not you know um we discussed anyway i'm i'm just i'm just i'm not trying to get it out of this i was up until after midnight last night reading through these things and i'm sitting here again listen to mr nibs reading mic again well mr chair um if i i agree with um trustee bori um that it should be summarized if um and mr nip said he could do a one paragraph or one sentence um with all these correspondence and i concur with that i'm not not necessarily one sentence you need more than one sentence no i said a paragraph he said a paragraph for one sentence so all right okay forget the point i mean yes you have to use this question to see how long it's going to be to to to um to convert the essence of the letter and specifically what is it the letter is asking of the board this has been done before i've asked 0:17:50 the board not to read the record and i just summarize it so it has been done before yeah but i don't think we should take an hour on this either so let's move on i would i'll just read and and i will uh conclude with it and just accept as rev being read yes uh i sent you a note send your message on your phone excuse me um mr chairman mr chairman yeah i am not hearing you as clearly as i should and i'm what i'm afraid of if i keep letting it go when you're having a whole conversation i'm going to miss stops okay i just sent the message to no i i get that but i don't know if it's something you can do so you can come through more clearly because you're reading when you were reading off the agenda i could have figured out what you were saying but if you have to give a statement i'm not hearing you clear enough to make an accurate record are you hearing me now yes you're hearing me now i am so maybe it's when you bend your head or something but i am now 0:19:47 okay i'm sorry because you call can you do that because i am having difficulty understanding what any any other people are saying also i don't know i am asking yeah that's because you have a delay and sometimes you have a drop the phone line has a delay and a drop Mr. Chairman, are you basically asking Trustee Caldwell to chair the meeting because of the technical challenges? Yes. 0:21:36 Can you repeat that? Yes. That was his request. That's why he texted me. Okay. Well, he works on fixing his issue. his issue, and when he gets it fixed, he'll come back. Mr. Nev? Okay, can I just summarize? I'm gonna go forward with summarizing the balance, okay? Yes, please. To and from, and then summary. An email dated May 16th from Joel Tranham, the president of Port of Sale, just writing to thank us for the deferral of May and and april and may a letter from uh switzerland it's not dated but it's an email and uh it just talked about this problems with um tourists uh having to travel 0:22:22 Machine transcript · UNVERIFIED. Verify every quotation against the recording. Speakers are not identified. VI Update · usvipublicrecords.com · public record, no rights asserted (CC0 1.0) 3 of 13 GERS Retirement System (Board of Trustees) · Government of the Virgin Islands· Retiremen when they will travel the problem with covid19 and also um about sustainability of the business having to pay rent A letter dated May 21, 2020 to Anthony Otley, the interim president of Waiko, providing him with a listing of accounts receivables that goes back as far as 2012, asking him what course of action was taken in regards to those outstanding receivables. another letter from little switzerland dated uh received on may 21st again the situation with suspension of rent payment they wanted to suspend rents until july 1 2020 again about the problem with kovi 19. um a letter made dated may 22nd 2020 from myself to the Havenside Mall tenants regarding PPP loan we submitted a survey to them and we have received some responses a letter dated May 22nd 2020 from the legislature of the Virgin Island inviting the GRS to present on Tuesday August 11 2020 at 1 p.m. the LB Otley Legislative Hall and St. Thomas version hours uh email from ram mccurry the president of the havenside mall association dated may 25th just saying thank you for keeping in touch and um he want us to uh at least keep him you know said well he's saying that on the offer the tenants they informed the letter dated march 31 been acceptable to the tenants he's saying that the i guess the uh the april and may is not acceptable to the tenants they're looking for additional deferrals letter from kampala enterprise dated 5 26 2020. it's in regards to uh the ppp loan indicating to us that he did applied and and he did receive it he steals that a rent for the two months april and may the deferral is not really helpful to his business and finally a letter dated may 20 2020 from the division of personnel dana clandinen director requesting grs participation in the in a orientation of new employees. That ends. Thank you, Mr. Nims. Chairperson's report. 0:23:53 I hope you can hear me. Stay close to the computer. can you hear me yes all right i want to applaud and thank the governor and his legal staff for the foresight in between bill number 33.0123 this was requirement with is among the dei board members in the hopes of concluding the impending insolvency of the system The system is going bankrupt due to growth under funding by the plan sponsor. The solution is to add credit on the system. That means the board members will require greater expertise. 0:26:13 On February 28, 2020, the data bill was to be vetted by the Government Operations Committee. Members spent tremendous amount of time on non-Termane issues like Atalanas, Carambola, Fidelity Financial Group, Nikita Financial Group, the stock market, and all the figures that they had little knowledge about. No wonder they got it wrong. Dr. Callender, I'm sorry. Is your report submitted in the documents that Ms. Coley sent? Did you submit a copy of that? Because I am having a hard time. I see you're reading it. Did you submit that? I'll finish up first, quickly as I can. 0:27:10 Item number two, the board has no authority and no desire to reduce the benefit that would be paid to retirees to a big promise and annuity by the government that's going out. What will happen is that our annuity will decrease when the system no longer has the funds to make us whole. This was clearly explained by Trustee Borey in his letter to the editor of the Daily News on Tuesday, May 26. Recently it was noted that the system was partly to blame for the difficulties that the administration was having with its financing. Everyone should be aware of the fact that the court case was initiated in 1981. The petition had been given to the system request at that time, or some subsequent time, the present program could have been averted. 0:28:27 The government holds the system significant amounts of money. G.I.s took the government to court in order to get the administration to make payments that we believe were due. There is an action that states that custody should take any action necessary to protect the plan and to ensure continued payment of benefits to current and future retirees and beneficiaries. We will simply carry out our fiduciary duty. And by By the way, GE Act has no decision in the absence of the COVID-19 pandemic. End of March reports. I will give you a copy of that. Thank you, Mr. Chair. Administrator's report. 0:29:33 morning on april 24th i met the evaluation committee to select finalists for the haven site mall program project on april 28th i met with the evaluation committee with uh finalists of the haven site mall roof project on april 30th site visit with the architect the haven side mall fencing project on may 1 i met with havenside roof mall roof contract is selected on may 7th i attended a special board meeting on may 8th i met had a meeting with the actuaries on may 11 i met with havenside mall tenants on may 13 i attended havenside mall transition meeting with wiko on may 15 i attended havenside mall monthly management meeting on may 18 I had a meeting with Havenside Mall Management and Technician in regards to developing an RFP for replacement of a generator system. On May 19, I met with Senator Agnel Bobby Thomas. On May 28, I met with Water Distribution Director, WAPA, Distribution Director pending water issues at Havenside Mall. I also had a meeting with IG Auditor that same day in regards to return to work issues as far as the retiree applications we are now down to 130 applications pending uh the majority of the applications are in calendar year 2019 still pending and so far 2020 we have a balance of 38. refunds from october through october 1 through 9 2019 to april 30th We have completed 462 cases in tune of $5.1 million. Of that 462, 318 are regular of non-vested employees in tune of $4.8 million. We have 57 cases pending overall. The benefits from October 1, 2019 to April 30, 2020, we have completed 41 0:30:35 Machine transcript · UNVERIFIED. Verify every quotation against the recording. Speakers are not identified. VI Update · usvipublicrecords.com · public record, no rights asserted (CC0 1.0) 4 of 13 GERS Retirement System (Board of Trustees) · Government of the Virgin Islands· Retiremen cases, amount of $1.4 million, we have 82 cases pending. Regards to the life certificates, which were sent out in January, we have validated 77. we have eight annuities benefits were suspended and 11 are pending receipt of of the documents benefits suspended meaning that we have stopped the annuity checks until we receive a life certificate or a death certificate is received annuity payments the number of retirees as of May 15th, payroll $8,708. Cumulative payroll from October 1, 2019 through May 15th with pensioners $159,937,046.91. We have added 230 retirees to the payroll from October 1 through May 15th. We have deleted 207 retirees from the payroll from October 1, 2019 through May 15, 2020. The growth retiree payroll for May 15 payroll, $10.7 million. 0:32:50 Our member loan portfolio is decreasing. As you know, the active personal loan, I mean, the personal loan should all expire sometime between now and 2024, 2025. Shouldn't have any loans, active loans after that, only mortgages. As far as operation in St. Croix, we still have a delay in because of the corona situation in regards to the roof situation over in St. Croix. We had an issue with a crystal water fountain in the area there in the bottom in the first floor. That malfunction some time back but the project with a trash dump the trash dump sir is approximately 60% complete and we received two proposals for the security guard building for renovation and one was read one more was requested for three we are recommending replacing three interior doors for security purposes regards to active shooter protection the grs did have a training on this a few months ago regards to the safety of our employees regards to the st thomas complex if you have been here recently you can see we are winding down and the exterior of the building the roof i mean the exterior building is just about complete it have been painted and all the work has been done to about 90 percent complete 10 percent more to go we have an issue with our transformer two transformers are leaking we need so we should be replacing those transformers very 0:34:03 soon it must be replaced another roof project we're waiting for the architect's drawing this is something of importance to us because of the hurricane season again because of the coronavirus protection protective partition and the security desk in the lobby will be constructed as soon as plexiglass that's what it is plexiglass becomes available i think we did receive those um those uh partitions i think yesterday rental and collections as of april 20th we april 20th the month of april 20th we receive 110 418.011 cents for rent and electricity total fiscal year to date we receive 842 146.05 cents our rarages 207 173.89 cents quite high the rarages in rentals justice month of april personnel month of april plus in march and april rest care which is job core april surprise of that that's a federal program housing finance authority april a rare ages in electrical justice february and march personnel february and march rescue job core february and march finance authority the i housing finance authority february and march my recommendations for rents for the tenants commercial spaces on haven site mall will be presented in a document which will be distributed in a separate report any questions trustees any questions for the administrator i have one uh mr chair uh mr nips in regards to the averages for the the government um departments um from april um you know what is the reason for that? Is it because of the COVID-19? I think the letter from Ms. Clendenin, 0:35:57 some time back I submitted a request for poll vote which was not voted upon. Ms. Clendenin of DOP indicated that OMB had cut their budget. So they were asking for a deferment of rent through July. If they cut their budget, obviously their allotments would be less than what, you know, was expected. Now, there are, I mean, I've been in the central government before, so usually you either, you know, cut something. I mean, personnel, you can cut personnel, and that have been done before to pay up written expenses. But I think that's the reason why the central government is behind, because based on what she said, that OMB had cut their allotments. May I speak as well? This is Quendenin. Not only have they cut our allotments, we haven't gotten an allotment. 0:38:06 So we haven't been receiving regular allotments just because of the, and right, it's largely due in part to COVID-19 because we're not getting any revenues in. So one of the ways they are still trying to ensure they make payroll, et cetera, and fill this $150 million gap is to cut budgets of many entities, and they're releasing allotments sparingly. so we don't foresee our next allotment before june at which time we are hopeful we could make some payments our intent and i'm sure the same for justice it's not not to pay but to be able to pay when we when we can it's just that we don't have the funding readily available at this time thank you thank you trustee clinton any other questions for the administrator hearing none committee reports none i don't think we have any for the budget committee okay uh attorney williams the final update on the board manual trustee i mean attorney smith's that we submitted she had no further corrections so do we augment do we move it into the process for accepting it or since we've already made all corrections trustees um attorney smith has looked at it and we've 0:39:17 concurred that everything is in place what's the next step well does the policy committee need to me to discuss that's what i need to find out i would suggest that the policy committee has a meeting make sure everybody's on the same page everybody has reviewed all of the recommended changes on our agreement or you work those out once the committee 0:41:04 Machine transcript · UNVERIFIED. Verify every quotation against the recording. Speakers are not identified. VI Update · usvipublicrecords.com · public record, no rights asserted (CC0 1.0) 5 of 13 GERS Retirement System (Board of Trustees) · Government of the Virgin Islands· Retiremen has done that the committee needs to vote on it and and make a recommendation to submit it to the full board for the full board's review and action okay thank you um policy committee we're gonna schedule a meeting for next next next week um check the availability of everyone and then it'll be on the agenda for for June. Trustee Smith, no committee report. Madam Chair, I do not have any for the development coming because we're not developing anything right now. Yeah. Okay. That's it for committee reports, treasurer's report. Ms. Jeremiah, are you up? Ms. Jeremiah, are you there? 0:42:11 Can you hear me now? Yes, we can now. Okay, sorry about that. Good morning, both chair other trustees. This is the government. This is the government employees retirement system schedule of receipts and disbursements for the month ending April 30th 2020. Receipts from collection, loan repayment, $2,159,055. Year-to-date, $12,053,454. Rent from tenants slash utilities, $114,237. Year-to-date, $857,700. Rent from Havenside tenants, $18,893. Year-to-date, three million sixty one thousand four hundred and fifty five employer retirement contribution eleven million one hundred and forty two thousand four hundred and nineteen year to date fifty three million two hundred and sixty five thousand six hundred and sixty six employee retirement contribution $5,736,183. Year to date $29,036,195. Parking facility $30. Year to date $5,570. miscellaneous 17,886 year to date 11,148,701 for total collection of 19,188,703 year to date 109 million four hundred and twenty eight thousand seven hundred and forty two 0:42:50 disbursement immunity payment 21 million four hundred and ninety nine thousand seven hundred and two year-to-date 154 million 151 121. administrative expenses one million five hundred and seventy eight thousand five hundred and nine year to date nine million three hundred and sixty six thousand two hundred and eighteen personal loan thirty five thousand thirteen year to date one hundred and ninety seven thousand nine hundred and twenty three mortgage loans nineteen thousand eight hundred year to date, $157,174. Retiree loan, $1,294. Year to date, $20,796. A dollar for other loans, year to date, $12. There's nothing for land loans. Refund of contributions, $486,908. Year-to-date, $6,234,489. Allotments to WICO slash management fee, $503,965. Year-to-date, $1,378,925. For a total disbursement of $24,125,288. Year-to-date, $171,506,658. For a net cash deficit of $4,936,584. Year-to-date, net cash deficit $62,077,916. that's in the reading of the report thank you ms jeremiah trustees any questions for the treasurer 0:44:45 as usual i comment on the contributions versus annuities again this month we have didn't have double-digit disparity but how much longer is that going to last you know so that with contributions by the employer is still up is that expect well we know with covid now we're not sure but are they now playing catch up or is that they're paying for past balances because they did 11 million last this month or last month so is that still playing catch up or is that something they're going to be doing currently i think everyone is probably caught up now so i don't think we are going to see this big amount anymore because i think everyone is caught up now yeah so we're going to go back to that double digit or double annuity over contribution because it's nice to see where we were less than five million dollars over in payment than we had in contributions but you know historically we normally have to pay out 10 million or more that we take in this month I mean last month it was like actually under five million if that was the case we may actually be able to survive a little longer but we know drawdowns are probably going to be coming again shortly we hope this government takes this 0:46:47 seriously and take into consideration that we're continuing to drain the system well and i just requested a drawdown for the next payroll storm yes yeah so we just hope that they just keep passing this out and sharing with them our community understands since the The senators aren't taking it seriously. We just have to get the community to understand where we are and how we got there and what's going to be needed in order to get us out of it. Hearing no further questions, trustees. Investment officer report, Mr. Henderson. We need to accept the treasurer's report. I forgot. Hearing no further questions, can I get a motion to accept the treasurer's report? 0:48:34 Madam Chair, make a motion to accept the treasurer's report. Second. It has been moved by Trustee Smith, Mr. Nibbs. Trustee Collwood. Yes. Trustee Bowery. Not voting. Trustee Cohen. Yes. Trustee Liger. Yes. 0:49:25 Trustee McDonnell, absent. Trustee Smith? Yes. Chairman Callender? Yes. Chair Chair? Five yes, one not voting, one absent. Thank you. Now, Mr. Henderson, you're up. Thank you. Good morning, trustees, Madam Chair. Update of the investment fund performance as of April 3rd, 2020. A total plan returned 2.2% for the month. Total equity returned 13% for the month and was in line with its benchmark as our equity markets rallied in April, as opposed to the decline that we saw for the first quarter from January to March. Total fixed income was up 1.7%, but slightly underperformed its benchmark by 10 basis points. 0:49:51 And our total alternatives had a negative 0.6% return. Our Russell 1000 index fund was up 13%, so had a pretty good month on the overall large cap index. Pew Capital returned 2.4%, an outperformance benchmark by 60 basis points. Our U.S. debt index returned 1.8% and our U.S. tips portfolio returned 2.8%. So we pretty much had a good rally across all asset classes for the month of April. What did that constitute in terms of cash flow? 0:50:53 Machine transcript · UNVERIFIED. Verify every quotation against the recording. Speakers are not identified. VI Update · usvipublicrecords.com · public record, no rights asserted (CC0 1.0) 6 of 13 GERS Retirement System (Board of Trustees) · Government of the Virgin Islands· Retiremen So we ended the month at approximately $555 million in total assets. Bear in mind, this total amount excludes the member loans program and also our St. Thomas and St. Croix complexes. So if we look at the snapshot, we began, we had a beginning market value of about $558 million. We had a net cash flow of about $15 million that we took out to pay benefits. We had income of about negative $251,000 But we did have a gain of about $12.5 million That kind of offset that cash flow that we saw for the month Thus ending us at about roughly $555 million For the end of the month, April 3rd As it pertains to fees, investment management, custodian and consulting fees For the month to date we paid $114,000 And year-to-date, we've paid out about $207,000 in fees, and fiscal year-to-date, we've paid out $339,000 in fees. 0:51:34 As it pertains to securities lending, month-to-date, we earned about $800, fiscal year-to-date, about $1,900. So, month over month, we still had a slight decline in assets as we continue to see that steady decline in our assets. That concludes my presentation for the month. Thank you, Mr. Henderson. 0:52:47 Trustees, any questions for our investment officer? Okay. Hearing none. Just one quick question. Overall performance year to date for the entire portfolio is what in terms of percent and dollars? The year to date? Yes. 0:53:16 so year-to-date overall performance and of course um this excludes um member loans and also accounting for our office complexes so year-to-date total performance is about one percent of 0.9 that includes equity fixed income and also our um local alternative assets for the overall portfolio correct and it's just the investment master that doesn't count any fixed asset any any um it includes that that number includes everything except for the member loans and our st thomas and st croix office complexes so all assets excluding those those three okay and that's what the five million is or yeah the 555 million would be all of the assets excluding those those that i that i mentioned prior so the member loans um our office complex and thomas office complex and the same cry office complex okay that's a far cry for when i first came home when it was one point i think was it 1.2 billion when i came home trustee carwood if you look at the graph on the nav report and it goes back to april 2011 you can see where at april 2011 we were about uh 1.1 billion and we've steadily declined to this point yeah so i'm watching it thank you mr henderson my pleasure one question for mr henderson mr henderson in regards to the relationship and communication with um the managers that we still have on board and with blackrock and the custodian are communication still um in manner yeah yes trustee smith um i communicate monthly and i'm sure mikita communicates monthly with with with our current managers um so we don't have any issues at all on that front okay thanks you're welcome and none of the managers are experiencing any employee changes or challenges with COVID they haven't submitted anything with their offices and their and their their work based on what's happening we have not received any communication from the managers um indicating that they've been having any issues okay that would be interesting to see how that goes as we continue to do i know um they're about to open back up the trading floor for human trading for in-person trading so or they just open it back up yeah with a skeleton crew i would say 0:53:52 so it's going to be a challenge moving forward until we until we get a vaccine for the virus it's going to be a challenge moving forward to to normalcy okay all right um so we don't open as we continue mr nips makita is going to be doing the presentation an update or they are on they are on the line morning gentlemen good morning how are you all i'm well hey gustavo and good morning this is leo hi leo oh we still have the cold bit facial oh yes welcome gentlemen thank you very much thank you thank you i was just uh we just joined and um we sent yesterday a presentation that we are going to go over a few slides of that um however before starting with the presentation um i would like to add some color to the last comment about um news uh and um any developments on our the managers that are in our roster so this is one area that you know first of all making sure that the the system has enough liquidity and that the assets are invested in in in ways that are appropriate for uh the situation that the system is the other i think the other aspect that we monitor uh vividly i would say is uh the situation with the managers and making sure that you know any changes any mostly changes in 0:56:58 flows right outflows in managers that could actually have an impact on us not being able to get our monies out and that was a situation in 2008. So for that our research team is conducting pretty much every day surveys with all the managers that are in our client rosters so monitoring inflows and outflows. So far we've seen a very different scenario than what it was in 2008. Managers in fact have not seen significant outflows. Net net actually the majority has actually report inflows of money so because you have you know if you think about it when you think about, you know, one of the few tools that we have advising our clients is actually rebalancing back to your targets. And in a scenario like this, in where you see like the equities went down big time, fixed income assets went up big time, when you're rebalancing, you're moving out of fixed income back in equities. So in general, you've seen managers moving, seeing inflows, even fixed sinker managers because you know um in in terms of uh the the flight to safety as it's called uh also uh have more money towards those uh fixing master classes so overall in general managers have seen so far net net inflows within their strategy so we are not at this point um foreseen any major um any major uh problems uh in that regard you know however uh we should be 0:58:52 cautious and realize that that the situation is continues to be very fluid and as mr henderson mentioned before until we don't have a vaccine or a treatment uh it is very difficult to try to assess somehow back to a relatively new norm. And 1:00:49 Machine transcript · UNVERIFIED. Verify every quotation against the recording. Speakers are not identified. VI Update · usvipublicrecords.com · public record, no rights asserted (CC0 1.0) 7 of 13 GERS Retirement System (Board of Trustees) · Government of the Virgin Islands· Retiremen even without that, the impact on the growth worldwide has been so significant. We just saw the news, another 2.5 or almost 2.5 million people claim unemployment in the past in the past week which actually reflects the past two weeks so even without that you know the back to normal in terms of growth will be will be a challenge so no wishes for now in the short term however it really depends on the duration of it the system in general is invested in in managers that have substantial liquidity and they're big enough and in asset classes that are very conservative so no we don't predict any issues on that regarding the short term so within the stream though we're getting we're getting something out there you go or not It probably would make sense if we can all go into mute. I think there's feedback coming from the board. let's see if that helped it's a bit okay great so if you know if you have Please, we're back. Try again? 1:03:00 I will try back again. If we... We got into... That would be good if we were playing music at the time, but not good for virtual. DJ! Everybody else is mute. Let's go. Here we go. 1:03:38 Now it's been muted. Oh, there you go. That was definitely St. Thomas. All right. If you have the presentation in front of you, I would like to see if you have the presentation We have the presentation in front of you. I will ask you if you can please jump into page 5. Page 5 out of 41 in the presentation that we set has the market returns for the year-to-date, 3-year, 5, 10, and 20 years. This is as of May 8th, so given the volatility of the markets, that change. However, kind of the same pattern applies to what we see on the markets as of yesterday. 1:04:09 You see the U.S. markets cutting half the losses year-to-date of what the internationals and emerging markets have. uh and uh and then you see uh positive numbers uh still within uh the fixed income side of the of the of the returns um one interesting data point on that chart if you see on the 20-year column that is the one all the way to your right you see the first line there is the sap 500 so the u.s equities in 20 years it returned 5.7 percent per year for the last 20 years if you go down to the next five that you see 5.2 that those are bonds and this is and this is 5.2 compared to five because this is 10 so they as this is just as a data point to understand the significant impact of uh what these last three months had in the u.s equities so at this point this is pretty much telling us that uh you would be having the same return for the last 20 years per year pretty much the same if you invested in u.s equities or in fixed income so that's that's kind of you know of course this is just the data point this is not telling us anything that we can build upon but it's just that gives us a sense of the significant impact of the decline on the market within the last three months um what's what's our return on our portfolio over that period 1:05:03 so the return in your portfolio compared to that is um let me give you a numbers so So for the year-to-date, it's pretty good compared to the overall market and the rest of the clients, it's positive 1.6. So we are in the positive territory. 1:06:52 For the fiscal year-to-date, it's 3.6. inception since inception going back uh per year the return has been 8.8 percent so i think it's important to note also gustavo that those performance numbers don't include the local assets they do not include the local assets these are only the assets that are liquid that are tradable uh but just in comparison to what the chat stated we saw in the 20 years you know 5.2 5.7 the the uh portfolio it's 8.8 um they are not exactly matching uh the the the dates however just to have an idea uh which is also uh a statement in which mr henderson uh was talking about uh since uh at the moment that we joined about you know the assets the assets going down from 1.2 billion to the stage that we are today like 500 uh even though we have such a splendid returns uh so definitely this is a statement to show that you know unfortunately in the case of the system again it's not even not a matter of investment it's a matter of of uh cash cash lack of caching and and cash out right a matter of cash flows so um trustee more if you're saying something i think you're on mute yeah i have a quick question um one of the things that the 1:07:24 the board one of the things that the board is usually accused of is not failing to properly invest so if if if you're accused of that and you want to um compare uh the board's investment performance over 20 years which one of these um metrics would you appear to if any uh i i'm sorry i didn't have a a great connection we were talking you were asking you were asking us what should be the comparison uh between the the um the system returns yeah i'm asking if if if you asked um if you're trying to explain or to defend the board's um investment performance or the systems investment performance over the 20-year period which which one of these metrics would you compare to and what would be ours so there there are several metrics that you can use um a good one uh to compare uh to compare to your peers right it should be as as we did in several times uh would be to use um a peer comparison and see how the rest of the peers within the same within uh the same assets under management are performed during the period of time with the caveat at this point that you know 20 years ago the system has twice or twice and a half as much assets than it has today but uh that would be a comparison the other one is you know asset class per asset class uh as a benchmark comparison as it has been during the history of of the plan um so there are several ways in in which you can compare the last 20 years performance when you see compared to uh other systems within the same uh number of assets during the last uh 1:09:16 Machine transcript · UNVERIFIED. Verify every quotation against the recording. Speakers are not identified. VI Update · usvipublicrecords.com · public record, no rights asserted (CC0 1.0) 8 of 13 GERS Retirement System (Board of Trustees) · Government of the Virgin Islands· Retiremen 20 years all the charts of course is a little bit of what we call in the industry endpoint bias right depending exactly uh what is what is the the range that you're talking about in general in the last 20 years has has been performing in in the top in the top uh i would say in the top this ago or 20 percent. Gustafo, didn't we have a chart similar to that several years ago when we were I think was presented to the legislature showing that the system our system actually have done better than some of our payers on the mainland even after the 2008 mess? I think we had something like that before. Sure yeah we we have and definitely we can we can look into it in the time period right now, actually it will probably look even better given the positive performance that we have in the last quarter. 1:11:37 That can be put together, but we've shown that several times. Yeah, this is Leo. So to give you some perspective, the system return over the last five years, five years, let's see, it returned 5.8%, and over the last 10 years, 7.1% annualized. So, when you look at peers, looking at public funds with similar size, between $250 million to $1 million in assets, the median one returned 3.3% over five years. So, again, you returned five point eight so significantly more year-ranked at the very top of that database so I would like I would like like for you to send us something I mean yes of course I expected the debate is going to ramp up fairly soon especially with the coming election season yes we can provide that The debate about, you know, the issue with GRS and there's going to be a lot of finger pointing about why GRS is where it's at now. I know for sure one of the acquisitions are going to be that GRS didn't properly manage its portfolio. And I'd like for you to send us some metrics that we could look to to either counter that claim or put that claim in perspective or something. We will send that no problem. We have that data. 1:12:31 We stopped reporting that a couple of years ago because as you move into more of a dynamic asset allocation, you were investing very differently than peers. But nonetheless, performance is what it is. The performance has been very, very strong. e-plots towards the top stop they sell top port uh no matter what time period you look at so it's definitely not an issue of performance we will provide that we'll send that through mr henderson shortly after the meeting trustee barry because for years we said we have to make that claim every time there was something going on somebody and it was almost always one of our elected leaders would start spreading up propaganda about bad investments by the board so i would make a comment all the time when we compared uh the contributions collected with the monthly annuity payment and we paid out twice as much that we collected i would remind them that that extra that extra money that we had to pay out came from the same bad investments that they keep complaining about because the investment returns is what has paid our annuities for several years for decades almost so every time they said that i would let them know those bad investments is what's paying their annuity for our retirees because we pay out twice as much as we collecting contributions yeah i i i i mean it's not a preaching to the choir here and no one but um but as i said is it's going to be an issue and i'd like to be be armed with some data some metrics that everybody respects awesome one of the points i've always made to individuals who asked me that question i always go back to the facts that in let's say 2009 we had assets of about 1.2 billion we've withdrew about 1.1 billion between that point and now and our portfolio is 1:14:17 still has assets about $555 million. I mean, if you do the simple math, there's no way. I agree with you. The issue with that is that by the time you get through that calculation, you've lost everybody. I understand. I've been there and done this kind of thing. Technically, we were supposed to have run out of cash a long time ago. 1:16:19 When you start getting into those kind of calculations and stuff, you've already lost mostly. I would like to be able to just say simply that, listen, here's the proof. look at our performance compared to whatever you guys give me compared to and I'll end the conversation. Yeah. Start talking about getting into those weeds. Then you start talking about who's to blame. And then I'm going to say, well, you know, you're the one, you legislature are the ones who said we could invest in those kinds of things because you wanted to increase the return and you get into more risky things then you know higher return coming higher risk but you lose you know you lose the argument there you start trying to explain you take take i just want to say listen here are the metrics that people use to measure performance and here's where we stand or sit compared to and give me some comparisons but trustee barry here's something else i should make you chuckle the legislature at one of their meetings was it year before say that maybe grs needs to hire the advisors that are being used by and they name several companies several pension funds on the mainland without realizing that the same pensions the same advisors that they recommended that they were referring to were the same ones that we had long before the other pension funds had them that's that's the issue see you know i mean a lot of when you get into the centers and stuff people those guys read in from text messages that they get on a lot of those i mean you you could see it when you look at the the hearings and and they ask 1:16:47 the question and they have no no understanding or no no most of them don't know no basis for the underlying question i'd rather not have to get into you know um mr henderson um i'd rather not have to get into having to explain what if you go back here and if you look at this side and look at how to pay out and what to pay here are the metrics that people that are universally accepted as measures of performance and here is where we stand totally understand but in the most simplistic 1:18:44 Machine transcript · UNVERIFIED. 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VI Update · usvipublicrecords.com · public record, no rights asserted (CC0 1.0) 9 of 13 GERS Retirement System (Board of Trustees) · Government of the Virgin Islands· Retiremen form i tend to get get it over to individuals when i when i tell them that tell them tell them that way okay okay that's fine do both go ahead so um we will be happy to provide that information uh i really really sincerely hope that this time we have uh open ears uh on the other side to understand uh this will be not the first attempt of uh presenting the uh the information and it has presented in several ways so hopefully hopefully now uh a new voice uh will uh will have a better understanding on the other side but happy to present that information uh uh back again no problem at all um if you if you uh please uh flip to page nine of the report that we sent 9 of 41 This page from a specific data perspective just shows the difference in programs that were put together back in 2008 on the left-hand side compared to the programs that have been put together so far for this crisis. amount of money that is educated also it's uh it's it's very different and it significantly increased from one crisis to the other uh but the point that we're trying to stress here is not just that uh there's this there's a lot that has been done and there's a lot that can be done as well but it's the fact that this can perhaps explain some of the uh what it seems these connections between what the U.S. equities market has been doing in the last couple of weeks and what it seems like a different story, right, when you see that we are moving towards a 20% unemployment in our country. So there's a lot that has to be said about the effectiveness of the programs that have been put together and the reaction that Wall Street has towards those measurements in which has been uh pretty um positive in general regardless of the effectiveness of of the discussion of the effectiveness of the plans in the long term or not you know if this in the long term will will help or not in the short term uh the financial markets are taking this uh in a good note and that might be one of the explanations where you see what it seems this discrepancy between um what where the u.s equities are going and what is the reality down the street um let me see i don't want to uh go through every single uh page uh but perhaps page 12 uh which i mean the good news is you know this is a worldwide problem and the policy responses have been seen around the world you know the major economic blocks around the world has have put together uh measures uh similar not in size but see that scope of what the us is doing to try to uh keep at this point trying to keep the liquidity of the market that is that is the 1:21:00 case trying to keep the money out of the market when you start that is exactly when i started seeing like the biggest problems within within within the financial markets when you're seeing you know liquidity going out as it was it and that was exactly what happened in in 2008 you see outflows going out of the financial markets in this case it's not a financial markets issue so that's the reason why you see governments and federal reserves and central banks around the world putting these programs together to try to solve the liquidity issue that this impact is bringing to the table. I will ask you if you can jump into page 14. This is a chart of the US curves that shows between three months and 30 years what are the different data points to plot this curve. 1:22:52 on the top you have what was this the that curve that was projected in in May of 2019 so a year ago then the green coming down what you see that the forecast of the curve would be in December of 2019 and then you see a big step down of the whole US curve in the sentiment in May of 2019 the shorter part of the curve, the three months to the two, three year, that is pretty much dictated by the movements of the Federal Reserve, while the longer part of the curve is pretty much the sentiment of the economists about what the future looks like. This decrease here has helped the U.S. Virgin Islands system because we have a big chunk of our investments uh in bonds um between cash and bonds you have around 80 percent of the investments uh so the lower the yield curve the higher the prices so that helped us to get that positive return that we have um fiscal year today and and calendar year today on our returns for sure uh and as you see you know the sentiments uh have not i mean what we're seeing is that you know the curve hasn't you know more uh widely and for that for that to happen it would mean that uh it would be some inflationary expectation uh which is honestly in the in the in the short to medium term is it's really hard to see um even so i would say at this point in the long term but you can 1:23:53 argue in the long term you know if if if the uh if uh the the the global supply chains uh strategies that we have have today change in the future from going from global to more uh domestic and localized that will probably bring bring prices up with inflationary trends but that's long term uh in the short term minerals and it's very hard to see some inflationary pressures that would change the product um let me jump into a couple into one or two more slides um slide um 18 please um so we've seen these economic impacts we've seen the supply chain disruptions uh we see the impact in the labor force uh consuming sentiment just people because they are locked down or or don't feel like going out i think that this is uh we we all share this sentiment even though we still some of us have the luxury of of uh of having a paycheck every couple of weeks and and still having a job and and being healthy uh this sentiment of of going out and spending money probably will share the sense of not doing that in the short term um and then the wealth effect that is a little more in the medium to long term which is the effect that a decline like this will have in in people's um uh you know if you know 401k money for us in the private industry and in definitely in the pension plan industry in the pension plan arena as well you know we see I think it's we start seeing more and more you know municipalities state governments cities starting to have 1:25:49 Machine transcript · UNVERIFIED. 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VI Update · usvipublicrecords.com · public record, no rights asserted (CC0 1.0) 10 of 13 GERS Retirement System (Board of Trustees) · Government of the Virgin Islands· Retiremen conversation with pension plans about you know tax revenue dollar is going to be hard to find in the short term and how that is going to affect different city states and municipalities budget and how and the impact of that will have in the that plus you know the impact that they already had on the investment side so it's definitely it's going to there are not still a question marks a lot of challenges ahead um very difficult to predict one side of the other um i think that the the more um um the best that we can we can argue at this point is that it will be very difficult to have any sense of coming back to some sense of normality until we don't have at least a treatment so um page at least uh 21 this is unemployment not shockingly you see that line going straight up on the month of April and we are adding another 2.5 million dollars that's what sorry 2.5 million people unemployed as of today so definitely not the five million that we saw the first week but it seems steady at 2.5 for the time being um is that is that the whole representation no that's up for debate but uh definitely unemployment is moving towards closer to the 20 percent unemployment by at some point in the year um page 25 please um as you probably see and i never i don't know the stage in the u.s but you know in the continent some cities have started to open up uh one with more success than the other i can give you my the point of view of my of my uh state of florida and in particular miami date has miami data has opened for a couple of weeks now essentials and 1:27:48 some restaurants um uh hair salons and and stuff and um in general what you're seeing evolving in the last two weeks it's been uh like uh initial peak of some customers uh going into the shops and then a sharp decline back again people not feeling comfortable going know um the other anecdotal point is that i actually count yesterday i was driving around my son to tennis courts back up and down and counting less than 20 percent of the people that i saw walking jogging cycling on the street wearing a mask so this is start unfortunately um having people having this sense of comfort of going out without a mask and that will probably increase the the possibility of spreading the virus back again and and then we have another but um so i mean next page you know if we if we are looking forward uh let's go so we have the questions it's going to be another second pick on how big that's going to be unemployment seems to be steady so that means that people are not going to be out consuming back again uh central banks are just keep pushing money out into the market to keep that liquidity that we mentioned before so that's kind of good news for the markets keeping the the liquidity out uh so what that means is again this this volatility that we have seen right two days marking up then a sharp decline then going back again so you know whatever is the future an l shape but you i think at this point 1:30:00 everyone discarded like a v-shaped recovery at this point is the consensus is more like a new shape recovery someone they're talking an l shape hopefully not but in stagnation which is the worst scenario um but that it would be the shape a smoothing shape but probably if if you see it with a microscope it will be days going up and down and this will continue this volatility whatever shape that we have uh in the future until we don't have a more of a clear result in terms of um the the uh you know some type of treatment um and and to finalize um page um to finalize on this part of the report page 28 please if you don't mind uh let me uh disclose here that this does not tend to be uh statistically significant uh enough data uh to say that we can we can uh actually conclude a certain trend out of this data because you know the the universe of data that is down here that is all the declines in the market that we have it's it's pretty slim from a statistical perspective however when you go back in history and the history that we have numbers on and review you have like an average of from from the top to the bottom of the market the markets came down between you know 36 and 33 and which is exactly what happened here we came down 34 this year and then you see around between you know whatever is 25 to 40 months of recovery to be back back at the levels that it was before um we are not trying to drive any conclusions other than 1:31:53 you know some clients ask us you know what are your thoughts and it's again the answer is very difficult to predict we are not trying to predict here with this information however it's it's another data point to add uh to to the digital knowledge um and um i think that that concludes this part of the report next we have some performance but i will open up at this point if they are at this point if there are any any questions uh any concerns any comments i have a question when was the last time we did that comparison of metrics do you have any handy or um how soon can you give us an update on that i i i have to apologize but you you get totally cut on your on your question if you can give it back again we had a discussion a little earlier about some comparative metrics and metrics you use to compare um our portfolio performance and yeah i can address that okay so um let me try something here very quickly can you see the screen yes yes okay so and one more second let me try something better i was trying to show the full screen but anyway you can see it here i would assume 1:33:46 can you let me see pardon me i'm not an expert with zoom click on click on view and go to full screen that should help you view full screen mode okay so what you can see here is the comparative performance that i think you were referring to so this data comes quarterly so at the end of march june september and december we can compare the performance of the system versus peers and in the terms of peers we categorize there's some categories that can pre-define in the universe data state the closest to girls is public funds public pension funds between 250 million dollars to 1 billion that's the closest smallest best comparison point it includes roughly 68 peers in the u.s and what you can see is the performance for girls is very strong is the green dot so when you look at the last quarter ended march 31st 2020 it was the best performing 1:35:41 Machine transcript · UNVERIFIED. 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VI Update · usvipublicrecords.com · public record, no rights asserted (CC0 1.0) 11 of 13 GERS Retirement System (Board of Trustees) · Government of the Virgin Islands· Retiremen fun the parentheses at the bottom is the ranking number one as you look at one year number one three years number one five years number one and if you look all the way to the right over 10 years around 21st so still very very strong no matter what time period if you look at it at different time periods it's always been the case that the performance for girls was anywhere from from good to great depending on the ending point performance was never at the bottom or or an issue no matter how you look at it or slice it or at what point in time you look or how back in time you go as gustavo mentioned when you go back since inception into the 80s the fund generated a return of 8.8 so my team just calculated this very quickly we have this data uh we said only we'll uh email this one page addendum after the the meeting ends does this answer the question to you yes yeah very good I'm gonna stop sharing the the screen and continue with the presentation unless there's any other questions at this one okay so here in now this is quite quite quickly I'm on page 31 out of 41 the portfolio is very conservatively position this has been built like this by design several years ago understanding that performance alone wouldn't get girls out of a path to potential insolvency because there was an imbalance between the amount of money coming in and the amount of money going out and that imbalance has been uh occurring for over 20 years um i think at one point in time this when we did an analysis together with the actuary the system needed to generate returns that were at 15 every year and then increased to 25 every year for 20 years to maintain the current status and that is impossible at no time in history has that ever taken place with that consistency and that high level rate of return so when we know that the performance alone cannot help you the best thing to do was to try to moderate any major impact on a drawdown or in other words any major impact from a correction that would cause for the potential insolvency 1:37:29 to occur much earlier than planned and so what we've been working for is towards staff landing at a known date well into the future as opposed to uncertain and potentially earlier because of the crash that would have indeed happened how we've been more aggressively invested so the portfolio has been cut back from risky assets more and more and you can see that on the next page page 32 just about three years ago more than half of the portfolio was invested in equities and it's been cut gradually so that has meant we can still participate but on the other hand we are cutting the exposure every quarter and the performance is what we describe in the prior page here which on page 33 gustavo through some numbers earlier in the month of april were ahead by 2.7 percent for the year today 1.6 percent for the last year 6.4 fiscal year today 3.6 and when you look at three and ten years it's upper seven percent so we're all very very strong performance with very little volatility so another measure when you look at comparative performance is what has been my performance over the last five or ten years and in your case we know for example over ten years it's about seven percent well i would argue that the amount of risk the system took right that seven percent was lower than many of the peers so if the performance is not good on an absolute level but it's very very strong as well on a risk adjusted level think about it the fund did not invest in hedge funds did not lock up a lot of assets in illiquid alternatives it's been with you know fairly simplistic uh tool from stock and bonds primarily and a good asset allocation so very pleased overall with the performance of the fund the fund is quite simple today because we've been redeeming uh in the last quarter redemptions took place with you you know, a couple of index fund strategies so that today, if you're on page 34, this is what you own. Other than the local assets, you own one broad index fund, which is the rest of 1,000 index, the largest 1,000 stocks in the U.S. by size, by market capitalization. You have two index funds in the fixed income space. One is the bond market index. The other one is TIPS, which is just 1:39:17 treasury linked for inflation and then you have one actively managed strategy which is pu a manager out of seattle that has had a good performance overall it's been the benchmark marginally they can also very limited risk then you have a two legacy private equity fund funds that are towards the end of their lives and they are in the distribution phase returning capital to you and the exposure there is about 13 million dollars so this portfolio is very simple if you skip a couple of pages you see how much it cost to run this portfolio it's you know it's seven basis points so very very efficient this of course excludes the private equity final funds which are more complex to figure out the actual cost because there is performance base fee that gets recalculated every every quarter but overall it's very simple very low cost very efficient and is working out very well for the system with that i conclude my remarks and open up the floor for any question thank you for your time these any questions madam chair i have a question um maybe leon and henderson if i look at page 30 of the report where he talks about i believe the balance of the grs assets and unless i'm misreading the report reports it as 492 million plus correct correct but in mr henderson's report for the same period it's listed it as 555 million can somebody explain why the difference yes i'll 1:41:43 be pleased to our report only includes the non-local assets were not we never been retained to advise those assets regardless of whether they are the girth complex uh haven side or the loan programs etc so we only advise on everything else beyond that and the amount of those assets as of the end of the reporting measurement point was the 492 million the discrepancy is what what uh mr henderson alluded earlier those local assets again excluding on in in his report the the two properties workers contacts its business and the member loan progress but I thought Henderson said that his report 1:43:40 Machine transcript · UNVERIFIED. Verify every quotation against the recording. Speakers are not identified. VI Update · usvipublicrecords.com · public record, no rights asserted (CC0 1.0) 12 of 13 GERS Retirement System (Board of Trustees) · Government of the Virgin Islands· Retiremen also excluded them did I misunderstand that Glenville you know you're not you're misunderstandably you're saying Leo's numbers or Nikita's performance numbers does not include our local assets at all my report includes everything except the member loans program on our center Thomas and St. Croix office complex what are some examples of the other stuff even say things I'm sorry go ahead trustee okay so my numbers other than the assets that Makita reports would also include Haven site it would include the two rock do the two pieces of raw land and uh our local loans would consist of um kazi right now all right thanks okay any other questions for makita gentlemen thank you very very much mr henderson could you could you give me a call after this thing or will you give me a number i need to get a little more clarity on this oh no problem i'll text you my number okay in the chat all right you're welcome thank you very much for your time we'll be there to help you so let us know how we can help we'll send you that one page with take 30 performance to mr henderson shortly thank you thank you gentlemen enjoy it thanks next item of business haven site mall update mr nips you have to go into executive session oh sorry oh i had that written down wrong my fault all right so the next portion of our meeting will be closed to the public for matters pertaining to trade secrets or financial or commercial information personal or legal matters or matters whose premature disclosure will frustrate the implementation of the proposed agency action i need a motion to enter into executive session please to go into executive session trustee carwood yes trustee barry yes trustee cohen yes trustee liger trustee liger 1:45:33 trustee liger he's up he's a mute he's trying you need to unmute yes trustee madonna absent trustee smith trustee smith um i think she stepped away for a minute absent Chairman Callender. Chairman Callender. Who's just there? I'm not hearing him. 1:47:18 I think he's out in yes, but he's not. we're not hearing you raise your finger and do a thumbs up five yes two options we're taking a five-minute break like a recess for five minutes we're waiting for the attorney to um zoom in to go over her letter so that's fine well then maybe you can give mr tori a chance to stretch maybe you can yeah i texted her to to zoom in and she has the information i don't see her on yet okay so mr nev's five minute recess so mr tori can stretch your fingers and we await the participants okay she's joined um the story still needs to stretch okay and madam chair i would just ask that um mr henderson be able to remain for this section accepted so we are taking a break you don't need one yeah i do but i just wanted to make it take five minutes so you can stretch thank you okay carrie we're gonna take a five minute 1:48:03 break so if you just hold on okay all right it's 11 52 11 57 please return 1:49:57 People named in this transcript SUSPECTED, and a finding aid only. Names were matched by machine against the spellings used across all 426 of our transcripts, and the title is the one used in the room. Being named here is NOT evidence that a person attended or spoke · only that the name was said. Speech recognition mishears names, so a spelling may be wrong even where no alternative is offered. 8x Trustee Leona E. Smith heard in this transcript as: Smith 3x Trustee Vincent Liger heard in this transcript as: Liger 1x Senator Athneil 'Bobby' Thomas heard in this transcript as: Agnel Bobby Thomas Machine transcript · UNVERIFIED. Verify every quotation against the recording. Speakers are not identified. VI Update · usvipublicrecords.com · public record, no rights asserted (CC0 1.0) 13 of 13