Thank you, everyone, for joining us today for this afternoon meeting. I think the first thing is that we have on the role still Charles Collier, he's absent. Money, beer, Marshall, beer, and then, beer, that, mate, is not here and her is not yet here on the tip. And then do we also add Gary to the rope? Yes, please. Gary. Here. Yeah. All right. Thanks everybody. Now we need to do the virtual trustee attendance approval to confide in the state group. So I ask that each of the trustees who are attending virtually, these state, your remote location, specifically for the record. And then we'll have our motion makers move to allow them to attend. So my fan, I think you're the only virtual attendee that's on the board right now. Okay, so I need to tell you specifically where I am. Definitely. Okay, Paris France. Oh, man. And the other thing is you have to state this for personal reasons. So I will state that for you, good motions are such fun. That is because of the state code. Yes. I'm supposed to say it out loud that it's for personal reasons. Yes, please. Okay. I'm here for personal reasons and Paris Branson. Thank you. And for the record, Nate DePri did arrive at 235 p.m. I don't need to. I'll leave it right on me. So then, Chair, we can do the motion, the work of virtual. Okay, so I'll read the motion from that then. I move that the retirement board approved electronic remote participation by Methan Jackson in today's meeting because she is unable to attend due to personal reasons that prevent the members' physical attendance. Thank you. The chair read it but really didn't move it, so somebody can move the most. Thank you. Thank you. Okay, so Robert's rules, theoretically you should take a motion. Robert's rules, I can't make a motion. You can read it though, which is what you've been in. Unless we are totally short and then you can. Okay, so Martin, I mean you every day. It's always something. So, Martin's a little bit mad because I can't talk to all the folks. Charlie's abstaining. Actually, can I just use Gary in the middle of the turn? No, sorry, yeah. So Gary, how do you vote? Oh, yes. Matt? Yes. Connie? Yes. Marshall? Yes. Thanks. Yes. And her not yet on. So, the essay is awesome. Thank you. And then, Chair Feimei, we'll watch the sea of her joins and at which point we'd be great to stop them to a motion. Okay, I'm good. And we are not expecting Charlie to attend. Yes. What's his message? He did tell me to say hi to everybody. He's doing okay. He is back in assisted living and he plans to attend the November meeting because he wants to wish you all well. We look forward to seeing him at the Navajo meeting. All right, so welcome our guests from Seagull. If you're okay with it, we'll just go around the room and our usual introduce yourselves. And when it comes to you, you can give us a little more background than just I was from Seagull. All right, so I'm Connie Wrightberg and I'm the chair of the retirement board and a pointy of the city council. Chris Blockis and the work at HR. Thank you. I'm Gary for and the elected trustee from the employees this week. So thank you for opportunity to serve. You guys have been with the city for 35 years. I'm a city planner and the deputy planning director. I'm on my retirement horizon. So I've been in the pension plan a long time. I've been a lot of turn to running scenarios for the last few years. So anyway, I'm excited to be hard on this. Thanks. Glad that you could make it on such short, you know, against. Yes, yes. I think you were just a pointer on the election just a couple days ago. Yeah, literally yesterday. Thank you for being flexible. Okay, Nate. So, Nate, I'm vice chair and see manager pointing. I've made it to sell a major manager for the city and. I'll run the one. Yeah. And before I do my introduction, I do want to acknowledge that Chris, although he's been with the city for a little bit as a temp, he is now officially permanent Employee as of Monday. So I'm also very thankful So we're glad to have the partnership for each more. Cindy Mester, Pension Plan administrator I'm Karen Bawa, Director of Finance at the city I'm Megan Horn. I'm a Vice President with Sebel. I was educated in training, does an attorney, and worked, you know, as a practicing attorney for several years doing benefits work before coming to Segal. I like to say I'm a recovering attorney. And I've been at Segal for seven years and I'm excited to talk to you guys about fiduciary duties today. I'm Laura Keller. I am a combined associate with Segal. I am a recent law graduate. I graduated from law school in Pittsburgh, Pennsylvania, in May. And so you put a bar into the bar of the summer and then right after that, I started with Segal. So, and I interned there previously. So I've gone a very well-acquimated prior to my certain honest. Thank you. I'm Robert Relle. I'm a consulting actor at the Seagull. I'm the city's main actor to their pet plan and their pet plan. And then it's here in my role as the Clive literature manager. I'm a part-terred trustee with the police board. I'm Markville J.R. I'm a trustee appointed by the City Council, and I am a retired attorney at work at the Justice Court. Tom Hall, from the citizen of Ballsshar, I have lived in Ballsshar since 2000s. That's my wife and kids and kids are now off to college. So, to hopefully volunteer, I'm accepted and being a citizen representative for the board. Yes. I'm Mary Ney with Mariner. I am the investment consultant for the pension plan as well as the DC plan. And then do you want to go ahead and introduce yourself? I'm Bethan Jackson. I am also a citizen of Falls Church and appointed by the council. Thank you. Eric, can you introduce yourself? Yes, you want me to? Absolutely. Hello. My name is Eric Semberg. I am the deputy director at the North of Virginia Criminal Justice Academy and I'm glad to be here. Thank you very much. Thank you for joining us. Sally, do you want to go ahead and introduce yourself? Hello everyone. I'm Sally Gillette, the city attorney. I'm home with my child today who's ill so I'm sorry I couldn't be there with you but I'm glad to hear the training and get to see your faces. Thank you. Thank you, Sally. Thank you. Thank you, Sally. Glad you could be here. The benefits of online participation. All right. Everybody else on the board is actually here, right? Yes. Yes. Okay. Any petitions have received no petitions? Okay. May it actually hold together the minutes with very quick order? They are on our agenda. And I have a motion to approve the minutes. Just so you know, he cases two and that's a proof. Marshall has always been our motion maker. It may be me, all to you. And you can arm wrestle my fan for it. Are you asking me to do it? No, no, no, I'm just telling you. No. Okay. Is it on here? Oh, here we are. Sorry, sorry. I moved approval of the September 9th, 2024, as presented. Thank you. Thank you. The motion has been moved in a second. I you, the motion. The motion has been moved and executed. I'll call it load. Eric. I'm saying because I wasn't here. Exactly. Connie. Yes. Marshall. Yes. Nathan. Yes. Matt. Yes. May. Yes. And the verb is still absent. Thank you, everybody. Thank you. Thank you. I'm just checking for her. If I could just go back for petitions for a moment, Megan did remind me of two emails that came in that were addressed to staff, not formally, to the retirement board that they are related to the retirement board actions and oversight sawd just mentioned them for the record. We had one employee from CPAS that asked that, as we look at the pension plan going forward, we consider the drop program similar to what Fairfax County at Arlington does, which allows people to retire, but then still continue to work for three years. Very complex and important thing that takes a lot of calculations. So I will just note that we've received that request, but I'm just from from our city, CPEC department, sorry, community planning and economic development services where Harry is actually house. Thank you. And obviously we did the acronym of CPES because it's small. Yeah. So we had that request. And so we've made note of it. And on the staff level, we'll continue to look at it. A second one came in. Both of these came in because we were sharing good news about the pension and the elections and putting out that information. So and the policy around rehiring retirees. So whenever we message out to the employees, it's a good thing because then we get input and reactions. And the second one was to consider how employees of the Constitutional Office could benefit from the pension plan, as well as other HR benefits. And they are currently in the VRS program. And so that is, would be a complex and a major change totally because the whole plan would then have to conform with state code and be totally amended. So we've acknowledged the receipt of both of those, but they're, and we'll put in sort of the staff work plan. And then at some point we'll talk about it with the retirement board that it's the work plan of wind. Those were two employee petitions that we received. And then Chair, would you let me do the quick update on the initial square funding change. So at your September meeting, Mary had presented a recommendation to change one of the funds from the new fine contributions, 57 and 401 plans and the board did approve that and so we have then turned around to the five mission square of our request to make that change. And they have acknowledged that and sent a draft template letter that would be used to inform the disables of that change, which were about 26. I believe. That has not been scheduled, but because they have so many clients that they're changing this score, we are scheduled for January 13th. January 10th. January 10th. First week of January. Yeah. So it will be a period of time before this is executed. So since we were meeting, I wanted to give you that update. The participant notice will go out the minimum of 30 days prior. So participants have been noticed into some. And the other thing related to this, which was in the packet we sent out, we did get a media interest in that from our online financial news outlet that tracks us and they were reaching out to all of their monitoring all the plans that were taken in this action. And so I put the short blurb in the packet that they did after a few email for nations. male coronations. And it did give me a time to coordinate with our new communication director because she had not been involved with media outlets related to the pension. So it gave her a good education orientation because she wasn't quite sure how she would respond. So it was a good leverage. So just a quick update on that. She's also a neighbor. So we have this like the environment. I don't know if I can say no one of them. completed the phase of in-person interviews and reference checking. And so now we're moving on to the phase of cost proposals. That is where we are. I want to just, I want happy to say we're moving forward. And I think on track to get this done soon. All right. moving forward and then the contract to get this done soon. All right well with that we come to our main event for the day. So excited to have you guys here for this fiduciary training baby for pulling together the information. In general I think there are plans and that needs to about, should be about an hour, right? So we'll target that time frame and I'll get like you guys decide you want questions throughout or hold them to the end. Yeah, no honestly it's more fun for us if you, if it's a conversation, so we would definitely appreciate it if you interrupt. But if you don't think of it until the end, that is fine by us. I don't know. What is yours? I did print out a couple of copies of this slide, in case anyone wants a hard copy. I go green and I didn't print out enough for everyone. But anyone wants a quick. Thank you. and once a hard copy, I go reading and I get the printouts and up for everyone. There's a lot of questions. Thank you. Thank you. And there's a wonderful welcome. Thank you. Thank you. That's a lovely rig. Oh, thank you. Thank you. Perfect. The last one. Thank you. Thank you. The last one. Thank you. The third. Could you have a little bit of an agenda? For example, the agenda is kind of talking about future scenarios generally. And then in talking to Cindy and so you really some, you know, some things from, you as well. We heard that you might be interested in hearing a little bit of the litigation update, a little bit about the trends in ESG, as well as the Virginia Attorney General's opinion, and how that affects you guys. And then if we have time, we have several slides really on Secure 2.0. And we're focusing on the updates, because it's like 90 different provisions. So we just didn't think you had the time or stamina. First off, could you share your standards? Can you confirm you can hear Megan all right? Sorry, I was talking while that was off. I'm here, yes. Perfect, thank you. As you can see, we've put these specific best practices in these different buckets. But in some ways, those are sort of false divisions. We really overlap and intersect with each other. And so I'm going to hit a couple of highlights, but really everything is here as important honestly. So one is know who your fiduciaries are and ensure that they know that they are fiduciaries and that they understand their role. You always want to have documented policies and procedures particularly for investments and operations. And just as important, if you need to follow your really policies of procedures. You want to exercise due diligence when hiring vendors. And again, you want to document that process. Your context, your context should be detailed about the scope of work and otherwise, again, documentation. I think you may see a thing. You also want to monitor your service providers as well, of course. On the same lines, you want to monitor your plan operations and ensure that they align with planned documents. Periodically, it's a practice to audit your operations as well and ensure that operationally things comply with not only your plan documents, but the applicants that are within state laws as well. And then of course, in the process of doing an operational audit or a plan document audit, if you find many errors, you want to correct them. And last again, document documents. All right, and then ask the question. So do you see, when you say like, voluntary or vendors, do you see that as being like a once a year, put together a little report card and say something or is it just sort of an ongoing, things are going well? I would say it's more of an ongoing obligation and really it depends on what's going on. If your investments, for example, are kind of bumping along and everything is looking good, then maybe they don't need quality as much scrutiny, for example. But of course, you would defer to your investor advisor to provide you with guidance about that. So I would say it really depends on the facts and circumstances. You need to kind of pay attention to what's going on with all of your vendors and service providers. And then if they're kind of red flags, you want to dig deeper. Okay. Let's back up with Tiny Bed. Who is a fiduciary? So at a really fundamental level. It is anyone who is a named for to share, who is identified as a future, that's the easy one. But also anyone who exercises any kind of discretion over the management of the plan or plan assets. So obviously this is going to be the board and investment advisors. But depending on the level of discretion exercised by fund staff, it could potentially be fund staff too. So you do need to dig into what is it that folks are doing and what kind of discretion and management do they actually do. Now, the sources of fiduciary responsibilities in governmental plans is a teeny bit a bit more complicated than in the private sector. And private sector, of course, is a RISSA. That's kind of the beginning and the end of it. Public plans aren't subject to RISSA, obviously, but RISSA still can provide us with helpful guns, as far as best practices and things to guide us. We do don't have the internal revenue code and the exclusive benefit rule retirement plans, all plans need to be administered for the exclusive benefit of members and beneficiaries into deferred reasonable expenses. Then you also, of course, have state and local law and you have court cases. Perhaps most on hopefully you also have of course, have state and local law and you have court cases. Perhaps most, on hopefully, you also have the United States Constitution, but that's a little abstract. That's why we're getting these three. Rene, yes. Are we trying to keep this door open? Is that from my room? Are we not directly? We are, but if this disruptive, since it's a glass door, we'll watch it and let a public person lose. Thank you. For us and the municipal government, what is the force and effect of an opinion by the state of Georgia? The legal force is an effect. Yeah. So I would say that it is binding. I think you're referring to the one on environmental social and governance investing. And definitely I'm going to go into that in more detail. But certainly, I would describe it as binding. Do you want to touch on the aristof, New Share rules rule and some of the affirmative duties, again, you know, these, although not specifically binding on the plan, certainly helpful to think about how to how to go about things. So, of course, act prudently. That's one of the obvious ones. You want to diversify your assets of course, to both minimize large losses, which is written up there, but also to hopefully maximize your current softwares. You want to comply with the plan and applicable laws and any applicable opinions as well. That's a big one. You want to select service providers carefully and monitor their performance and potentially if there are any conflicts of interest that may arise. You also have a duty of loyalty. So again, that exclusive benefit role kind of tax code plan assets maybe is just exclusively for paying benefits and to frame reasonable administrative expenses. You also support when it's created with your family and participants, possibly almost what is the point of having a plan if your members don't understand their benefits. So how does this relate to the board? The board, of course, has fiduciary responsibilities. And the individual board members are themselves fiduciaries. fiduciaries standards are the highest standard of prudence and loyalty so this is not like a necessarily a common sense good faith kind of thing you know you guys as you can as demonstrated by this training right now you guys take it seriously you really really think about it, you really dig into it, and that I think is demonstrative of that highest standard of proven components. There has been a little bit of fiduciary litigation recently. Now, it has been in the context of a recent Department of Labor rule on investment fiduciaries. Some of the specifics are a little interesting. It's whether advice to a plan participant who is terminating whether that participant should make a role over to an IRA or not. And so that's a one-time piece of advice, whether that is fiduciary advice or not. The DOL's final role said that it would be fiduciary advice that has been stayed however so it's stayed by the Fifth Circuit Court of Appeals until further notice. Again not binding on you guys but you know that's the level on which you know you should be thinking about your fiducications. Oral argument was just held in Texas District Court in July, so it's still, you know, it's very, it's right now. We're watching it very closely. Then, in the technical education, for the moment, I have been turned over to my colleague Laura to talk about some really really significant Supreme Court decisions that happen lately, but for those that live in breathe, the labor and tax regulations, they like roughed our worlds. So I'm going to start with a little bit of background information. In 1984, the Supreme Court issued a decision in Chevron, nurses and RTC that had had a massive impact on the field of administrative law. In Chevron, the Supreme Court established what is known as Chevron Deference or the Chevron Doctrine, which essentially was the standard for reviewing the agency's interpretation of a statute. Under Chevron, if Congress directly addressed the issue in a statute, then the courts inquiring and there. But if a statute was ambiguous or big, then an accord must defer to an agency's interpretation of that statute, as long as it was not arbitrary and capricious. So essentially, as long as it is reasonable. And that is what is known as Chevron's deference, deferring to a reasonable agency interpretation of a statute when an statute is iniguous. So over the summer, Chevron's 40-year-old president was overturned by the screen court in the Loper-Brite decision. Loper-Brite enterprises versus Vermont know involve two commercial decision companies who are challenging the Magnens and Stevens Act, which required fishing companies to allow federal observers on board just to monitor what they were doing and to prevent overfishing, just for some data collection. In Loverbright, the Supreme Court analyzes the Chevron decision in relation to the Administrative Procedures Act or the APA for informally. The APA is a federal law that governs how federal agencies make rules, adjudicate disputes, and how they interact with the public. In lower rank, the Supreme Court held that Chevron is inconsistent with and has violated the APA and then were must be ruled. The court emphasized that agency interpretations can influence, of course, decisions, but the court cannot be required to rely on the agency's interpretation simply because the law itself is vague. And the court in Loverbright also noted that courts may defer to agencies interpretations of facts within the agency's own expertise. So this case basically will take us back to the pre-shutter on standard of deference, which was found in the Skidmore case. The court applied the lower-bright decision prospectively which theoretically would have protected all of the prior decisions that involved Chevron which is really was really important because Chevron was one of the most cited cases since it was issued four decades ago. But then a few days later in the corner post decision, the court held the statute of limitations for challenging a regulation is six years from the time the plaintiff is injured from the regulation rather than six years after the plaintiff, rather than six years for when the regulation is issued. So this holding significantly weakened the language in the lower right decision which protected all regulations and old sheriff on cases. So after lower right challenges will likely have an easier time succeeding. The court can no longer defer to an agency's reasonable interpretation of the law when the law is vague. But instead, the courts must use their independent judgment in determining what the best interpretation of law is, which essentially gives more power back to the courts. And so, yeah. And then you're going to add on to it. I was wondering if you could take them and translate it to how it impacts us. Absolutely. So whenever there are tax regulations, for example, we have to ensure that there is something in the tax code that has delegated the authority to the Treasury Department to promulgate regulations. And under Chevron, there would have been judicial deference toward any of those tax regulations because the internal revenue off, the internal revenue service and the Treasury Department, like they're the experts, right? This kind of calls all of that into question. Now we have already seen so the big final rule, final federal rule in benefits that has come down since these decisions is actually, it's the mental health parity rules, so not applicable to you guys. But what we did see is in the preamble, there's a lot more discussion about the nature of their authority to do this role making. And so that's kind of our expectation going forward. But of course, we're also hoping, hoping that Congress cooperates and is a bit more specific about agency differences as well. DC Webinar High Booker. So we also included a couple of cases that focus more on DC plans. I understand that it's sort of the DB plan, the op-ed that are our clients, but we thought you might be interested. There's a lot more going on in the DC space on this thing. And that's okay because the retirement board just recently, let's point it by Council on the city code to oversee the DC. So it's very relevant. That's excellent. So if you're at all aware of the current DC world, you are probably aware of fee ligation. And so this has been dozens of cases at this point, including 401K and 403B plans, but also 457 plans, challenging fees charged by investment managers. The trend for a long time had been allegations that fees were too high. This was actually starting to pivot a little bit, which we'll talk about in a moment. There was a Supreme Court decision in Hughes versus Northwestern a couple of years ago that held that fiduciaries have a continuous duty to monitor investments. So again, this kind of speaks to that duty to monitor. And this includes actually offerings in a self-directed and a participant directed plan that what you offer on your menu also requires that level of fiduciary scrutiny. And I'll bring a diverse menu as itself, not sufficient. Diversity alone is not good enough. You do need to monitor more of that. So it has been more than dozens of cases, once hundreds of cases. Most courts what we're finding had been reluctant to dismiss the allegations in early stages of litigation. And that I think pushes a lot of plans into attempting to settle, which kind of creates almost perverse incentives, I think. Because you're like, well, even if we don't necessarily have a good case, it's really expensive for plans. So let's go ahead and do it. And so I think there's some suspicion of, I don't want to talk about it And so I think there's some suspicion of, you know, I don't want to talk about it about lawyers, but there's some suspicion that the plaintiff's bar is kind of strategically going after that. Now, in just the last few years, there's been a number of cases against plans that offer specifically the BlackRock target date fund. So BlackRock is not themselves spending as a defendant. It's plans that offer the TBS. And now, target date funds, as you will probably know, are particularly attractive because they are relatively inexpensive, from your TBS and index funds. You know, that attractive because they are relatively inexpensive, TDS and index funds. That's why they are attractive. And so this kind of turns the previous arguments on its head and saying, you only pay attention to low fees and you didn't pay enough attention to the investment returns of these funds. So it's kind of a no-one situation in the policy. Now, with that said, most of the defendant plans have been victorious on motions to dismiss, which obviously is a good sign. You don't have that push towards settlement that you would have otherwise. With that said, there are two that have moved forward and have survived emotion to dismiss. So for those of us that are not, that haven't litated in the past, emotion to dismiss is a somewhat preliminary, kind of procedural step. And the standard is assuming the plaintiffs' factual allegations are true, the plaintiffs could prevail as a matter of law. So definitely, if we look at everything in a pro plaintiff's life, then it may be theoretically that they could win. So it's a little bar. Yes. Do you know what's the focus? The plaintiffs' bar litigation in this area? Focuses on the alternative funds, the asset allocation decisions on one hand, their fees, trust by the underlying instruments. It's in either or both. by the underlying instrument. It's in either or both. Would you know? Yeah, I'm reluctant to say either or I think it's more likely both. I do want to have a hesitate to call the BlackRock target date funds as much of it trend. You know, it is much more recent and we only have those two cases that have even gotten passed a motion to dismiss. But it's such a quickly evolving area and there are so many parties that are looking at this that I would hesitate to say, oh, it's always fees. So it's always allocation. You know, this is an excellent example of, well, wait, we thought high fees were bad. No low fees are bad. I also wanted to mention use of planned forfeitures. So in 2023, the IRS proposed some regulations codifying what had been its previous position on use of forfeitures. And so forfeitures would be when a non-vested participant terminates, and they're not vested so they can't take their money with them, then those assets are forfeit. And the IRS for a long time said that forfeitures can be used for three things. They can be used to pay administrative expenses. They can be used to increase benefits,, they can be used to increase benefits, so put a dollar in everyone's account, or they can be used to reduce employer contributions. Just as a point of clarification, we're just talking about the employer contributions. Yes, if they're not vested in, employees are always vested in their own contributions and that, so we're not talking about those ones. As of the thank you for fair time. Yeah. So they're going to handful of cases file so far that challenge plans use of forfeiture assets, specifically when they have used forfeatures to reduce planning attributions. Again, something that is allowed by the IRS rules, but there have been some specific cases where the planned document specifically says that forfeitures are to be used to reduce administrative expenses. And so then the problem is not so much how they use forfeatures. It's not confined with your plan document. So still a problem, of course, but a bit different. One, you know, really big example of this, though, was in September of last year in which the DOL order a company to restore more than half a million dollars to its 401k plan. So, you know, all more reason to make sure you know it's in your plan document, your plan rules, and make sure that you comply with your plan rules. And so this also speaks to, you know, going forward, you may want to consider ensuring that your plans say exactly what you're going to do with them or to provide you with a certain amount of leeway. But you know the again the worst thing that you can do is have a written procedure that you then don't follow. Yes, you have that stick. Can you, before you go, the last bullet on that page that is number of lawsuits were filed for improper views and it said plans gave the fiduciary discretion. When you say plans, you mean just, are you saying the planned documents that they have discretion and they use discretion and then they some would file the lawsuit. So yes, that is happening. I would not expect those to be successful. Again, kind of the DOL precedent there is contrary to plan terms, but they're have got a handful of lawsuits filed on the basis. So the plan document says you can have discretion. The administrator was ever in charge of the plan, making plan decisions, use their discretion in someone filed a lawsuit saying excelling. Is that only for one case in order to sell in order is that also for a benefit? And so this would not be for defined data-fit plans generally. Forfeatures don't come up as much. There are some forfeatures and those same rules apply. We have not seen litigation in that space car. Have you seen in a I mean still defined contributions but for example we're for the 2017 a 401A versus a 401K. So how are you seeing that environment? So I'm only aware of cases against 401Ks, but in theory, the same, you know, the same theory would apply to a 4013 being a 401. I just thought that would be kind of helpful to put that context for us. Here, all of the related parts of the We're going to be going right in our 457. Yep. Is that all employee contribution? Yeah, 401A is our employer coaching. All right. Yeah, even more the Connie's point in that case. Yeah, the money that the employee puts in, they are always asking that. But I think even the money that the city puts in there's still. Certainly the way our plan is written the 401A is bested to be participants. Any other question on litigation or perpetrators? I wonder if that happened how to talk about the history of ESG a little bit. It's a highly politicized item. And so I think talking about the history kind of helps us contextualize it and think about it in and less heated kind of a way. So ESG stands for environmental, social, and governance factors. And so this can refer to a number of things. Environmental would include things like climate change, reliance on fossil fuels, efficiency, social can work for two things like diversity, equity, inclusion, labor practices, product safety. These are all pretty broad items. And then governance, board composition, which can again kind of bump up against DEI, but would also include like ethics, of course, and transparency. And then I find the history of ESG really, really interesting. So, you know, basically as far back as you've had people investing in things, there has been something like ESG. And so, for example, the Quakers and Methodists discouraging investment in the slave trade back in the 18th century really goes that far back. I would say in the modern era, it really starts with the movement toward divestment of assets from South Africa. And so I think that is a particularly good place to sort of discuss it in detail on kind of what the issues are. So the question is really from the investor's perspective, is the investor taking money out of a South African company is that an effort to push South Africa to reform their apartheid or is it a statement that we think that companies based in South Africa are unstable because of the existence of apartheid there? There really are a lot of these two ways that you can think about it. You can see however how when you bring that up to talk about something that's more controversial currently, how easily it's going to be equal to this list. And then we're just going to bring us to anything more than 20 states have either proposed or adopted actually anti-ESG regulation. Even more recently and from the rightly the perspective, recent presidential administrations have kind of gone back and forth on this. The Obama administration had sort of an all things being equal rule where you cannot sacrifice return but you can't accept greater risk. But if two funds look more or less the same, then you can use it as a tiebreaker. ESG can tip you one way or another. The Trump administration really kind of reversed that and used the financial factors rule, which said that any investment decision had to be made solely on pecuniary factors. And you know, specifically said pecuniary is dollars only, it is not ESG. And in order to consider ESG even as a tiebreaker, you would need significant documentation. Again, with the Biden administration, a bit of reverse of again, some of the executive orders issued by Biden, were things about supporting sustainability investments, supporting Indian jobs, things like that. And then the final rule that was issued under Biden, removed the pecuniary, non pecuniary analysis entirely and kind of took it back to ESG can be considered if it's relevant to the risk return analysis. That's a prize. This has been heavily litigated. The final rules have been challenged by a number of Republican state attorneys general. It really buzzes me that says state attorney generals. I'm really sorry. In the middle of all this, Chevron was overturned. And so this case continues to kind of march through, but all of a sudden, kind of the chevron rub was pulled out from under it. And so the DOL is still asserting that it had authority to promulgate this regulation absent chevron deference, but this is the perfect example of what very like what is happening. And so again, you know, we're watching this very closely. And his really gorgeous day, the rule. I believe, Texas tried to, but the fifth circuit, um, remanded and did not actually stay at, I believe. This brings us to the Virginia Attorney General. This is a quotation from an opinion of the Virginia Attorney General to Cindy forwarded to me that she suggested that you guys would want to specifically talk about. And now this opinion was not about your plan, of course. It was about the Virginia retirement system. But the Attorney General does say, you know, in no uncertain terms, that fiduciary duties of the board would be inconsistent with making investment decisions on ESG rather than financial considerations. And it kind of brings back that concept of pecuniary where financial factors being completely separate from environmental social governance. But some people certainly believe that. Others jump. Now, I do believe that this is binding on the state because the DOL guidance on ESG doesn't govern you guys at all. So it's all state law that you have to rely on here. And so I would say that this decision does govern foster. And just for the group, I brief Sally on this and Sally's on here. And I feel free to chime in if you want or just monitor, but it is something that we will want to look at because it is a journey general opinion specific to VRS. So how does that? Because our pinch of pans are in a different code section. Attorney General, opinion specific to VRS. So how does that because our pension pans are in a different code section? So I think we need to make sure we look at it holistically. So I just put that as a pin for maybe our a priority somewhere in the work plan and maybe for our new law firm. The other thing though is that you all have been very intentional on your investments. And so I think the practice has been done by the retirement board with the input of Mariner is prudent. You guys are looking at the return. You're looking at the fees. You're looking at the underpinning of it. And we always receive information on ESG. As Mary does provide that comparison for you. And we know City Council wants that as a focus, but you've never used it to make a decision. You might have it considered as part of your time breaking as the OLL had worked it. So I think we'll, unfortunately, right now we do not have any major investment decisions before you while some of this plays out. So I just wanted to give a little context to that and since our city attorney is kindly joining today's training to also let you know that she and I have talked about it. Now my next slide is about challenges with compliance of this situation, which I think Cindy pretty handily went over right there. You know, and it comes down to yeah, you know, can ESG be separated from financial factors that truly hard line by the way? There has been some case bomb. So I would not consider any of this as inconsistent necessarily. None of this would would overrule, let's say, the Virginia Attorney General's opinion, although arguably there may be some inconsistencies. But as you can see, you know, we have the Maryland Court of Appeals is one of the opinions. The Supreme Court's decision in duty offer kind of bumps up against this concept of non-puny area benefits, but doesn't it wasn't really about ESG. And then in the New York, the District of New York, a federal court, they took completely the opposite position and said that there is no violation of loyalty or proofs when you take a look at ESG and whether it itself provides a financial deficit. So, you know, my best and of course, deferred accounts long this, my best suggestion here is that this is a thorny issue. And to the extent that the board does determine that ESG factors are relevant to financial decision-making, decision-making, that documentation tying the financial issues to the ESG issues and making sure that you make that connection that needs to be defended or that needs to be documented thoroughly and you should be prepared to put in a position where you're not to defend it as well. Oh, you're not talking. So if you have some more slides on the security point out, if anyone wants to talk about these, you can go ahead and ask me for that. Well, I'm not a security point out that. So you all probably remember, of course, that there was the initial secure act and then secure 2.0 really kind of built on the secure act. And so a relatively recent IRS notice from earlier this year kind of pushed all of the amendment dates to the same place. And so for governmental plans, it would be the first plan you're being on or after December 31, 2029. And so that gives you some nice wiggle room to the extent you need any legislation passed. The effective dates, however, do remain the same. That's only the written amendment. And it's also, we should note here that the delayed amendment is really only permitted if you operate in compliance with the legal changes since the effective date. Now, I cannot possibly talk about security 2.0 without talking about the increase to the required beginning date age. So the required beginning date is you all, you know, I'm sure already know, is the date of which tax law requires participants to begin taking distributions. For as long as there have been a requirement of distribution rule, it has been the age had been seven and a half is technically as you all, you guys all know, April one of the calendar year following the calendar year, which you turn seven and a half. But it's a mouthful. So just use the age of the calendar year following the calendar year, which you turn 7.5. But it's a mouthful, so does it use age? It's a bit difficult. So the Secur Act increased the age from 7.5 to 7.2, and then Secur-2.0 increased it again. So why did it do this? At the time of the passage of the Secur Act, really everyone agreed that 7.2 was not enough. Lifesc spans have been increasing for years and years and years. But of course, under the present political climate, everything passes through our revenue spending bill. And it's very expensive to increase the required being day-to-day age. And so, you know, they kind of did some willing and dealing. And so initially it was only increased to 72. By the time we secured 2.0 it was passed. I guess they found some other revenue razors, and they gradually increased it initially to 73 and then to 75 and 23rd 3. There is actually a little drafting error in the insecure 2.0 for those born in 1959, but we did get some, there's proposed rules, there's some sub-regulatory guidance as a letter from Congress that does all clarify, yes, this is what we meant. So even if the plans want to amend before they are required to, fortunately we can at this point, even though the public law is a little bit of a mystery. So I included a note about items that are mandatory and the types of plans that they apply to. This is of course mandatory. I will note however that some of our clients and number of our clients really have opted to kind of keep the seven and a half required beginning rates, which is not really keeping it. What they do instead is they include the statutory increase, but they don't change operations. They decide that they want to continue requiring participants to begin distributions at seven and a half. The reason for this, I understand, is that it can be that once you reach seven and a half, you have to pay the defined benefit plan has to pay an actuarial increase. Now some actuaries have told me that, you know, it's six and one half, it doesn't have the other. I'm not an actuarine, so me that it's 6.1 half a dozen of the other. I'm on an actuary, so I defer to you guys. Another significant change is an increase in catch-up contributions. So, of course, currently workers over 50 may may catch up contributions up to, you know, a limit. And so that limit was increased to 7500. And sorry, it was increased from 7500 to 10,000 for this narrow range of individuals between 60 and 63. And it's the greater of 10,000 or 50% more than the regular catch up amount and it's going to be indexed for inflation. This is also mandatory. Also in the realm of, this is a really false slide. There's a lot going on. So it's a really complicated issue. So catch up contributions for highly paid employers and employees. And that is employees with fight a compensation over $140,000. Catch up contributions have to be rough now. Initially, this was going to be effective on 2024 this year. But there were a ton of administrative insurance and how this is going to be effective 2024 this year, but there were a ton of administrative concerns and how this is going to be implemented. If nothing else, every plan would have to add rough contributions and that is not that much time to make that happen. And so the enforcement was delayed until January 1, 2026 giving us a bit more wiggle room, but there is still quite a lot of work to do. You have to get the payroll administrators and your retirement record keepers to talk to each other, which you know, getting folks to talk to each other is not always the easiest thing. And so there's definitely work still to be done. The IRS has asked for comments specifically on a couple of particular positions, but I think this is also an opportunity for stakeholders to kind of continue to weigh in on, okay, like how is this actually supposed to work and try to get some additional guidance on implementation. We are hoping that we have proposed regulations very soon, hoping no later than early 2025, because again, that implementation lead time is gonna be significant. And this is, of course, mandatory change. I should have mentioned this earlier, but you can see that on a couple of the slides, I've included a URL to Seagull's web host stand out this. So if you think of questions later and don't feel like calling me, or you can totally call me, there's a web host there as well. Did you notice the issue for our client and do we currently allow a rough contributions? We do allow a rough contribution to the 450. Okay, yeah. So we already have that mechanism in place. Okay. Now, a topic that has gotten a lot of conversation, but I actually haven't seen that much uptake on, has been assistance with student loan requirements. And so the way that this works is that DC plans can make matching contributions based on student loan payments instead of or in addition to employee contributions to the DC plan. I think this is also the slow update has also in some ways been a result of kind of the challenges and implementation, but this was initially effective for January 1, 2024. There has been some interim guidance issued and regulations are expected, but again, I think that we're really waiting on those regulations for additional information. We do have a couple of additional rules that we know about though. The employer may not limit the type of loan, so like private loans versus public student loans. The employee must have a legal obligation to repay the loan. So, so if your parent is a co-signer, then the parent can take advantage of this matching. If the parent is only a guarantor, then they would only be able to take advantage of this matching if the child defaults. There are several items that are required to be certified when an employee requests the matching. And it says, look, this is the student loan payment that I have made. There have to be reasonable procedures established and there's also been another request for comments and so I think we have a couple days left if anyone has strong feelings left. Now this is optional I should say. No plans have to make this available to their employees. But it is something that there's a lot of conversation on student loans and loss. So also, you know, a significant matter of discourse in recent years has been the low savings rates among kind of the general populace. And so toward that end, there has been some discussion about, well, how can we leverage retirement assets to enable people in financial emergencies to try to use that money without treating it like a piggy bank? So these are also optional features that plans can put in, but are not required to put in. There are two different variations on emergency savings kind of concepts. The first is what have been kind of referred to as a side car account. So like it's a little savings account that's next to the DC plant kind of. More formally, it's called a pension linked emergency savings account or a plus-up. Of course, we like acronyms. It really does not. Let's call it like our review option. And so this I think is a little bit more administratively challenging because you do have this separate account that you have to administer. There are some additional checks on it. So for example, plans would suspend future participant contributions to a Plessa after a withdrawal has been made. And so there are some checks on it. But again, there's a lot of concern about enabling, making it too easy to withdraw money from a DC. Would this be considered post-task? Because it would be, so yes. So the, yes, we consider post-task. And any employer match to a plus that specifically would be treated as a raw contribution post-taps and any employer match to a plus us specifically would be treated as our raw contribution plus tax as well. Now, the other type of emergency savings vehicle, I think I'm saying here 2.0 is much, much easier to administer. It's kind of like like hardship, distribution, support, qualified emergency distributions where you can withdraw a very small amount of $2,000 out of your DC plan. Again, optional. I also haven't seen a ton of take-up of these two with PIDER. Again, there are limitations on it. You can only do it once every three years. There is an option to re-pay, and you cannot take, once you repay, you can withdraw again, even if three years haven't passed. And then this would be exempt from the 10% premature distribution penalty as well, although still subject to income tax. There's also a request for comments on there. One item that some people are concerned about is that at present, self certification of your unforeseeable or immediate financial need is permitted, and there's some concern about, well, is that a little too kind of loosey-goosey? And then same thing about repayments, how should that work? And there's a request for comments. So along the same lines, um, if your plan provides for unforeseeable and competency distributions, um, 450-7 review plan are now committed to accept self-certification of the unforeseeable emergency. I think in general, we are softly advising against plans enabling that. You know, we just think that there's a lot of opportunity for abuse and we, you know, we don't think that there's a lot of opportunity for abuse and we don't think that plans, it's in plans or participants best interests to make it that easy to withdraw money. What kind of minister here for home? Oh wait, would that be of, if we were offering that, and we're at a larger, larger use of it? Well, our record keeper is Mission Squares, we have to make sure their system and process can do it, but then it's gonna come down to HR to receive the requests and certification and do the transfer of paperwork back and forth and then coordinate back over to finance for any of those tracking that we might need to do on our match side, which I'd have to look at. I haven't looked at that, but most of it would be Mission Square II, HR. Does the land currently allow for a merchant ship of jobs? Yes, that's. So the hardship we have the process, we do require some cell certification. So it's the increased workload, if you like, on the niche, the sidecar and the emergency piece, and some of the other optional ones. Yeah, I guess the cell was asking us, like, what the cell certification is that only, well, me and the cell certification case is that only well man in cell service case but there wasn't and there was going to be a HR certified. Right now it's a hardship they charge receiving the paperwork. So when someone makes a request for a hardship with no, they have to bring documentation out of hardship and there's a select number of instances that would qualify as a ship. Very specific, the medical, undersea medical bills, the eviction of this need to provide all that documentation and list other assets and monetary resources in your application. And then that needs to be signed off by the HR director before it sent to Mission Square Group. You know, we have as a follow up from the last meeting where Mission Square was still. The report out to you all, Comprehensive questions, we have some questions there. They have given me an initial response that want them to fill it out a little bit more and then we'll bring it back. But a lot of the stuff for them to execute this stuff means they need to update their system, not just for us, but for their entire portfolio. And that's really the case. I think for almost all those security points up, it's really going to significant burden for record keepers. But then the policy question of whether we do that at all is now before we retire before, because you are the positioner. So that's that. Thank you, Mr. M. Mr. M. Are all good? Yeah. Thank you. So, yeah. This is pretty timely, unfortunately. So, as you all are probably already familiar with when there is a thoroughly declared disaster, the IRS will generally put something out that says, you know, people impacted by this disaster may take a distribution and from their retirement plans that will be exempt from the 10% premature distribution penalty, still subject to income tax, but although you're able to phase in it, actually. But so it is kind of the burden of that as lessened. So the change here, which is really kind of innovative, I think, is that rather having to basically amend your plan for any disaster, any specific disaster that impacts your population, plans can provide for something in their plan document that says, if our members are impacted by a federally declared disaster, then there is this distribution option. And so you don't necessarily have to wait for the IRS guidance, and you don't have to hurry up and amend right away in response to the immediate disaster. There's also the, you can either take distributions or loans, I should say. So there are some options here. And even distributions can be repaid. I would say from a retirement philosophical approach, we do try to encourage the repayment, because otherwise you've taken away from your future retirement. If you try to take a hardship, eventually hopefully think state-wise again. And of course this is optional. So there's an interesting provision on public safety officers that doesn't actually directly impact the plan that we thought you might find it interesting. So pretty secure 2.0. There was an exemption from the 10% early distribution penalty from a governmental plan by a public safety officer who has already reached age 50. And so Secure 2.0 has expanded this exemption to include public safety officers with 25 years of experience and corrections officers and certain forensic security officers. Now, the reason that I say that it doesn't really impact your plan is that this is an income tax role that is about how the public safety officer would report this distribution. But it obviously does affect you guys indirectly because you have from the public safety officer or members. That's interesting, we're finished. Another optional sort of related to the emergency withdrawal, there's a new special distribution, it would be a qualified distribution event relating to domestic abuse. And this would be exempt from the 10% premature distribution penalty. And it is, you would have to adopt it for, if you wanted the qualifying distribution event. However, even if the plan does not have the qualified distribution event in their plan, an individual who can otherwise take a distribution for whatever reason can treat their withdrawal related to domestic abuse for tax purposes as if it was under this rule. So again, optional for the plan, but in some ways more directly affects the participants. And then this is subject to self-certification. This is not your number of prior to provide proof of the domestic use. There is, there's a request for comments out on this. And specifically again, really, you see that self-certification. Should there be exceptions to this self-certification option? And you are allowed to repay these withdrawals. How should repayment work? I am impressed that you let me get all the way through security.0 and then fall asleep. I think we're just about to talk about that. Yeah. Yeah. We do really well. Did you like me? You could buy me a shelter. Well, I kept kind of an eye. So, and I know I was getting her both. I have one question. Yes. So many new provisions, these exceptions, from that accelerated withdrawal, are governed by self-perventation. Could the plan of some chooses create a higher bar in your bar of status, status, and so on? Interesting question. So under present guidance for the sidecar account, the small emergency withdrawal and the withdrawal related to domestic abuse, I would be inclined to say you should not, that you should stick with kind of what the law says. Now with that said, there's this request for comments out there and I think a lot of people are concerned about the self-certification. And so I wouldn't be surprised at all if the IRS did be provide for the possibility of your plans to set a higher bar. Right. Are you seeing interest in these optional provisions? I haven't seen much data at all. I didn't think that that's at least in part because the challenges with referred papers, I think no one wants to stick my net on first. And no one wants to be the innovator on these. And I think people are waiting for additional guidance. That's administrative hurdles are probably a very state consideration, especially the planning and sets the plan. And we're talking about, I mean, plans that cover, especially, hundreds of thousands of employees. That could be a huge investment in putting that in. So I can see why there would definitely be a lot of discussion before trying to do this. Particularly in the context of self-sertification, you know, if you have 100,000 members and all the sudden you have 50,000 requests for small or dizzy withdrawals like that is going to be a problem. I don't see any questions, digital hands. I've been checking to make sure we didn't forget my fan. So I'm here. Of course, we started a while ago on the core fiduciary stuff, but I also want to make sure if there was any questions or follow up on that core. Basically, 101 y'all had a chance to ask. Well, we think of any. On the last slide is all of our contact information. I will say if you have questions about Chevron, contact one. I've had the advantage of taking a purgrain for 15 years. So I'm particularly confused. So, with that, Chevron, if there are regulations on something, is that those also like, out the window? So they're not out the window. They are subject to challenge is the kind of problem. Everything subjects down show. That's right, that's true. So in one of the very specific in the long, then if you follow the regulations, those can all be challenged intentionally. Now I think they're, again, because of the current political climate, I think there is again, because of the current political climate, I think there is quite a bit of speculation. I mean, there is quite a bit of speculation that these decisions will end up being kind of on political lines, and that more politically charged regulations are likely as to be challenged. But this is definitely not always the case. So as an example, that DOL fiduciary rule about advice to a participant to roll over to an IRA, I don't think that's political at all. And yet, that's potentially going to be touched by this. I think anything that could generate a little cynical to it, anything that could generate a little cynical fit. Anything that could generate large settlements, large amounts of money for various parties could just seem like they are right for these kind of challenges. Yeah, yeah, I mean, it's a scary thing today. For sure. It's complicated. It's uncertain. It's uncomplicated. I don't know if we can predict the future. Fetal judges are very busy people. It may be that a federal judge gets some case challenge in challenging an arcane rule that relates to chemistry. And the agency has reached decision X. The federal judge has to decide. I want to set aside all my other busy work load and spend several weeks learning the biochemistry so I can decide whether or not to second guess the decision that the agency has made. I don't I'm not I'm not sure but I'm at the end of the day I'm not sure that Chevron is going to be as big a decision as a lot of lawyers think It will be that's just my opinion. It's a very practical Other questions or comments? Thank you. It's very helpful and very thorough and appreciated the ability to have a dialogue. Absolutely. It was a pleasure talking to you. Anything else that we need to discuss before we get an emotion to adjourn? Great,hal. We're about to minute. We approved. We approved the minutes. Sorry. I'm sorry. Right at the end. I move that at three, 53 on November 7, we adjourn. So, she'll. October. Yeah. All right. I'll call the vote. Gary. Connie. Yeah, Marshall. Yes. Ma Van. Yes. That. Yes. Nate. Yes. Connie, yeah, Marshall, yeah, Ma'am, yes, Nate, yes, and her, is that so. All right, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you, thank you for making the meeting earlier, it was very helpful for me. Glad you're able to be a house of the way in Paris today. What's that? I'm just under the weather in Paris today. Rainy.