Sounds like we're everybody's here. We've got people teamed in from San Francisco I'll let the introduction happen in our agenda, so Friends from calendar here you guys take it away. Thank you very much. Thank you for your time this morning Jim and I you know well John Perrone most of you know well, he's he's from Washington grew up here So he's a native son. He's a member of our capital markets group, so this is a group at Kellen that's largely in San Francisco and they're responsible for our Capital markets doing our asset liability studies also Responsible for the projections that we do each year for asset classes, so he joined Kellen 2016 I believe and he's a senior vice president and did his Graduate work in London School of Economics, I believe WashU undergrad and also prior to coming to Kellen he worked at Barclays and Blackrock so The most important and So John participated the last time we did this Asset liability study back in 2021 I believe it was the year so that we that we wrapped it up, so Just to kind of lay out the schedule if you want to go to Page one of the deck that you have This kind of lays out the two-phase approach that we're doing with respect to the asset liability study so Today, it's it's phase one asset mix alternatives our goal today is to give an overview of the asset liability Process for those that didn't participate last time nothing has changed We're going to go through what the elements of that study are and then talk about We've got some preliminary mixes or as John calls them straw man mixes just to kind of give you a flavor on some of the output with respect to Projected returns and in volatility or risk Also, we're going to go through the development of our capital market assumptions. How is that done and then? Our hope is to have another meeting where this meeting We're trying to take a look at some other asset classes that are not within your menu right now look at if we were to look at alternatives just including what you have now and then We doubt some asset classes that you may not be familiar with are not interested or want to be included in the final list of Alternative mixes that we come back with in the second meeting. Okay. Our goal is to have a recommendation And an analysis done for the August meeting so our second meeting will be to kind of finalize the asset mix and select and then we have an add-on which is Some Some approaches to do the asset liability is also to go down into the underlying structure, we're going to typically we segregate the two two tasks, but given some of the We think it's an opportunity to do the non us structure. We've had some you know performance issues certainly We've had Bailey given came in recently so we want to take a look at that Non us structure our hope is to do that touch on that in our second meeting So the phase two meeting of this we then Complete that and then then turn to the non us structure And then we may have some thoughts on whether we're going to stay the course make changes And so that we're all in a position for a recommendation at the August meeting Any questions at the outset or things of interest that we want to be sure to address as we're going through it There's a lot of information. We're not we're not here to Give you a treatise on some of the alternative asset classes if we need to go there. We certainly can Address it here today at a high level if we need to go down in more detail We can bring in one of our experts okay, so with that I Think I covered The approach that we're thinking again the goal is to determine a set of allocation mixes I'm on page 2 the current allocation has a projected 10-year return of about seven point one two percent your actuarial Return target is seven percent so again is anything broken from a structural standpoint no The current mix that you have will is projected to deliver Return in excess of your actuarial target, okay? We're going to explore two asset allocation changes one is What would happen if you de-risk to a certain point so adding more? Fixed income that risk reduction and still maintain that seven percent target so again. We're talking about You know Refining I guess the the current accent asset mix and And and loading up a little bit on the more on the fixed income and then we were going to take a look at some asset classes that that we could introduce and What the impact would have be on an overall asset liability structure so at the outset? We've identified three private credit private equity infrastructure Let me open it up at this point are there Strategies that you may have heard of in terms of conferences that you're interested in You know there's certainly a host Strategies out there, but we identified three of the more popular ones that we think we see in institutional defined benefit portfolio So we wanted to include that and just give you a thumbnail and ask you if that would be of interest I would say whatever we choose here You know there is no one perfect mix for all clients So when we come up with our asset liability study certainly we want to achieve a projection for that actuarial return But we also want to be cognizant of the staffing needs staffing requirements the resources So we work with some clients that have a full staff of 20 people working on this right so again that constrains your list of alters in terms of what you can do or want to do and so I open that as the outset so With that any asset classes that you've heard about interested in saw on TV anything like that Okay, all right, so let's move on John. I'm going to turn it over to you That sounds good, yeah morning everybody Yeah, let's go ahead and jump to page four Investigate looking at their properties and conjunction with the liability right so today We're really focused on the asset side of things then when when I visit you all in In August we're going to take those assets, and then you've got all the liability work. It's done by staff Matt We're going to marry them together in the model They ultimately should show a set of different projections in terms of what your funded ratio might look like with those different different assets So that's that's that's where we're going today. We're drilling down on the asset side It obviously makes sense to start with what do you all have right now right? That's what we're looking at on page four And so Let's just take a quick moment to kind of review the role of each of the asset classes in the portfolio right into the day You kind of have offense and defense if you will right you've got your assets They're trying to seek growth right if you think about what your ultimate bogey You're trying to hit that 7% actuarial target Here on your basis, and so kind of the growth side of things obviously you've got Equities right couple US equity and international equity right over time We expect that as a class to give you very strong growth Right what's the trade-off right on a year-to-year basis or even month-to-month basis as we've seen you know compare in March April Right for equities May right that there's a lot of volatility there, right so equities growth Also, I'd say in terms of growth you could think about You see the red there your real estate right again trying to deliver Material return to the portfolio over time and again. Why is real estate important because it's delivering returns in a different way Then in the equities right there's going to be a diversification benefit for incorporating real estate there And indeed downstream when we look at potential asset mixes we may potentially investigate Including other alternative assets Try to provide growth, but in a diversified fashion They've got the real assets a sliver there to provide some degree of inflation to pretension protection And then you get the green the green guys are the fixed income That that gives kind of defense is a defensive role portfolio in particular That core fixed income piece the core fixed income That represents the investment grade fixed income you know credit credit worthy securities in conjunction with with treasuries mortgages so Whereas a high yield has a little it's kind of a tweener if you will it has kind of both the defensive role in it And and tries to seek returns right, but I guess from 30,000 feet if I look at your portfolio right now I guess I would suggest that You know there's a lot of growth in there, but not not much defense right see again that core fixed income Which represents the defense in the portfolio is about 16% You know and so what? You know we did this ass a lab we did this ass a lab to study back with three guys about four years ago And if there's kind of good news in the capital markets in terms of what John what's different now versus when we did Study last time it's that The return to get the core fixed income again that kind of key diversification Far far higher than what we were looking at four years ago that four years ago You know this core fixed income again You think of it as kind of being proxied by the Bloomberg aggregate these investment grade bonds that are forecast We're kind of south 2% for that right now Whereas obviously interest rates and materially increase over the past four years if you look today and core fixed income we anticipate Expected return just south 5% for that asset class right so Which is essentially consistent with what the yield on that Bloomberg aggregate index is right now So we're looking at a situation where hey, you know just a gate, right? Using conservative fixed income we're already at five And we're trying to get up to seven if you will so what you can see in these mix is And again is John Jackson said there's nothing broken. There's nothing wrong with what you all have now It's just that you may have a latitude now to have a bit more conservative portfolio and still reach a 7% So that's kind of Let me pause there to see if there's any questions. I know I threw a lot of eggs in short order. Yeah, I'm gonna be jumping the cart here. Okay, John one one second Perone one second. We got a question Hey, yeah, yeah, so with that and maybe you're getting ready to hit on this But what percentage of that fixed income should we be looking at I mean we're already ahead. I get the position Trying to keep it conservative from a fixed income standpoint But what percentage could should or could we adjust to and still hope to hit over our mark at 7% return? Okay I'll show you some actual calculations We did a couple slides into kind of the short answer questions. We think that you could potentially add 5% more to fixed income fund that from your public equities And then you would have a more diversified portfolio more defensive portfolio and still by Cowan's estimation You know Have expected return of 7% or more so so that's yeah So is it we're not talking about it kind of a huge let's put the brakes on Huge change the portfolio on the margin we think that about 5% more and again. That's the poor We're saying we should investigate increasing that sure the 7% wasn't a goal We weren't we weren't excited about going down to the seven the seven we went to because that was the reality of what we thought We were going to Return we were at eight and then we went to seven and a half and then we went from seven half Seven and so I don't think we were necessarily trying to adopt a more conservative posture we just thought that was the direction that we were headed and we were Accepting that that was what we were Going to see and we were trying to Recognize that by adopting that 7% That would create a counterbalance in contributions from the city if the The Market returns weren't there. I don't think we were necessarily shooting for being more conservative We would like to have I think a higher return from the market We would like to have a goal of a higher return from the market I don't know that we're necessarily trying to adopt a more conservative approach Unless I'm mistaken What we would what we're doing is Or at least I was doing in my mind was saying yeah realistically Seven is probably what we're going to get So I don't think we should be unrealistic and say we're going to get seven and a half and then come up short I think we should adopt seven if that's what the markets going to return But I don't know that we should necessarily gear ourselves to be seven if we're going to be higher if we're going to return higher if that's if I'm understanding that correctly I don't necessarily want to throttle down throttle. You know yeah, yeah pull back Appropriate to Fix income on the margin okay, so what you see on the page, right? What is what is the town's current projection for your asset allocation based on forecasting market assumptions? You can see that we're forecasting Essentially something on the order of seven point one percent Okay It's current portfolio. I would argue. It's already it's already pretty aggressive, right? Okay, there's about 16% defensive asset, and you'll see in a second Let's let's look to the next slide real fast, which is our our capital market assumptions for the next ten years for the asset classes And And we've got it We've got some cloud in the back to kind of dig into the extent y'all want to do kind of a deep dive Some of these asset classes, but the top order I guess I would I would suggest At the end of the day kind of focusing on what's what's the difference between the return on for fixed income and again? You can see these are expected return a little bit less than five percent So excuse me four and three-quarters percent for investment grade fixed income And again, you can think of as being very consistent with what the current yield of maturity on an index is out market So to roughly 5% for fixed income and then when we look at You know there's a lot of asset classes, but you kind of simplify and distill things down You know it's like okay, we've got fixed income got equities how much do we want to teach okay? It's important to look at well how much extra return to expect we're getting for equities versus fixed income that's gonna That's gonna Be part of kind of our thinking in terms of how much do we want to have relative to each other okay, so again fixed income Or far higher expected return, then we did the asset liability study back two years ago And then we look at equities right be it US equity or international equity obviously US equity in particular you know Valuations you know very high relative to historical averages for US fixed income or US equity excuse me You think about? International equity again, we've got some collateral in the back valuations much more aligned with kind of historic bar, which is So you can see that our expected returns for equity over the next 10 years You know relatively modest right relative to history you can see a you know kind of low 7% expected returns both from US equity and international equity And so if you and you can see the expected returns for the other asset classes in your portfolio shaded in Blue there, okay And let me just just briefly point your attention to under alternatives that Again, when we were creating these books from and portfolios. We we investigate. What's the potential impact of adding? Private equity private credit private infrastructure, so you can see the expected returns for those asset classes there, too You know it's a private equity You know a higher expected return than public equity, but higher risk as well Public it private clear you're tying your money up for extended period of time right so there's liquidity issues around private equity But in terms of you asked out. What do you what do we think the guy is expected to turn asset classes over time? private equity Private credit You can see private credit actually has pretty comparable Expected returns to the equity to the equity complex right there both from the low sevens right a part of that Is driven by the fact that interest rates again are much higher than they were you did this exercise? You know years ago, and then you see private infrastructure as well You know but again if you look at these right there's no kind of magic asset class In the sense that you can see that you expect a return and risk or length right those Asset classes that higher expect to return have higher higher risks as well So we're really trying to do it in a day is trying to create a diversified Portfolio where you know for growth for example we have multiple engines Not just public equities are providing growth, and we've talked to some length about the defensive nature of poor fixed income as well So kind of putting these together we go to the next slide page six And this this is this is very closely linked to this discussion about seven percent You know just what we were talking about a second ago In terms of why we think it may make sense to have more fixed income which you see here on the slide we're looking as accounts been forecasting Expected returns for asset class going back to obviously kind of the last century if you will so what you see in this chart Is what does count each year what accounts for it has been for the premium for equity versus bonds? How much additional return do we expect for take? for migrating from equity to bonds and which you can see is that the spread the difference between our expected return for Equities you see here. We're using at the S&P 500 in this chart So we get now low sevens for equities in terms of expected return based off our current forecast Bonds shape below 5% we take that difference that spread. We're only looking at about a two and a half percent spread for equity versus fixed income And I've kind of Underscored it the bullet there at the bottom of the slide means fixed income is a far more attractive asset class than we did this Exercise last time because now you're getting quote meaningful return and at the end of the day again what asset class provides the most diversification It's going to be fixed income at the end of the day Both in terms of behaving differently than your other asset classes that can also dilute the risk of the portfolio Okay, so so you let me pause there because again, that's kind of a key Full software point in terms of why we think it may make sense to incrementally tweak the fixed income of the portfolio Okay So now page seven this addresses a Jones Jones question about What is counting in terms of what could potentially be transitioned from equity to fixed income and still get seven percent? So that's what this table on page seven. So just to orient you Right. We've got the current allocation shaded toward the right side of the chart and Then The key thing that's in motion here is the allocation to poor poor fixed income get that kind of poor defensive asset And so thinking you think about kind of risk in return to the portfolio think of that allocation to poor fixed income is kind of dial Where you if you increase the allocation for fixed income, right? Then we're moving on the chart from the target right to the left some more fixed income More conservative lower risk you see that Depicted in terms of standard deviation the portfolio the variability of its outcomes, but also the expected return decreases as well but again, what's different now versus previously is that it goes back to this idea of the spread that I showed you in the previous slide that That if you if you go into equity instead of fixed income count things you're only get additional two and a half percent here on Average, but you're also getting a lot more risk injected in the portfolio So that that's why you know take Five percent out of equity for example move it into core fixed income. That's what that plus five percent core fixed income is that second Column from the left in terms of the numbers you can see counts to a forecasting expected return is seven But you see the standard deviation decreases as well. So We're thinking about diversification Important metric to think about in terms of Diversification is it's called the Sharpe ratio Again, I won't go too much into the weeds But basically what it's saying is how much return do you expect to get per unit of risk? So you think I was being kind of the kind of dividing those those two numbers there that And you can see that As you get more conservative as you add more fixed income into the portfolio you see how that Sharpe ratio Increases right and that's just saying hey the portfolio is more diverse so It's a just for completeness We show a mix to where we're actually taking five percent out of core fixed income and putting that into public equities Right and again given the current market fire in counts return expectations Suggests that's probably the not the right direction to go in terms of increasing the risk of the portfolio because again We're talking about increasing Our equity exposure in a period where you know equities are highly valued Vis-a-vis kind of historical averages that are expected return forecast for equities are relatively low relative to history so you can see that The continuum there as well. And again, we're not all these mixes. We're not talking about Making huge changes here, right because I mean at the end of the day We're trying to make incremental tweaks to to improve the the portfolios outcomes so Just a complete Discussing the table here. So the primary thing that's changing here is the allocation for fixed income or I'd call that the dial that's a one thing we also want to investigate was Kind of relative allocation to domestic equity versus international equity Okay, so we also show a mix This is immediately to the left of the target where we're increasing the fixed income Here we're increasing fixed income by 4% But instead of funding it from a combination of US equity international equity We're funding it from just from International equity and you can see in terms of battle risk and return characteristics, you know Very very similar at the end of the day Yeah, we incorporate this Understands there is some desire to potentially investigate things that has a little bit less international exposure You know, you can see, you know pretty similar at the end of the day in terms of the expectations So let me pause there because again, I've thrown a lot to add to it in short order And Maybe let me push on that thread that is there a potentially desire to To reduce the amount of international equity in the portfolio that the way it's set right now That target you see you've gotten 40% us 43% international that were fed that reflects the weights of the global equity market the global equity market Is roughly 64% the US and that remainder of the 36% is international So that's how that's how we've historically calibrated the allocations to you guys. But again, you know to the extent points for Adjusting that I'm certainly happy to do that. So let me pause it Okay And I know it kind of dug into that piece a little bit big in 30,000 feet What is the key dynamic that we're exploring here in this table? It's really changing that And so To try to put a little bit beat on expected return and risk, you know, these are pretty can be pretty abstract Concepts what we've done on the next two slides to show a series of asset return projections one year horizon and The ten-year horizon the ten-year horizon and that's how we're going to model the asset liability study Because you think about it Say what is the time horizon your pension fund? I mean essentially it's perpetual, right? Intent is for this plan to carry on in perpetuity. So we're in terms of being a long horizon framework Of course the problem of long horizon framework is you have to live through the short term to get to the long term, right? So that's why it's important. It's also Focused on both ten-year horizons and look at what could happen over a given year. And that's what we see on page eight What could happen over over a single single year horizon? Okay, and so what you see here And just to arrange you guys we started if you focus on the target, right, that's the Second one from the right there. You can see not surprisingly the target I remember that the expected return slightly higher than the 7% actuarial target So it has a you know a little bit. Well here it's rounding. It's a 50% chance of hitting that 7% target over time And And yeah get 30,000 feet your portfolio has a lot of equity, right? No equity on a year-to-year basis can be extremely evolving, right? That's it's not a good or bad thing. It's just When you're targeting higher expected return, you know, you have to take risk, right? So what you see here is any given year You see I put a column in of what's the chance our portfolio has a positive return, you know? Then you can see that for the target. We're talking Two-thirds three-fourths of the time. Yeah, we expect this thing to have a positive return But again because risk happens there's going to be those in what years, you know, say like 2022 for example for the portfolio Doesn't just Under performance actual target. It's got a negative return, right? But again, and you can see as you add fixed income to the portfolio right, you can see that That downside chance gets smaller, right? See how see how the doubt set the bars in terms of what happens on the downside starts to shrink, right? That's for example a target At a 95th percentile. So that's like a bad a bad market outcome and outcome We expect kind of one year out of 20. See how the target is negative 12 12 percent change whereas a portfolio that has 10 percent more fixed income You know, it's that downside is Okay, so Again, just trying to think about visualizing these things, right? If you get have a something that adds 5% to fixed income or something that's 4% fixed income But it's funded from internationally. See how both those still kind of give you a 50% chance of hitting that return 7% return target, but you can make sense because expect to return to both those portfolios is essentially 7% So it's looking at a one-year horizon, so You know by a chance of negative return or you know, 25-30 percent chance of negative return over a given year that Percentage being lowered but to the extent that you add fixed income to the portfolio and then if we transition to page 9 This is looking at over a 30-year horizon Or excuse me, a 10-year horizon, excuse me And in terms of expectation in terms of median, right very similar situation Right where you see the target 7.1 median This size important service mix is still at 7% and go to 10% fixed income. You're actually a bit of a south 7% return bogey, but the intuition here is that The years that have negative returns and years that are strongly positive It's kind of a one-year horizon to a decade long horizon those things started to cancel each other out to some extent So now you can see all these mixes See that 95th percentile is we're saying that only 5% of the time would you expect your portfolio to have a Return to 1% a year over the next decade or worse, right? So you can see that things, you know as you migrate to a longer as Frank work that's of that year to year volatility gets gets medicated there, but And I guess the other thing to observe here is that to my point of these changes in the day are not Changes that we're looking at turn to these straw men. You can see how we're talking about Incrementally Trump paid the downside potentially with the more conservative mix But still trying to hit a 7% expected return Let me let me pause there. It's a it's again One of the main things we want to explore was the impact of change Hey Perone, we've got another question coming in. Okay. Hey, listen. Yeah Trey here and this is one person's view or questions right now, so not definitely don't have the pulse of the room, but As I've noticed it seems first of all that it makes a lot of sense to do to pull the 4% from the non u.s. Equities put them over to the you know, I had the 4% Just off the cuff that seems like the most logical Ideology here, but the one next to it keeps referring to adding 5% Where would that 5% come from? I mean pulling that from a different asset class or we just need to come up. Yeah Yes To your point in the day in terms of what their actual impact is very similar that for that plus 5% or fixed income what's happening is that instead of taking it all from the International equity. We're again. We're adding 5% fixed income that 5% is going to come from equity But it becomes and more balanced sense that we're taking 3% away from the u.s. 2% away from international That's how it's funded. So if you turn to page 7 40 here Like trying to drink from a fire hose here, right? He's probably never done that Yeah, let me Let me just do a time check we're at 940 and I guess it would be 1040, right? And what would be you know, how much time are we looking to spend this morning? I don't want to divert from where Okay I guess I got all day What I didn't schedule anything else today. I said these people always run over two hours. Don't schedule I Said oh, this could be ugly. Could we do 20 minutes for the for the different options the different other action? We have you gentlemen here, which is Sure Okay, so let's let's work towards the 20-minute goal And do this We've got three asset classes that we're looking at One is private credit The other is private equity and then infrastructure private credit, okay, so when this is a Popular approach that really emerged out of the GFC right as there was regulations put into place Because of the global financial crisis that they wanted Banks to get out of the business of some of these customized loans so they they constrained so we have a industry that emerges or grows significantly and What I think of private credit I think of High yield from the standpoint that they're fixed income instruments They are high yields publicly traded Private credit is not So these are more customized instruments that are executed What is the benefit? Why do it you get a greater yield? You also however have less transparency, and it's not publicly traded so John talked about that Liquidity premium that we kind of roll into the risk of that. That's what you That's what you're taking on when you're talking about private credit, okay, so The With this customization you also have the ability to Install protections to a greater extent than you might be towards the more commercialized high yield so again the default Ratios are a little bit higher for high yield than they are for Private credit so when John gave you the proposed Are the projections for asset classes you can see you you can see that high yield and private credit private credit offers a little higher rate of return But also contain some level of risk so you get almost equity like returns with a correlation benefit of lower risk than equities So from that standpoint you know we have the map on page 12 the cattle that talks about the you know the Evolution if you will but again, I would say that we have done a lot of searches in this particular area because it is It's attractive right it's a diversifier It benefits the portfolio and as John talked about that sharp ratio. Which is your risk return ratio I? Define that as get what is the ratio it tells you what how much bang for your buck and the higher the ratio the more attractive that is as an investment and When you look at the mixes that we had laid out the one where you add Private credit you have a very attractive Sharp ratio that's associated with that so let's talk about the Complexity so it's less liquid than then high yield or or core fixed income it also is Depending on the vehicle that's chosen and we would assume that you would be not choosing what we would call closed end Which requires more administrative burden etc. Just acknowledging. We would want to do something similar to a vehicle structure that You might see in real estate and core fixed income that would be the ideal Vehicle for this particular strategy so again Happy on page 14 you You can see a comparison of high yield bonds and private loans, and we see that again for private loans Illiquid but not as illiquid as private equity right so here you're talking about three to five years Whereas private equity you're looking at ten, okay, so it's on the liquidity spectrum It's not publicly traded, but again. It's not private equity. It's it's it's closer to publicly traded securities, okay? Covenant protection is those are the protections that I talked about where it's customized you You tend to get those to a greater extent than you would get in publicly traded securities There is some level of underlying Credit risk because you're engaging in a transaction or loan to a counterparty, but that I yield you also That's that that's similar Counterparty risk so that's That's private equity in a nutshell if you you know are want to Have a richer understanding we can provide you know a deck with that information But we were just trying to capture the highlights and say hey look John We're good Have a little interest in modifying, or you know what this seems kind of interesting. Maybe we take a look at one of the mixes that Contains an increase or an addition of private credit, and when you come back Maybe show us some modeling or more detail about private credit, so I'll stop talking there as I've used about six minutes And Get your thoughts So you would be substituting one of those in lieu of Converting more to fix asset yes, so let's yeah, let's turn to 28 the straw man portfolio, and we can talk about the funding sources for These alternative asset classes I'm Kind of taking John Perrone slide here, but you can see on 28 kind of just right of the target Allocation which you're currently at If you were to incorporate 5% from private credit the funding mechanism would be from US equity and global Ex-use equity so we talked about the risk return profile being pretty similar to equity But there are some diversification benefits that you could see With a lower risk which we're measuring a standard deviation, which is circled in that blue bar And a little bit higher ratio which can be a little technical but we led with private credit because we think this is the most diversifying asset class of the three that we brought forward it's based off of the model and based off of the projections but happy to kind of go into the other asset classes or you know maybe we could pause there see if there's any questions on private credit first and the the infrastructure and private private equity introductions that would be a little bit different funding mechanism so in infrastructure's case you have a allocation to real assets so that's through the PIMCO diversified real assets fund so that's again public publicly traded securities so those typically commodities REITs that would be fun the infrastructure allocation would be funded from real assets so that would be a substitution for PIMCO diversified real assets and then in the private equity funding sources we would we would keep the real assets in place PIMCO at 5% and the funding sources would come from the US equity and global UX US equity similar to what we did with private credit John did I have that right prone you go back to the initial question right there's a funding source for private credit would be it would be a public equity again going back to what we're talking about that incremental return we expect we'll receive for equity versus fixed income is relatively narrow so why don't we consider diversifying the portfolio by taking a little bit out of public equity but yet putting into something that we view as a comparable return potential and more diversification that's that's kind of the logic there and again what's the hair on it that John Jackson said right you are you are increasing the equity of the portfolio on the margin that what I would say and I actually you see that percentage of illiquid assets in the portfolio right currently you know you're all the apprised real estate that's that's essentially a liquid in the portfolio but then were to add another 5% of any of these asset classes getting 14% which in our experience this tends to be quite manageable from a liquid liquidity perspective that what I would say as as part of the asset modeling correction specifics of your liability and make a couple more formal recommendation about what level is appropriate I can just say from my experience that we're working with your plan that during the past two AL studies I'd be surprised if kind of moving from a 9% to 14% the liquidity profile is kind of binding if you will or hasn't kind of did deal to his combat consequences so actually one one last thing on the private credit that again we just didn't want to overwhelm you with permutations there that that potential funding so like what we show here on page that you're just looking at page 28 of legal list the funding source here you can see was kind of balanced in terms of target private credit here is a strong and we showed it coming from kind of 3% US equity 2% international but alternatively the funding source could be international equity as well into what we showed upstream so don't yeah yeah so there's there's a lot of kind of market it's really more is there kind of interest in private better getting additional education so overall the I mean the recommendation are calling it that essentially to kind of follow along with that at 4% for the core fixed income pulling from international equity and then still somehow or another adding the 5% private credit you know those two changes sliding together hand-in-hand is that the way it seems the way you guys are selling it here separate questions I guess I would say first off having a home country bias you know the for the international u.s. equity mix I guess I would see that as a threshold question set to be handled separately do you want to have a home country bias which means the global index is going to have a balance between u.s. and non u.s. to what you have currently and then do you want to overweight u.s. versus non u.s. by 4% that's that's a question and then if that's a yes then we turn to what asset classes do you want to do you want to add and do you want to add private credit in which case the primary funding vehicle is going to be u.s. equity from the equity side or non u.s. equity from the equity side so I would categorize it I'm kind of anticipating round two where you tell us Bailey Gifford is still sucking mud and we should pull everything out of there well okay so so Bailey Gifford whether it's Bailey Gifford or whether it's another international manager is not going to change the the answer in terms of the the overall allocation right that's more of a manager issue so got it yeah if it's not Bailey Gifford some other manager but the question is like one level up from that yeah how much do you want u.s. versus non u.s. do you think that with all the changes in the presidential administration at all the volatility that brought he certainly seems to have a home country bias certainly seems like yeah would it be wise to overweight or increase our own home country bias expecting changes in that regard or no I think these are long-term strategic decisions and pinning an allocation decision on the the inclination of an individual would be perilous yeah and by the way do you don't know what it's gonna look like tomorrow so you know the the argument favor of staying with the neutral to the global index is that hey nine u.s. equities had a lag for a long time which means that they're relatively cheaper whereas u.s. equities are more richly valued right and if you're if your view is that over the long term cheaper is going to outperform more expensive right so that would argue that hey the global index is kind of like the baseline the counter-argument is hey look we're we're here in the u.s. it's not uncommon for foreign company foreign countries to have some level of home country bias you traffic in that over the last 25 years the u.s. has outperformed nine u.s. by significant margin that's that's historic what's going to happen for the next 10 years is not clear right but over the last 10 years last 25 years u.s. has outperformed but it's been a over the very long term we would we would expect and even our projections for the next 10 years kind of show more of a parity between u.s. and nine u.s. jump wrong would you add anything to that yeah I think that's good yeah kind of under that I know we didn't kind of go under the hood in terms of what's inside our u.s. national equity assumptions but there is there's some modest kind of ding to the u.s. our u.s. expectors interception again to reflect the fact that you know valuations are high right now for the u.s. right it's up you can see that for example on page 34 there's a right there's no one right valuation method but you see a page 34 is a host of different metrics but what you can see is that you know I get relative kind of long-term history this is not like we're shattering your kids to y'all but yeah the u.s. market is so much expensive right given the fact that's the expense of going forward you know we've kind of tamped down our expected return forecast for the u.s. to reflect that so actually what maybe click back to 33 30 yeah 32 and 33 I think go ahead John let's just do it let's start 32 so see on page 32 yeah I mentioned that the global equity index is composed of this is at the end of the March composed of say 64% u.s. the balance international and the way your current policy is set up remember you have current policy is 40% at the top top order it's 40% u.s. 23% international right so yeah what percent of that of the top that 63% equity is u.s. you just do the division right you can see that right now you're kind of calibrated such that you're on that global world market cap right but and that but part of that has been driven the fact that you're at this market cap has been driven by the fact that the u.s. obviously has an increase in percentage of the portfolio so if we go to 33 this looks all we're looking at here is what percent global equity markets u.s. right you can see roll the clock back a couple decades is kind of 50-50 in terms of u.s. versus international and not surprisingly you've seen a steady increase in the portion of global index that's in the u.s. why is that because the u.s. has had a run right so that piece of the pie just keeps big getting bigger and bigger and which means that in a proportionate sense it's going to increase right and so we're going this is you know we did the last asset liability state back in 2021 and it looks like the u.s. was about 60% of the portfolio right if you think about what was your strategic gas allocation policy then again the same policy is what today is what was three years ago like you guys were you guys were 64 percent three years ago right whereas the u.s. was 60 right so you had about 4% homebuyers back then right and then the market has kind of pulled you from having a modest homebuyers to being kind of a neutrality versus the market so what I'm saying is that if you were to explore something like say taking 4% out of the international equity you're kind of getting back to where you were four years ago before the markets change right so you've got a homebuyers historically it got eroded because the markets have moved but again if you're comfortable the homebuyers that kind of this incremental change of say taking 4% have international equity to kind of get you back to you know again an incremental bias relative to the market let me pause there make sure that it makes sense so threshold issue can we do a quick survey and like yes we want to maintain or go to the home country buys that pre-existed or market weight Erin. Uncomfortable moderately adjusting US and global together I think that is probably that would probably be my preference I appreciate the focus on private credit that would also probably be my preference as it balances the reduction of risk without sacrificing the expected rate of return and looking at the three options presented to us the private equity has you know significantly higher risk for their return and the private infrastructure while I like the idea of investing in infrastructure a lot has quite a bit lower expected return for the same amount of risk so that would probably be my preference as well. So if I get that right home country bias yes and private credit yes yeah I mean I would feel comfortable with the if we're going to move towards the private credit then probably the the scenario that you all have provided us where we're dropping the US equity and the global equity a couple each would be oh okay lockstep so that would be yeah so what three and two or two okay so that's maintaining the I also I don't have a strong preference either way okay Are we on page 30 which Ben agrees? I'm on 28. On 30 talks exactly like what it sounds like you're talking about. I'm on 28. Go to 30. Okay sorry. So all third parties do is just kind of marry all of those sections we were talking about, moving the increasing cutoff and looking at the alternatives, again I won't restate, I mean yeah we think private credit is the most impactful, most diversifying, does lower the expected return right so we kind of proposed that as the one to kind of dig a little deeper and it was already, I don't want to restate things, but you can see the way we follow it right now. Okay. It's taken, fortunately, from US international equity but that's, we can be flexible on that for sure. There's desire to see what if it comes from international equity. I'm just one voice. I'm definitely open to conversation. And I'll jump the line and kind of echo the same thing. Despite living that fortune favors the brave, institutional investing is probably not the chance to take. I think the like and I said this a couple years ago, I mean as you see those interest rates start to go up on everything and what I think from an economic standpoint it seems like the feds are going to kind of keep it there, you know, at least for a while longer and rightfully so. Our fixed income I still feel like it's a solid, you know, a solid investment. I like hearing that. I like hearing the advocation on that from John Perrone's perspective. The private credit, those numbers look way better, you know. I guess just off the cuff you wouldn't think that looking at your expected return you can kind of guess what that is but I feel like there was probably more of a liability to that than I'm reading here. So I mean if your numbers are accurate then I echo what Aaron said. I think that's a great opportunity. Something we've not typically looked at. And I like the way we've got it, the threshold which you've mentioned. Okay, so. I have a quick question. Does our investment policy allow for private credit? No, we would have to have that. We don't. That's what I was thinking. Yeah, we'll become loan sharks, is that what we are? It's a tale as old as time, John. Because we'll have to update our investment policy then to allow to invest in that instrument. What comes of that? I think we have a committee for that. We have a committee for that. I think it's this committee, so yeah. Does that mean I'm going to have to have another meeting? Yes, yes. You know, sometimes you've got to dig in. Tommy, what do you think? Do you like the way we're sounding? You heard home country bias and you were in immediately, I know. He had his American flag out, right? Well, it's done me good, but you know. I think I could be persuaded. We're up for dissension in the ranks. Yeah. Who else sits on the committee? I mean, we have other members here, not just committee members, but you guys. I mean, what are your all's thoughts? I like the private credit. I tend to be a little bit more aggressive, but like you said, this may not be the place to be more aggressive. At the end of the day, we pay you to give us your opinion and it seems like your opinion is pretty clear, so I'm of that opinion too. We're funding the private credit effectively, right? So we're basically taking a risky asset class, transitioning to something that, yeah, I'm sure it's got some risk on it, but it should diversify the portfolio over time to provide a healthy return. Do you all have a preference or a recommendation between overweight to home country advantage versus? Oh, on the home country bias? I would say we're agnostic because we have differing opinions throughout the firm, depending on who you pick. I mean, there's nothing that we put in front of you that we would be uncomfortable selecting, so we're kind of vetting the choices and saying, hey, you know, reasonable minds can differ, right? Some people can say, hey, look, it's a fact that the valuation U.S. equities are pricey and European and non-U.S. are cheaper. U.S. stocks have outperformed significantly over the last 10-25 years, but that hasn't always been the case, and now it's a question of, like, okay. The base case is to stay with the global index mix, and it's not uncommon for plan sponsors to take a home country bias, and now it's a question of, like, how much, and 4% is not an amount that is anything that we would be uncomfortable with. In other words, you know, just think, it's not like, hey, we're going to have no U.S., non-U.S., and we're going to put it all in U.S. stocks. That's not the case. So, again, and as you look at our projections, you know, while for the next 10 years we see non-U.S. stocks as being modestly higher than U.S. stocks, it's not materially different, right? So, so we're kind of agnostic. Is that fair, John? Yeah, and I'm glad you pointed out the mixed characteristics on 30, right? I mean, you need, yeah, I mean, I had to put this out in three decimal places to show a difference here, guys. Now, if you're saying let's get the international equity all together, we might go to Matt, but on the margin, it doesn't make much difference at all. So, Tommy, you are with the plus 5% private credit on page 30. You're good with that? Right now, yeah, I wouldn't mind going a little more aggressive, but it's, right now, I'm a little uncomfortable about it. Aggressive from an equity posture standpoint? Possibly. Yeah, okay. We are going to have one more run at this to kind of like do the mixed equity. How long? Three months down the road? We could, John, you're doing the work, but I guess in terms of the phase two subcommittee meeting, it's got to be prior to August, but we can certainly do it in the end of June or July. I mean, just kind of selfishly, ideally, I don't know if it's possible to have a meeting, this meeting a month from today, because I mean, the real heavy lift for me is the actual taking the assets and bearing the liability. That's what takes a lot of time. It's pretty easy for me to tweak these mixes, you know, so I don't know if it's possible to have a meeting this time next month or something and maybe couple that with a little deeper dive on private credit to the extent you guys think about incorporating that, it probably makes sense to you as part of the agenda. I will say we cannot have one on the June board meeting because we have a re-hearing and we don't know how long that re-hearing is going to last, so if it stays, it stays. If it doesn't, it may get rescheduled, but I'm not going to know that for probably another week or two, but the June board meeting does have a re-hearing and it involves attorneys and court reporters, so it could be a lengthy process. Okay. So, if we could pick a day that's either a later on in June maybe or, I mean, because July board meeting might be too far. I mean, it'll be too close to, so, I'm just saying June is up, is a little sketchy right now. Okay. For after the board meeting, so it'd have to be a separate date, in my opinion. It's a board meeting. Yeah, but I think he wants to do it before July, so he wants to. June 11th is the next pension board meeting. Right, which will be a long meeting, so we could do it the following week, if anybody is available, or the following two weeks. The week of the 16th or week of the 23rd in June. Unless anybody's interested in maybe just getting lunch after the June board meeting and then coming back. Yeah. An afternoon appointment. Tanya will be soloing it, because I won't be here. She's on vacation. It's pleasure of the committee. Yeah, and we'll look to you all on dates. I don't know if this is a preference to do it in person, virtual, I don't know what's easier. Obviously, we can set up a Zoom meeting just like this, and it needs to be recorded. And we'll be a little bit more prepared. So, yeah. So, we can do a Zoom meeting, or a team meeting, whatever, but it's a matter of what is y'all's availability. We're talking the 11th. I think we're moving from the 11th. Not the 11th. Okay, tell me a day, then, when she said, what day? I mean, we can do any day, the week of the 16th or the week of the 23rd. So, do you want to pick a duty day or coming off of a duty day? Try it. I only work two days a week. What would those two days be? To be fair, a duty day works, like today, sort of works, the day after. So, like, the 17th would be great, but if we needed to do the 18th, I can make that work. I'm bad for the 18th, but could do the 17th. Perone? June 17th? That works for me. Oh, the 17th, I got an appointment. I got to go fishing. I will not be here on the 17th. Okay. What's your, how about the following week, Terry? What is your duty day? The following week. Yeah, what's your duty day? The following week, I work on Wednesday, that week. So, the 25th. All right. So, what does the 25th look like for everybody? Aaron? Perone's good, I'm good. I'm good. All right. I'm on a fishing trip. All right. So, the 25th, what time, I mean, he's in San Francisco, so I'll be a little, yeah, I will be a little nicer for him. Okay. What's good for him? Perone, what's good for you on the 25th, timing-wise? Yeah, I mean, if we do this time, that's fine. He's a trooper. We probably need an hour, right? I don't think we need two hours for the next discussion. Well, I'm gonna back off that because it's gonna be two topics, right? It's gonna be closure on this and structure. Okay. So, can we say 90 minutes? Well, we'll set aside two hours. And if it's less, it's less. If it's not, we'll cut off the two hours. So, what time? Do you want 10 a.m. again? That's a duty day for you. It is, yeah, I mean, yeah. Any time after is a duty day. 11 a.m. Well, is Erin paying for lunch if we come at 11? You heard her, right? Yeah, she said it, didn't she? But she gets to choose. It could be White Castle. Hey, that, hey, that would be all right. It would not be White Castle. What about 10.30? What about meeting in the middle? And we could spend an hour and a half and be over by lunch. 10.30. All right, 10.30. 10.30, June 25th. 10.30 to noon Eastern. I can set up the meeting again, put it on everyone's calendar. Okay. You might be able to do this right now. Are we going to be doing Zoom? Yeah. Teams, if that's okay? Yeah, we'll do teams. So, we'll, the board committee people will meet in here and it'll be on TV. Okay. And we'll be better prepared. June 25th, 10.30, okay. I'll send you an email. He doesn't do the meeting invites. You'll forward it along, okay? I'll send him a separate email. Okay. Yeah. He's special. You're the best. We want to discuss the second agenda item real quick. Okay. We're not finished. No. This is why I extend these meetings. We're not finished. I've learned my lesson. I ain't gotten that far. Y'all gonna have to share. Okay. Hey, Brown, I think that concludes our material. So, thank you very much for your time this morning. Thank you. Getting up early. Thank you. They all say thank you as well. So, we'll be in touch. Thanks, Brown. Sounds good. We'll tell you what I'll talk next month. So, see y'all then. Take care. Thanks. Guys, are you comfortable with where we came out? Yeah, for sure. That's exactly where I was at. Well, then it has to be the right answer. Sure. Me and Aaron both were marking the same thing and I'm like, we're good. But then I was like, policy. All right. We're still alive with you two, correct? Yes. Okay. Great. All right. Perfect. Rolling on, correct? Yeah. Rolling on. All right. Part two of this whole thing. Do we need to do anything else for you guys? Are you guys good? We're good. Awesome. So, we can get out of here. Oh, you're fine. You're more than fine. To discuss fit for duty form used when filling out disability retirement. Somebody else get me back up to speed. I think I know what we're talking about here, but I'm going to... The main thing that me and Tanya want to make sure is that the board committee are on the same page as what we feel. We've had recently a lot of individuals that have marked that they're able to do or unable to do everything. Oh, yeah. And that almost makes me not want to do, not take it serious whenever they do that. Right. So, we wanted, like, when it comes to us, we're telling them they need to resubmit this. Because if you're unable to do everything... Being a heart and lung machine. If you're able to do everything. Yeah. If you're able to do or unable to do everything. I mean, every box should not be straight down. Right. It was mentioned in a very recent report that we just read about somebody from the doctor was that all of them were checked unable. And even the doctor noted that that didn't seem accurate. It was just in one of our most recent. Right. We also had one that was checked all able to perform the function. Yeah. Yeah. So, we're getting both. Right. If you have a disability, you can't do everything. Yeah. Yep. I totally agree. So, you know, what's in question here? Is that you want to create a new form? No, we're not wanting to create a new form. We just want to have such as, like, the board's blessing or backup that when we get one that we're not going to accept it. And that it has to be, we give it back to them in a sense. Who actually fills it out? The physician fills it out. Are we sure? Because it seems like sometimes the employees fill it out. So, I suggested potentially adding a print line on underneath the doctor's signature as well as their contact information was a suggestion that I had just so that if we have any questions, we know who filled it out because sometimes they just know. Yes. Scribble it. We don't know who it is. Yep. I mean, I will say we have one that came in and he said, oh, I'll just change it here. Give it to me. I'm like, no, that's not going to work. So, I mean, that has happened before. So, we don't really know. So, I mean, in my mind, if it is, if it has been touched then by the employee, then it's been tampered with. And in that case, they're lying. It's right. You know, what they're doing is illegal. Secondly, then if it's not filled out accurately, it was kind of their job to explain that. And maybe it is. And maybe it's ours to. It's very clearly says at the top what is supposed to be said. Thank you guys. Thank you. Safe travels. Thank you. Yeah, I'm you're preaching to the choir with me. Be as strict on this as you can be. Like, yeah, this is ridiculous. And if that kicks that, I mean, and honestly, we don't know once we tell them that it needs to be completed again. I mean, honestly, they could be walking out to their car and changing it. And a week later, submit it to us. We don't know. And I don't. I mean, that's just is it feasible to send it to their doctor like back to the is that logistically feasible? I mean, we've never done it before. Be. I know that. We've had individuals that have had trouble with their own doctor filling it out, and some doctors are not helpful. Is that a nice word to say? Some of their doctors will not fill it out and tell them they're not going to fill it out. So then they have to go to a different doctor. Yeah. And have it filled out. Yeah. Which I also don't love. But yeah, no, but we can't make his doctor do it either. Yeah. Because they see that as giving some sort of medical opinion in the case. Yeah. So we're like, I can't tell you whether you can go back to work or not. What a very short and direct cover page would be helpful, like just kind of explaining what this role is, like what they're doing, that they're not a part of this. They're not going to be part of the determination of their necessarily of their disability or percentage of, but more so whether you've seen them, what they're capable of doing or not doing at that time. Does that make sense? Would that be true? I mean, aren't they at some level a part of the determination? Not in a percentage perspective. I mean, all they're saying is that their belief they've reached maximum medical improvement. Right. And, and, and, and this is what they can't do. So compared to the grand jury versus a petty juror, right? Like you're just determining there's enough evidence to support a case to be heard, not whether somebody's guilty or innocent. Right. Right. But what they put here is still going to matter. I'm just being devil's advocate trying to get for trial, which is kind of the world that I live in all the time. Yeah, right. You know, this is going to be submitted as evidence and they're going to say, well, so-and-so also a medical doctor also said this, this, and this. I think we need to take the date off for sure because that, that just messes people up because they don't understand why there's a date there. I think this used to be a city's form, I think. Don't primary. Dispatch. Give me just a second. Yeah, I don't, I don't see why the date is on there. Like one date at the top would be fine. At the top here, it says that if they expect the individual to be able to physically perform the duties again, what date? But that's not really the purpose of this. This is just the original doctor saying, hey, I saw him or whatever. This is what I see. On that date, they're not making a maximum medical improvement recommendation. I mean, I think they're saying, well, he can't lift right now, but after it goes to PT 10 times, he could, but the rest of the stuff, he's at MMI. Like, I mean, I think there's some things that he could potentially get better at or not, or he or she. But the date always confuses that. Couldn't you explain that down here? And some people don't put anything there. I know, but I mean, you know, instead of putting the date, you know, if they think that... Listen, I'm not married to that date. We can take it right off. Yeah, I mean, I just see that probably as an issue. But, I mean, you've got to try to make it as simple as you can. They don't have the time. They claim they don't have the time to do it. Yeah, I mean, there are issues with their training physician completing this. Right. Putting a signature line on there, it may be... Do you all want to have contact information at the bottom? I mean, I don't know, like with their printed name, their phone number... You mean the doctor's information? Yeah, I wouldn't mind having that, because that way we can... If we have a question, we can give a contact where we don't have to try to look at this scribble and try to decide who it is and call him and call everybody to try to find out who it is, you know. I think it would be simple and helpful. So adding printed name and contact information, is that what we're saying? Yeah. Okay. And doing away with the date line, I think. We can do away with the date, but our main concern is if we get somebody that either is able to do everything or is unable to do everything, that we can give it back to them and say, I'm sorry, there are honestly things on here that you can do and sit at a desk. Yeah, you're not an iron lung, you know. Yeah. Because we've gotten more and more that they're marking things and... Because they're not reading it and they're saying, I can't do anything related. Well, I think... Well, some of the stuff related is talking to people. You can talk to me right now. So that's not true. Yeah. You drove here. You can operate a vehicle. That's not true. Well, I think what it is, you've got a rapport usually with the doctor, and he thinks he's helping you. We've discussed that. You know, we've discussed that a bunch of times. You know, and he's helping you. Briefly on a cover letter saying this is what you're actually signing, then it doesn't necessarily have to say you're not part of the thing, you're not part of their determination of disability, but maybe it's, you know, this is the first step in submitting their information and them to independent evaluators. I mean, any sort of explanation other than just this is probably going to be... Oh, it's a big issue. I mean, you know, some of those that do all of them, I've called them and said, Hey, you need to go back to your doctor and get this changed. Well, we are trying to push more things on the individual because we don't have time to go through, like, a lot of the doctors that want it in chronological order, single page, we're pushing it on the individual that's applying, that if something's not right, they have to fix it. That's true. Which is where it should be. And we're not going to call, we're not going to go through all your records and take out dupes and all that other stuff. The amount of time we do cleaning up, it's awful. I don't think we should be doing that at all, frankly. So we have changed, like, the direction page multiple times, and most recently chronological order, you know, one-sided. No dupes, no blank pages, because they just print them off and then they hand them to us. They go to my chart and they print all my records. I mean, we know every cold they've had, it's ridiculous. It shouldn't be your responsibility. It's ridiculous. I don't care. Yeah, so are you guys okay with us just cracking down on them, just being more, like, this is not acceptable, come back kind of thing? Absolutely. This is your responsibility. The harsher the better. I think you should be nicer to them than at the doctor's office. With them and explain the whole process. And hold their hand while they're being examined. We have spoken to a physician's assistant before to explain this form, which we don't mind doing that, but it's a matter of they need to take it back and get it completed properly. So we just want to make sure everybody's on the same page. Yeah, just tell them. We're not going to accept it that way. And the board gave us direction to do that. I know, but knowing our luck, they're going to come find you, you, Dre, and say, Oh, I hope so. Oh, I hope so. They love to call me. You know this. Let's do that then. What we'll do is we'll update this, bring it to the next subcommittee meeting, just for your review, and then we can submit it to the board. Yeah. I would think so, and then we'll give it some time, and next year when we're in a subcommittee meeting, be like, hey, how has this been looking? Like, you know what I mean? Have we had that many problems? Because, I mean, just take a look back. We're going to know. We see them every month or just about, you know, when people submit them. It's getting bad, like with them adding body parts at doctors. I mean, that's happening more and more and more. Yes, and I think we definitely need to reiterate that, too. You can't go changing what you're doing, you know what I mean? I mean, I just had a conversation with one. Is the penalty of perjury, is this a thing? I'm using the right words here. We've tried to get him to charge them, and he won't do it. This is going to be more of a civil, probably. I mean, I've had doctors call me. They're wanting to add body parts. You know, it's not going to fly. No, I mean, yeah, I totally agree. If they add a body part, they have to resubmit the whole application. Absolutely, the entire thing. Start over from scratch, I suppose. That's what we have been stating. But the problem is, is if they go to the doctors, then we've got to pay doctors twice. You know, which, that, I'm not happy. My point is, we've already seen that, doctor. That's not an IME. Then you need to go to a different doctor, too. They have to start over. No, no, we've got to have our doctors. Yeah, but we'll have to start over with a new doctor. We've got to pay for them. I know, but it's, you know. Well, and normally when we explain to them, okay, your other knee is not going to give you a whole body of hemorrhaging over 20%, unless it's totally replaced. They're just trying to get as much as any other knee. They're trying to do the same things. Yes. I need that extra half percentage point so I can get my 60 instead of my 50. Yes. So we're all in agreement with that, I feel like. Yes. Nodding. Yes. All right, perfect. Anything else? All right. We're done.