Good20 afternoon. This is a continued public21 hearing of the Committee of the Whole.22 We will now hear from the Board23 of Pension and Retirement.24 (Witnesses come forward.)25 139 4.18.11 COMMITTEE OF THE WHOLE - Bill 1101371
Good2 afternoon. Welcome.3 Please identify yourself for4 the record.5
My name is Brad8 Woolworth, Head of Private Markets and9 Real Assets.10
Thank11 you.12 Mr. Bielli, you're going to be13 testifying?14
Good afternoon,18 Council President Verna and members of19 Council. My name is Francis Bielli. 12 From July 1, 2010, through13 March 31, 2011, there have been 91514 retirements, and 1,009 withdrawals of15 contributions. 19 For the period July 1, 2010,20 through April 7, 2011, there were 1,82021 DROP applications received and 807 final22 DROP enrollments. 3 The Board of Pensions and4 Retirement is committed to supporting the5 Administration's goal of 25 percent6 minority-, women-, and disabled-owned7 businesses participation in City8 contracting. 11 COMMITTEE OF THE WHOLE - Bill 1101371 managers make up the largest portion of2 the Board's contract expenses. 8 Efforts by the Board to9 increase minority participation include10 the Opportunity Fund. The Opportunity11 Fund creates opportunities for minority-12 and women-owned firms to manage portions13 of the Board's portfolio. This program14 has grown from an original allocation of15 $80 million in 1999 to $186 billion16 today. 9 Additional outreach to increase10 the Board's participation percentage11 includes sending notification of every12 RFP to the following organizations: The13 African-American Chamber of Commerce of14 Pennsylvania, New Jersey, and Delaware;15 the Greater Philadelphia Chamber of16 Commerce; the National Association of17 Asian-Americans Professionals; the18 Greater Philadelphia Urban Affairs19 Coalition; and the Women's Business20 Development Center. 4 Retirement planning seminars5 continue to be attended by an average of6 60 percent per session. 8 A secondary retirement9 education program designed to serve10 younger employees has been in place for11 four years. 18 The deferred compensation19 seminars have expanded to include visits20 to all site departments, with existing21 and newly appointed employees. The22 processing time for loans from deferred23 compensation has dropped from eleven days24 to four. 7 Participation in deferred8 compensation allows an employee to make9 pretax contributions, which grow tax10 deferred, reduce the participant's11 adjusted gross income, and enhance12 retirement savings. 17 The Board of Pensions continues18 to make use of our current technology to19 make our process more efficient. 11 COMMITTEE OF THE WHOLE - Bill 1101371 Recently, we have designated2 the imaged file as the official pension3 file and are coordinating the process of4 sending the backup paper files to remote5 storage. 17 Despite improvements we have18 made using the technical currently19 availability, the Board continues to20 believe a new and comprehensive system21 for compiling electronic records,22 processing retirements, and making23 benefit payments would create greater24 efficiencies. 9 The Pension Fund returned10 14 percent for the fiscal year ending11 June 30, 2010. The return placed the12 fund in the top quarter tile among all13 quartile among all public funds. 20 The Board also took action to21 lower the expected future earnings rate22 for the fund. 15 commencing in Fiscal Year2 2011. 19 percent. 15 assumed rate of return is the lowest10 the fund has had since 1992. 4
Thank5 you very much.6 How many money managers do you7 have and how are they selected?8
The money managers9 are selected by the Board. Some of the10 money managers, the equity money11 managers, are responding to our peer12 requests. Managers in the area of hedge13 fund, private equity, and real estate are14 brought forward by research by our15 investment staff and/or the consultants16 that we use in those particular areas.17 The prospective managers make a18 presentation to the Board, filers are19 selected, and then the manager is20 actually selected.21 Mr. Woolworth will be able to22 tell you exactly how many matters we do23 have.24
Sure. So25 152 4.18.11 COMMITTEE OF THE WHOLE - Bill 1101371 depending on the asset class, we have a2 total of --3
I'm4 sorry. Would you pull the microphone up5 closer to you, please.6
Oh, sure. I'm7 sorry.8 So depending on the asset9 class, in total -- and I have to add the10 numbers in my head. Let me just do that11 real quickly.12 Okay. We have 121 managers in13 total. That includes private equity,14 real estate, hedge fund, plus our equity15 managers, our portfolio alpha overlay, et16 cetera.17
Once21 a firm is selected, how is their22 performance monitored?23
Sure. So we24 monitor performance on a monthly basis.25 153 4.18.11 COMMITTEE OF THE WHOLE - Bill 1101371 If it's in the public equity realm -- so2 that includes both public equity and3 fixed income, for alternative assets that4 are more illiquid, such as private equity5 and real estate, that performance data is6 given on a quarterly basis.7 My understanding is that the8 policy is to look at managers on a9 quarterly basis to see how they10 performed. But managers -- you know,11 let's assume that they have -- you know,12 performance is not good over a year's13 time frame. We would definitely take a14 second look, maybe put them on watch.15 But we typically -- to actually16 take action, if something is going wrong,17 we would need kind of three years of18 returns.19
So my23 next question was going to be: What24 happens if a firm is not meeting its25 154 4.18.11 COMMITTEE OF THE WHOLE - Bill 1101371 benchmark? And at what point are they2 placed? You mean you keep a watch for3 three years before you can replace them?4
It -- it -- it5 does depend. Obviously, certain6 circumstances can get a manager removed.7
Under certain10 circumstance, a manager could potentially11 be removed earlier.12 I'm not an expert on this13 particular process, but --14
The Chief17 Investment Officer.18 COUNCIL PRESIDENT VERNA:19 Continue.20
Sure. So we're21 constantly monitoring performance of22 managers. And if there was a significant23 event that was taking place at the24 manager's firm, if the person that we had25 155 4.18.11 COMMITTEE OF THE WHOLE - Bill 1101371 invested with, who is the head of a firm,2 had suddenly left, that would be a big3 indication that something was wrong, and4 we would put them on watch, or5 potentially probate them.6 We would continue to monitor7 performance to see if it was impacting8 the firm. If it did, the Board has the9 ability to terminate a manager at any10 time. That is up to the Board's11 discretion.12 We try not to overreact to13 short-term return declines, especially if14 you look at the market recently. I think15 everybody was in decline. So we take a16 relatively pragmatic approach.17 But certain factors obviously18 are stronger than others. If staff is19 suddenly leaving, if the firm manager's20 total assets suddenly decline because21 everyone is trying to pull out, those22 would be significant, and we would act23 immediately to recommend termination.24
How25 156 4.18.11 COMMITTEE OF THE WHOLE - Bill 1101371 are the money managers paid?2
In the equity3 and fixed income space, the money4 managers receive a fee based on total5 assets under management. It could be6 like a half of a percent, as an example.7 If a manager had $100 million8 under management and they received a half9 a percent per year, then they would be10 receiving $500,000 per year.11
No, they're not24 paid through appropriations.25 157 4.18.11 COMMITTEE OF THE WHOLE - Bill 1101371
I2 think I asked the question earlier, how3 are they paid?4
They're paid5 based on their assets under management.6 So we send them --7 (Addressing Mr. Bielli.)8 Right? Isn't that how it works?9
Yes. The Board10 votes to invest with a certain money11 manager. That money from the Pension12 Fund will be allocated to that money13 manager, and the money manager will14 receive --15
I'm16 being told that the City Charter17 indicates that they must be paid through18 appropriations. Now, if they're not paid19 through appropriations, how are they20 being paid?21
No, they are paid22 through the assets that are invested with23 that firm.24
So,25 158 4.18.11 COMMITTEE OF THE WHOLE - Bill 1101371 again, I repeat, they're soft dollars,2 are they not?3
I believe they4 are, yes.5 (Rob Dubow returns to witness6 table.)7 COUNCIL PRESIDENT VERNA:8 Mr. Dubow?9
Yeah, that's right.10 They're netted out of the assets that the11 managers manage, and that's the way that12 they're paid.13
And14 can you tell us the percentage that15 they're paid?16
It varies by17 manager, but I think Mr. Woolworth can18 give you the range.19
Sure. And let20 me clarify. "Soft dollars" in the21 investment industry tends to mean22 something else; I didn't understand the23 question. It has to do with referral24 fees paid to brokers that -- I won't get25 159 4.18.11 COMMITTEE OF THE WHOLE - Bill 1101371 into that.2 So I understand your question.3 The way you meant it, it is paid as they4 have indicated.5 The range for fees depends on6 the type of manager in the equity and7 fixed-income space that are publicly8 traded securities. The management fees9 are based on total assets under10 management, and they are generally11 relatively low.12 In the alternative space, it13 can -- the total management fees are14 based both on the amount of capital under15 management and also a performance fee.16 And that would be in the real-estate,17 private-equity, and hedge fund space.18 And that can range, you know, to 1 to 219 percent for assets under management fee20 plus a 20 percent performance fee.21
Can22 you provide us with a listing of your23 money managers, how they are performing,24 and the amount you expect to pay them for25 160 4.18.11 COMMITTEE OF THE WHOLE - Bill 1101371 Fiscal 2011 and 2012?2
Madam10 President, you may have it today.11 There's percentages of what they pay out12 listed in the testimony. All you have to13 do is reverse the numerator and14 denominator, and you'll get the -- I15 mean, it might take a few minutes of16 math, but they have pretty much have17 given us percentages of the fees they pay18 out.19
But I20 think I was asking by manager.21 Councilman O'Neill, it's your22 turn, too.23
Okay,24 thank you.25 161 4.18.11 COMMITTEE OF THE WHOLE - Bill 1101371 Who is the Chief Investment2 Officer?3
There's an active4 Chief Investment Officer, Rhonda5 McNavish, who is ill right now; she's6 unable to be here today.7
Okay. Is8 there an Assistant Chief Investment9 Officer?10
She was the11 previous Chief Deputy Investment Officer.12 The Investment Officer the previous13 number of years has left.14
Okay. But18 has there been anybody move up to the19 Deputy position acting while the --20
I think, for all21 intents and purposes, Mr. Woolworth has22 been acting in that capacity.23
Okay.24 Let's stick with your testimony first.25 162 4.18.11 COMMITTEE OF THE WHOLE - Bill 1101371 The expenses for commissions,2 and we -- pretty much, that's the fees.3 I mean, it's what they get, whether it's4 a percentage or whatever you're -- a half5 a million or half a point, depending on6 all that.7 And the total appears to be8 somewhere around 35 million that we spend9 on that based on what the minority10 participation is. If 10.9 percent was11 3.37 million, it's going to be somewhere12 at 35 to 40 million that we're spending?13
Okay. And15 that's not coming out of -- the Finance16 Director is here. There was a piece of17 information that the Council President18 mentioned; I'm not sure if the Finance19 Director answered it. And that is that20 the Charter requires it to be21 appropriated money.22 And do we have a legal opinion23 that it doesn't have to be, that it can24 be soft money? We might as well take25 163 4.18.11 COMMITTEE OF THE WHOLE - Bill 1101371 them one at a time.2 (Rob Dubow returns to witness3 table.)4
Okay.10 Thank you.11 You mentioned, under "Staffing"12 that you reduced your overtime by 34,00013 and your temporary staff by 20,000. What14 you don't tell us is, what is it reduced15 from? In other words, 34,000, if it used16 to be 48,000, is a real big improvement.17 But if it was 250,000, it's a small18 improvement.19
I can go -- Fiscal20 Year '10, the actual overtime was21 $45,051, and the temporary seasonal was22 $22,175.23 Fiscal Year '09, for24 comparison, the overtime was $112,963,25 164 4.18.11 COMMITTEE OF THE WHOLE - Bill 1101371 and the temporary seasonal was $66,814.2
Well, in the last5 two years, yes, I did bring it down6 dramatically.7
Well, you8 got to get that in here. That's -- when9 you have something that's a good story10 like that -- that's a high -- a very high11 number. We wish we had more stories like12 that in our overtime --13
That's why I14 appreciate you asking me the question,15 Councilman.16
-- and in17 temporary.18 You mentioned in the paragraph19 under "Requirements" on the first page20 the number of actual DROP enrollments.21 That's irrevocable once they pass the22 90-day period?23
Okay.25 165 4.18.11 COMMITTEE OF THE WHOLE - Bill 1101371
Okay,8 that's what I assumed.9 And what I wanted to know is,10 Council passed a resolution where -- and11 I believe it was unanimous, that whenever12 there is legislation on DROP that people13 will be protected and given a time period14 when they can go in to let the City15 employees know that they shouldn't worry16 if that's what's causing them to go in,17 that there will be a grace period of18 sorts to do that.19
Can you21 tell me -- and you don't have to have it22 today, 'cause I don't even remember the23 date of the resolution, but how many DROP24 enrollments became final after that as25 166 4.18.11 COMMITTEE OF THE WHOLE - Bill 1101371 opposed to before?2
Okay. And5 I'd appreciate that 'cause it would give6 more clarity to the numbers.7 When we talk about the 35 to8 $40 million of investment fees, the --9 there's also money that's made in trades,10 huge amounts usually, because we're11 dealing with huge amounts of money.12 Do we have a policy that deals13 that in terms of what we allow our money14 manager firms, if they're doing their own15 trading, to make off of those trades?16
(Indiscernible.)21 ...commission recaps and brokerage22 commission?23
Sure. So we25 167 4.18.11 COMMITTEE OF THE WHOLE - Bill 1101371 have a commission recapture program that2 essentially is set up and has a 253 percent goal, where our money managers4 seek to execute trades through a list of5 brokers, where they receive up to 756 percent of the cost back that's basically7 check back to us. So it's almost like a8 rebate program.9
Okay.10 That offsets those fees that we would11 have paid them otherwise under the12 percentage?13
And is it15 strictly followed, or do some of them not16 care? Do any of them trade themselves?17
I mean19 trade themselves. In other words, within20 their own firm. Are those fees raised in21 their firm or just under the firms that22 you -- you said there's a list of firms23 that they can trade through.24
Right.25 168 4.18.11 COMMITTEE OF THE WHOLE - Bill 1101371
Is there a3 prohibition against them trading in their4 own firm?5 (Dan Falkowski comes forward.)6
Dan, could14 you put your name on the record and spell15 your last name? 'cause I didn't hear it16 real well.17
The commission25 169 4.18.11 COMMITTEE OF THE WHOLE - Bill 1101371 recapture program has been a little bit2 under its target. I believe it's been in3 the ballpark of about 15 percent for4 Fiscal Year 2010.5
Okay. In9 other words, our fees are being reduced10 by 15 percent rather than 25 percent?11 I'm not sure what --12
No. Of the13 total commissions of all our trades that14 have been managed by our managers through15 our brokers, 15 percent of those trades16 have gone to the brokers on our17 commission recapture list.18
Okay. So19 instead of trading with the brokers on20 our commission recapture list, they're21 trading with someone else, which could be22 their own firm's trading desk.23
Most -- I know24 most of --25 170 4.18.11 COMMITTEE OF THE WHOLE - Bill 1101371
No, no.2 Could just answer the question first and3 then give me the explanation?4
Okay. So6 it's a yes.7 Now, if you've got more to add,8 that's fine more, but I wanted to get the9 yes or the no first. So yes.10 Go ahead.11
And most of our12 managers trade with external brokers as13 opposed to trading in-house.14
Okay. But15 they would still rather use the16 relationship and not benefit us, and are17 they graded on that, how much of that18 they do versus how much they don't do?19 Does anybody know? It doesn't have to be20 your answer.21
Yes, they are. In22 fact, we have an organization that23 reviews the brokerage transactions, and24 we get that review quarterly.25 171 4.18.11 COMMITTEE OF THE WHOLE - Bill 1101371
And we do look at3 that. And all of the firms are subject4 to best execution, pursuant to the5 contract --6
Of course.7 It's like an airplane pilot driving, but8 there are trends. When you see the same9 pilot always has to use the same runway10 no matter what, we know that that pilot11 just likes doing what they like doing12 because we can't force them to do13 otherwise.14 Can you get us the list of your15 121 brokers, what the fee value was, what16 it was offset by, and where they came in17 using that goal?18 Because believe me, when you do19 it over a long period of time, it's not20 the exigent circumstance of that trade.21 It could be on any occasion, but you22 don't see it over a period of time.23 What you do see is, our wish is24 being ignored. And if we're ignoring our25 172 4.18.11 COMMITTEE OF THE WHOLE - Bill 1101371 own regulations and suggestions and not2 incorporating them into our evaluation, I3 want to know about it, and I think the4 Council should know about it, okay?5 Can you get that to us?6
Okay,8 thank you.9 While we're on fees, the10 alternate to managed investments, there's11 another name for this, and you can help12 me.13
Actively15 manage. We're managed, and the opposite16 is index funds, which is passively17 managed, right?18
We are mostly19 actively managed. We do have a number of20 indexes investments --21
Right. So22 we're mostly managed.23 As a percentage of what money24 is invested, how much is managed and how25 173 4.18.11 COMMITTEE OF THE WHOLE - Bill 1101371 much is indexed or passive? How much is2 actively managed versus passively managed3 with index funds? Is it --4
Sure. So all5 of the fund -- the (indiscernible) line6 and Northern Trust, they are both index7 funds. Let me see if I can give you an8 answer right now.9
If it's 5010 percent versus 50 or 95 versus 5, I mean,11 it's -- ballpark is good enough right12 now.13
Sure, sure.14 About 650 million of the total15 $3.6 billion in assets is active.16
Okay. And20 do we study the end of a year when we're21 analyzing the performance of our fund,22 our managers and, you know, the fund23 itself? Do we do an -- any kind of an24 analysis, extended or otherwise, but an25 174 4.18.11 COMMITTEE OF THE WHOLE - Bill 1101371 analysis of when we paid out our 35 or2 $40 million, what would the index funds3 have gotten versus what we've gotten, and4 what would the savings have been with an5 index fund?6
Let me answer7 first that in each of our flash reports8 on a monthly basis, which do appear on9 our Web page, we do the comparison for10 our equity investments against the index11 benchmark, so we do a con --12
As far as fees,19 Mr. Woolworth would be able to answer20 that.21
But that's22 not what I'm looking for. I'm looking23 for the index funds that do the best.24 In other words, we're trying to25 175 4.18.11 COMMITTEE OF THE WHOLE - Bill 1101371 find the best active managers out there.2 We don't want to rely on an average when3 we make these decisions. We want to know4 if X index fund in a certain area is5 performing at a high level for very low6 fees.7 What are we doing actively8 managing with high fees, relatively high9 fees. It could be argued they're not10 high for active managed fees -- I don't11 want to get into that argument -- but12 certainly high compared to index fund13 costs.14 Do we have any analysis,15 whether it's monthly, annually, to show16 how we compared to the top five funds,17 the top three fund, whatever we would18 want to have our money in if we decided19 to go.20 We wouldn't look for the one21 that what was the average; we would look22 for the ones that were at the top. Do we23 do that analysis?24
Yes. By25 176 4.18.11 COMMITTEE OF THE WHOLE - Bill 1101371 definition, when you say "an index fund,"2 the performance is based on that index.3 So yes, the fees are low. And4 so, what we do is, the index becomes the5 comparison versus the actively managed --6
Right, but7 I don't want you to use that comparison8 for my question, because I can understand9 averages. What I also understand is top10 five percent.11 And if you were switching12 today, you turned a switch and got rid of13 all the actively managed funds and went14 to total index, we're not looking for15 index funds that met the average; we're16 looking for the ones that were above17 average, as high as possible above18 average.19 So to do any real analysis,20 since we don't have to do anything with21 index funds except send them money --22 they shoot back the returns, we have very23 low fees -- to get a comparison, we have24 to know that we're comparing to the ones25 177 4.18.11 COMMITTEE OF THE WHOLE - Bill 1101371 we would pick if we were choosing, not2 what the average is, 'cause we don't want3 that average fund to be our --4 And if neither of you follow5 this, we'll go slower.6
Councilman, I7 follow it, but an index fund mimics the8 index. An index fund is the index.9 There is no index fund that exceeds the10 index. An index fund is the index.11
So you12 think the index fund, it doesn't matter13 which one you pick.14
No. As long as15 they're mimicking the index, they are the16 index. That's what an index fund is.17
Within one 100th20 of a point of each other generally, yes.21
It's the fees that23 are the key. An index fund that charges24 less fees will give you a better return25 178 4.18.11 COMMITTEE OF THE WHOLE - Bill 1101371 than an index fund that charges a little2 bit more of a fee.3 But an index fund, by4 definition, is mathematically calculated5 --6
Now, the10 charges for the fund, how much do they11 range in index fund? You said some were12 more than others.13
Sure. I mean,14 some are basement; they're tenths of a15 percentage point. Some are up to 1, 1.516 percentage points.17
So if the22 Pension Fund were doing it, we'd be -- so23 if we're doing comparisons, we're doing24 it with the index, which is within a25 179 4.18.11 COMMITTEE OF THE WHOLE - Bill 1101371 hundredth --2
-- of each7 other, but there's a disparity much8 greater than that between the very lowest9 and the very highest cost.10
In the universe of11 index fees, there is a variable in cost,12 yes.13
All right.14 And that's a lot of money. I mean, that15 could be ten times the fee if one's .1016 and one's 1.1 or something.17
Certainly.18 (Indiscernible; parties talking19 over each other.)20
Even21 though they're both small for a large22 fund, that's a huge differential.23 Do we compare what it would24 caught us for the lowest, the higher,25 180 4.18.11 COMMITTEE OF THE WHOLE - Bill 1101371 somewhere in the middle? Because there's2 two things to compare, you're telling me,3 and I'm learning here.4 You're -- one, you're looking5 at the index, and that doesn't vary much.6 Two, you're looking at who's lower versus7 who's higher. Is that all factored into8 this equation where you compare how we9 did compared to the index funds?10
That's right. And14 the Board, on a regular basis, asks15 questions of any potential investment16 manager, whether it's an index fund17 manager or an active manager, what their18 fees are and whether or not they'd be19 willing to lower their fees.20 That's part of the --21
Okay. So25 181 4.18.11 COMMITTEE OF THE WHOLE - Bill 1101371 it's factored in. And you can give us --2 how far back can you go and show us the3 difference? Can we get ten years since4 we're now doing ten years on smoothing so5 we can see what the difference would have6 been with passively-managed funds versus7 actively-managed fund?8
Well, I think if9 we go back and do that retroactively,10 we'd have to pick which funds we're11 talking about because, as we said, the12 fees are all different, so --13
Well, just14 pick the best. I assume we'd have the15 lowest ones.16
We'll pick20 commercially recognizable index funds and21 --22
Yeah.23 Something like Vanguard has real low --24 that's good enough.25 182 4.18.11 COMMITTEE OF THE WHOLE - Bill 1101371
No, but4 they're known for their low fees, so --5 low fees in just about everything, but6 certainly on index funds they've been7 low.8
And that's a9 significant factor, is the size of the10 fee when choosing to invest.11
Now, when12 do our return-on-investment report, and13 in this case, I believe it was -- the14 most recent was -- I want to get the15 right page here -- 14 percent? The16 complete year was 14 percent, and then17 there's partial year.18 So when you ended June 30,19 2010, it was 14 percent, right?20
Now, does25 183 4.18.11 COMMITTEE OF THE WHOLE - Bill 1101371 that -- before we have our percentage on2 all that money that was out there for3 investment, we've netted out all of the4 cost that we've paid all the fees?5 They're all -- it's all net of that?6
Okay, this9 is gross.10 Do you have a net number for11 us?12
Okay. And18 that will be fine for that section.19 And the deferred comp that you20 mentioned, does the Pension Board or21 ICMARC choose the 457 Fund, make the --22 choose the -- make the choices that the23 employees have to choose from?24
The Board does25 184 4.18.11 COMMITTEE OF THE WHOLE - Bill 1101371 that in conjunction with AON, who's a2 consultant in that area.3
Okay. And4 does ICMARC get -- in any of their5 jurisdictions, do they make the choice,6 choices? I just notice that ours7 aren't -- still, even with ICMARC, aren't8 nearly as good as several 401(K)s that9 I'm familiar with, and I can't figure it10 out. I think they're better than they11 were under the previous.12 But the -- I just -- I know13 it's a different question for you because14 it's a Board decision, but does ICMARC15 recommend certain funds than the Board16 chooses with their consultant -- AON, is17 it?18
Let me20 finish.21 To pick or choose? And then,22 at the end the year, is there an analysis23 done, whether the ICMARC choices would24 have been better than the Pension Board's25 185 4.18.11 COMMITTEE OF THE WHOLE - Bill 1101371 and the consultant's choices combined2 when you combine those two entities, the3 consultant and the Pension Board?4
I'll take the5 first part of your question.6 ICMARC does not make7 recommendations as to which funds should8 be included in the deferred compensation9 plan; they are simply a third-party10 administrator of the plan.11
Okay. But12 they are one of the largest investment13 companies around, right? I mean, they're14 huge.15
Yeah,17 okay. Do we even ask them for their18 comments? They manage funds all over the19 country. They manage them for20 professionals, they -- I mean, I'm very21 familiar with ICMARC.22 They really play no role in23 this. They just are doing the management24 after the fact of the choice.25 186 4.18.11 COMMITTEE OF THE WHOLE - Bill 1101371