Month: March 2014

Currently Available to Members in Tiers 2 – 5!

Active members in Tiers 2 – 5 can now log in to MyLAFPP to view and/or print their 2013 Annual Active Member Statement.* Once logged in, simply click on the link in the Online Paper Statement box and then select the year of your choice.
*Please note that Tier 6 members will be notified once their statements become available.
This statement summarizes a member’s individual pension-related information by providing employee information, pension estimates (if eligible to retire), contributions and interest, domestic partner information and beneficiary designation as of December 31, 2013.
For questions concerning your statement, contact the Active Member Services Section at (213) 978-4522.

Annual Board Retreat: March 6, 2014

On Thursday, March 6, 2014, the Department held its Sixth Annual Board of Fire and Police Pension Commissioners Offsite Educational Meeting at the California Endowment Center. This Educational Meeting for the Board and our stakeholders was designed to educate Board members and all of our stakeholders on various issues and topics that are relevant to the administration of pension benefits and investments. Educational sessions included an Overview on Private Equity, Healthcare Reform, Healthcare Reform Panel discussion, GASB 67 and 68 Implementation, Asset Allocation Primer and Experience Studies 101.
The Educational Meeting was attended by several representatives from our member associations, including the Los Angeles Retired Fire and Police Association, Los Angeles Firemen’s Relief Association, Los Angeles Police Relief Association, Los Angeles Police Protective League, United Firefighters of Los Angeles City, Los Angeles Police Command Officers Association and the Los Angeles Port Police Command Officers Association. The Board and staff thank you for your interest and support!
Click here for the presentation material.

On March 12, 2014 the City Controller released audit reports for both Los Angeles Fire and Police Pensions (LAFPP) and the Los Angeles City Employees’ Retirement System. This is consistent with Section 1112 of the Los Angeles City Charter which requires the City Controller, the Office of the Mayor and the Los Angeles City Council to request a management audit of the pension systems be conducted by an independent, qualified management auditing firm once every five years. The first such audit was released in 2007.
We are pleased to report that the current audit found that:
LAFPP is generally operating in an effective manner.
Investment management fees were reasonable compared to our peers.
On a cost per assets basis, LAFPP’s administrative expenses are lower than average.

We look forward to reviewing and addressing each recommendation.

On March 3, 2014, MSN Money released an article by Traders Reserve titled, “3 Huge Cities Flirting with Bankruptcy”. Los Angeles was named as one of the three. Since the economic downturn in 2008, the City has taken the necessary steps – negotiated pension and healthcare costs, reduced its civilian workforce, increased revenues – to improve its financial position. According to a January 2013 study completed by the Pew Research Center, LAFPP is amongst the highest funded public pension systems in the country. For additional information please see our article on Detroit’s Bankruptcy Filing.

THE PENSION REFORM ACT OF 2014 Update as of 3/18/14 On March 14, 2014, San Jose Mayor Chuck Reed announced that he and fellow supporters decided to suspend efforts to qualify their initiative, “The Pension Reform Act of 2014″ (AG# 13-0043) for the upcoming November 2014 General Election. The decision came after Sacramento Superior Court Judge Allen Sumner rejected Reed’s lawsuit against Attorney General Kamala Harris, citing inaccurate ballot language. The judge stated that Reed failed to prove that the ballot summary was false, misleading or biased. As a result of this legal challenge, the proponents concluded that there would not be sufficient time to obtain the 807,615 valid signatures to qualify the initiative for this year’s November election. Instead, they will resume their efforts later for the November 2016 election. Background The Pension Reform Act of 2014, officially titled, “Public Employees. Pension and Retiree Healthcare Benefits. Initiative Constitutional Amendment,” would have amended the California Constitution to allow all public employers, including the City of Los Angeles, if they so choose, the option to modify future pension and retiree health benefits of current employees. The initiative would have provided the following: The constitutional protections would be eliminated for current public employee pension and retiree healthcare benefits for service not yet performed. Government employers would have the flexibility to reduce employee pension benefits for future service if their pension plans are substantially underfunded or if they declare a fiscal emergency.   Benefits earned for service already performed would remain protected by law and may not be modified.  As such, current retirees or an employee who retires prior to any benefit changes would not be impacted. Government employers would be required to publish a non-binding “stabilization report” for every year that the actuarial funding status of their pension plans is below 80 percent. Please be assured… The Board of Fire and Police Pension Commissioners, management and staff will continue to monitor this and other pension reform efforts and provide member updates as they become available.

2014 ANNUAL REPORT

The 2014 Annual Report for Los Angeles Fire and Police Pensions is now available online!

As of June 30, 2014, the System’s assets grew from $15.75 billion to over $18.27 billion on a market basis, while serving over 25,600 members including 13,097 active and DROP members and 12,502 retired members and beneficiaries. The System’s pension benefits are actuarially funded at 86.6 percent and the health subsidy benefits are funded at 43.2 percent.  Combined, the funded status of these benefits is 80.8 percent.  It is important to note that LAFPP has been pre-funding health subsidy benefits since 1989, and is one of the few public pension systems to do so.
Our market rate of return of 17.86 percent marks the second year in a row that the System experienced double-digit returns. This increase from the previous year’s 13.01 percent return was primarily due to strong performance in the domestic fixed income and international equity markets.  As a result, LAFPP continues to remain amongst the highest funded public pension systems in the country.
 
This past fiscal year was also a year of great accomplishments at LAFPP. Our successes include the completion of security and network infrastructure upgrades to help ensure the protection of our membership information. In addition, the project to replace our pension administration system, one of the most significant projects undertaken by staff, is well underway.  A major goal of the new system is to provide additional functionality to members and staff.  We continue to refine and update our Strategic and Business Plan goals to build upon our prior achievements and meet new challenges. All achievements ultimately support our mission – to advance the health and retirement security of those who dedicate their careers and risk their lives to protect the people of Los Angeles.
 
In addition to this report, our historical annual reports, actuarial valuations and financial statements are available in the Financial Reports section.