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The funded ratio of our retiree health benefits is 81.1% (based on valuation value of assets and market value of assets) as of June 30, 2017, an increase from the last annual valuation.  The City of Los Angeles began prefunding LACERS retiree health benefits in 1987.  For more information, facts, and figures, click here for LACERS’ most recent Actuarial Valuation.

LACERS minimizes its retiree health care cost increases by: going out to bid frequently on its health care contracts, negotiating rates based on actual utilization data, conducting periodic dependent audits, and maximizing the impact of its unique retiree-only wellness program. Over the last 10 years, our annual medical plan rate increases averaged just 4.81% compared with the average actuarial medical trend rate of 8.28%.

Last fiscal year (2016-17), LACERS retired 893 Members. That is about 60% more Members than LACERS retired in the early 2000s and the highest number in any year since then.

For Fiscal Year 2016-17, LACERS’ investment return was 13.3% (gross of fees). LACERS’ returns over longer periods are as follows:  10 years: 5.3%; 20 years: 7.0%; and 30 years: 8.4%.

The average annual retirement benefit amounts for our Members retiring in 2016 are as follows:
  • Members with between 21 and 25 years of Service: $45,552
  • Members with between 26 and 30 years of Service: $54,168
  • Members with over 30 years of Service: $65,976

Approximately every three years, LACERS’ Board reviews our plan’s economic and demographic assumptions to help ensure that our pension and retiree health care benefits are appropriately funded and the current taxpayers are paying for the services they are receiving, including the retirement costs for current City employees.

To help achieve the best risk-adjusted investment returns, the LACERS Board has revamped its investment manager line-up over the last several years. Since June 2013, twenty-nine investment managers have been terminated, resigned, or not had their contracts renewed. The funds from those managers were spread amongst other investment managers – both existing and new.

The fiscal year 2016 payroll for LACERS Active Members was higher than ever at $1.88 billion, despite the fact that we had about 6,000 fewer Active Members than we had at our peak.

The fiscal year 2016 payroll for LACERS Active Members was higher than ever at $1.88 billion, despite the fact that we had about 6,000 fewer Active Members than we had at our peak.

LACERS strives to keep investment fees low.  Based on the 2016 Cost Effectiveness Management Investment Benchmarking Report, LACERS total investment cost of 0.469% (of total assets) was lower than the U.S. pension plan median cost of 0.538%.  LACERS’ net-of-fees return of 0.3% was higher than the U.S. pension plan median net-of-fees of -0.6%.  Fees and returns are based on calendar year 2015 data.

The auditors from Brown Armstrong Accountancy Corporation (Brown Armstrong) have completed the audit of LACERS’ financial statements for the Fiscal Year ended June 30, 2016. Brown Armstrong has issued an unmodified (“clean”) opinion, indicating that the financial statements fairly present LACERS’ fiduciary net position, and changes in fiduciary net position for the year ended June 30, 2016 is in conformity with generally accepted accounting principles. An unmodified opinion is the highest opinion possible. Further, there were no significant findings discovered in the audit.