Category: Newsroom

On June 1, 2017, the Board of Fire and Police Pension Commissioners approved the Plan actuary’s recommendation to lower the investment return assumption from 7.50% to 7.25%.  This action will help ensure the long-term viability of the Plan to properly fund the benefits for members. Additionally, this change more closely aligns with the Plan’s expected returns based on the current asset allocation and capital market outlook.

Segal Consulting, the Plan’s actuary, presented its findings from its review of the economic assumptions to the Board and recommended that the investment return assumption be reduced to 7.25%, primarily due to a continued decline in inflation over the past two decades.  (The assumption was previously lowered in 2014 from 7.75% to 7.50%.)

The investment return assumption is the expected long-term rate of return on the Plan’s investments, after expenses.  One component of this assumption is the inflation assumption, which was also lowered from 3.25% to 3.00% due to the low inflationary economic environment.  The “across-the-board” salary increase assumption was also reduced from 4.00% to 3.50% to be consistent with the recommended inflation assumption.

In addition to the economic assumptions, the Board considered the findings and recommendations detailed in Segal’s triennial Actuarial Experience Study covering July 1, 2013 through June 30, 2016.  The study compares the Plan’s actual experience to the non-economic (or demographic) assumptions previously adopted by the Board.  Based on the Plan’s experience, the Board adopted the actuary’s recommendations to adjust various assumptions such as retirement rates, termination rates, and disability incidence rates.  The Board also adopted changes to the mortality rate assumptions based on staff’s analysis of Segal’s recommendations.  As industry approaches to developing mortality rates continue to evolve, staff and the Plan actuary will continue to monitor this assumption (and all others) in future studies.

Adoption of the economic and non-economic assumption changes is estimated to have a 5.7% impact on the City’s contribution rate to the Plan. Other recent experience may also help mitigate the impact to the City’s contribution rate from lowering the assumed rate of return.

It is important to note that the actuarial assumptions do not determine the “actual cost” of the Plan.  The actual cost is determined by the benefits and administrative expenses paid, offset by contributions and investment income received.  The use of realistic actuarial assumptions is critical in maintaining adequate plan funding, while fulfilling benefit commitments to LAFPP members already retired and to those nearing retirement.  Accurate actuarial assumptions aid in achieving equity across generations of taxpayers.  The goal is to fund employees’ benefits while they are rendering service and taxpayers are receiving services from those employees.

The current actuarial experience study as well as historical studies can be found on our website at https://lafpp.ddsandbox.net/financials.

September 20, 2017 marked Sam Diannitto’s last meeting as a Commissioner of the Board of Fire and Police Pension Commissioners (Board).  After 42 years of serving our members, Commissioner Diannitto officially resigned his position as the Fire Retired Board Member and will pass the torch to a new representative who will be sworn into office at the October 5, 2017 Board Meeting.

Commissioner Diannitto’s career with the City started with the Fire Department in 1954.  He retired as Assistant Fire Chief in 1997 with 43 years of service.

His legacy with the Board started in 1972 when he was elected by members of the Fire Department as the Fire Active Board Member.  He served five terms for a total of twenty-five years.  Commissioner Diannitto then began his tenure as the first elected Retired Fire Board Member on July 1, 2000, when the Charter was changed to allow two retired members to serve on the Board.  He was re-elected to serve three more terms beginning in 2005, 2010 and most recently in 2015.  Commissioner Diannitto held the position of Vice-President of the Board in 1975-76 and served twice as Board President in 1976-77 and 1991-92.

His education and other distinguished service includes:

• Bachelor of Arts degree from University of Southern California
• Certificate of Money Management and Advanced Money Management from Wharton School of Finance
• Vice President and later President of the National Conference on Public Employee Retirement Systems (NCPERS)
• Vice President of the United Firefighters of Los Angeles City
• Chairperson and member of the Public Employees Committee of the International Foundation of Employee Benefit Plans (IFEBP)
• Membership in various associations, including USC Alumni, Fire Chief Officers, NCPERS, IFEBP and Government Finance Officers.

On May 19, 2016, the Board of Fire and Police Pension Commissioners formally dedicated the Boardroom in the LAFPP office building to Sam Diannitto.  We will continue to recognize his long history of leadership, commitment and dedication to the sworn members of Los Angeles Fire and Police Pensions.  Thank you Commissioner Sam Diannitto for your service. 

For the first time in LAFPP history, the Fund’s total assets reached an unaudited market value in excess of $21 billion dollars as of July 18, 2017.  This increase, up from the June 30, 2016 value of $18.53 billion, is reflective of the City’s contribution of $637.7 million on July 15, 2017 and a preliminary unaudited investment return of 12.9% for Fiscal Year ending June 30, 2017. The Fund experienced strong returns in 2016-17 from both its domestic and international equity portfolios.

LAFPP is one of the largest public safety pension funds in the country, administering retirement benefits for almost 26,000 active and retired sworn employees of the City of Los Angeles.  More information is available at About LAFPP. 

On July 26, 2017, the City Council confirmed Mayor Garcetti’s reappointment of Pedram Salimpour, MD to the Board of Fire and Police Pension Commissioners (Board) for a second term beginning July 1, 2017 through June 30, 2022.

On July 26, 2017, the City Council confirmed Mayor Garcetti’s reappointment of Pedram Salimpour, MD to the Board of Fire and Police Pension Commissioners (Board) for a second term beginning July 1, 2017 through June 30, 2022.  Dr. Salimpour has been instrumental in working with the Associations and Stakeholders to benefit LAFPP members.  He served as Board President from July 2016 through June 2017. Congratulations to Dr. Salimpour for his continuous dedication as a Commissioner of the Board!

Each year, the Board of Fire and Police Pension Commissioners elect its Officers of the Board during the second meeting in July. On July 20, 2017, the Board elected Commissioners Ruben Navarro and Corinne Babcock as the new President and Vice President, respectively. 

Commissioner Navarro was first elected to the Board by the active members of the Los Angeles Fire Department in November 2009. He was recently re-elected to a second term, beginning July 2017 through June 2022. He succeeds Commissioner Pedram Salimpour, MD, who served as Board President since July 2016.

The primary responsibilities of Board President are to oversee the administration of the pension system; its assets, investments, actuarial services, rules and regulations. Furthermore, the Board President provides leadership in furthering the mission of LAFPP “to advance the health and retirement security of those who dedicate their careers and risk their lives to protect the people of Los Angeles,” and the delivery of professional and prompt services to over 25,000 active and retired members. The Board President also exercises the following duties:

• Approves the Board agenda; presides at all Board meetings, ensuring that such meetings are conducted in an efficient manner and in accordance with the City Charter and Administrative Code, applicable public meeting laws, and relevant Board policies;
• Determines who shall act as spokesperson for the System should the need arise; and,
• Approves the travel expenses incurred by the General Manager and the Board, as appropriate.

As Vice President, Commissioner Corinne Babcock will assume the duties of the Board President when the President is absent or if the President should delegate the Vice President to act.  She will also assume the duties of the President if the President becomes unable to carry out his duties. Commissioner Babcock was appointed to the Board by Mayor Eric Garcetti in December 2013. She is currently serving her second term that ends in June 2019.

Congratulations to Commissioners Navarro and Babcock as they begin their new roles on the Board!

The current term for the Fire Department Retired Member of the Board of Fire and Police Pension Commissioners will end on June 30, 2020.  On June 30, 2017, Commissioner Sam Diannitto resigned from the Board as the Fire Department Retired Board member effective October 1, 2017. Since Commissioner Diannitto’s term was scheduled to expire on June 30, 2020, his resignation leaves an unexpired term of thirty-three (33) months. The Office of the City Clerk, in conjunction with the Department of Fire and Police Pensions, is scheduled to conduct a Special Election on Tuesday, September 19, 2017, to fill that position.

BOARD MEMBER DUTIES – The Board exercises the prudent person standard in the discharge of its duties.  It has sole and exclusive fiduciary responsibility to administer the Fire and Police Pension System (System) and its assets; has the authority to set and adopt investment policies for over $20 billion in fund assets; and has the duty to establish actuarial assumptions and adopt rules and regulations necessary to administer the System.

Preparation for regular and special meetings requires an individual to commit hours of advanced reading of Board Reports and disability cases.  The Board normally meets on the first and third Thursdays at 8:30 a.m.  Most meetings are from two to four hours.

CANDIDATE PROCESS – Only retired, sworn Los Angeles Fire Department members of the System are eligible to run and vote for this Board seat.  Members who are interested in becoming a candidate are required to complete and submit a Notice of Intent form, with optional Occupational Ballot Designation and Statement of Qualifications, that will be mailed to all eligible members with further instructions.

To qualify, candidates must mail or hand deliver the completed Notice of Intent, with optional Occupational Ballot Designation and Statement of Qualifications, to the Office of the City Clerk – Election Division, Piper Technical Center, 555 Ramirez Street, Space 300, Los Angeles, CA 90012. The completed Notice of Intent must be received by mail or in person by the Office of the City Clerk – Election Division by 5:00 p.m. on August 10, 2017.  Candidates who wish to hand deliver their Notice of Intent may start on August 1, 2017, seven (7) business days preceding the above due date, and between the hours of 8:00 a.m. – 5:00 p.m. 

VOTING PROCESS – After the candidates are determined, eligible voters will receive a ballot in the mail.  Voters can begin submitting their ballots starting September 8, 2017.  All completed ballots must be received by mail or in-person, by the Office of the City Clerk – Election Division by 5:00 p.m. on September 19, 2017 to be counted.  The ballots will be tallied on September 21, 2017 in the presence of the observers designated by each candidate. 

QUESTIONS – Inquiries regarding the election process may be directed to the Office of the City Clerk at (213) 978-0440 or the Administrative Services Section of the Department of Fire and Police Pensions at (213) 279-3080.