Category: Newsroom

LAFPP recently selected seven new emerging managers in the fixed income, large cap, small cap and micro cap asset classes, based on multiple searches initiated over the past year. Approximately $225 million in total is being allocated to the seven new managers. The selected firms include: GIA Partners and Semper Capital Management for fixed income; Channing Capital Management and PHOCAS Financial for small cap equities; Granite Investment Partners for micro cap equities; and Oakbrook Investments and Redwood Investments for large cap domestic equities. Each of the firms was allocated $25 million with the exception of Channing Capital Management and PHOCAS Financial who were allocated $50 million each. Approximately $100 million of the allocation was shifted from an existing fund of funds manager to fund the new managers.

This recent $225 million allocation reinforces LAFPP’s commitment to its long-standing Emerging Manager Program. Currently, LAFPP has over $1.9 billion invested with emerging and diverse investment firms across all asset classes. As a percent of assets under management (AUM), the Fund has one of the highest percentages of any pension fund across the nation.

Although not widely known, Los Angeles Fire and Police Pensions (LAFPP) has been a leader in this area since the late 1980s. LAFPP began hiring and engaging emerging and diverse managers in 1987 and over the many years, various managers have been hired to manage equities, fixed income, real estate and private equity. LAFPP has also employed diverse consultants who have provided different services to the Fund over these many years.  

LAFPP’s Emerging Manager Program consists of hiring direct managers and fund of funds managers in the stock and bond portfolio. Altogether, the Fund has over $1.5 billion invested with diverse stock and bond managers. Many of the emerging managers in the Program started with smaller accounts (AUM), but their AUMs for the Fund have grown larger as they have been successful in growing the Fund’s investments.

The Fund has committed or funded over $390 million to diverse private equity and real estate managers. The Fund created a Specialized Manager Program to  invest in newer private equity funds.  

ELECTION RESULTS

The term of the Board’s Police Department Active Employee Member, Commissioner Robert von Voigt, ends on June 30, 2015.  An election was held on April 28, 2015 for this position. A candidate needs a majority of all votes cast in order to win the election. Commissioner von Voigt received 96.67% of the vote and will serve the term of office from July 1, 2015 until June 30, 2020.

Congratulations Commissioner von Voigt!

The Board normally meets on the first and third Thursdays of the month at 8:30 a.m. at the Los Angeles City Employees’ Retirement System (LACERS) facility located at the Los Angeles Times Building, 202 W. First Street, Suite 500, Los Angeles, CA 90012.  Most meetings, including special and committee meetings, are from one to four hours in duration.

For a current list of Commissioners, please view the Board Directory.  If you have questions concerning the election results, please call Wendy Kamayatsu, Administrative Services Section, at (213) 978-4434, or (800) 787-2489, ext. 84434#.

The term of the Board’s Fire Department Retired Employee Member, Commissioner Sam Diannitto, ends on June 30, 2015.  An election was held on March 31, 2015 for this position. A candidate needs the majority of all votes cast (i.e. at least 50% plus one of the votes returned) in order to win the election. Commissioner Diannitto received 91.38% of the vote and will serve the term of office from July 1, 2015 until June 30, 2020.

Congratulations Commissioner Diannitto!

The Board normally meets on the first and third Thursdays of the month at 8:30 a.m. at the Los Angeles City Employees’ Retirement System (LACERS) facility located at the Los Angeles Times Building, 202 W. First Street, Suite 500, Los Angeles, CA  90012. Most meetings, including special and committee meetings, are from one to four hours in duration.

For a current list of Commissioners, please view the Board Directory.  If you have questions concerning the election results, please call Wendy Kamayatsu, Administrative Services Section, at (213) 978-4434 or (800) 787-2489, ext. 84434#.

Now available to Tier 6 Members! Active members in Tiers 2 – 6 can now log in to MyLAFPP to view and/or print their 2014 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. 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, 2014.

For questions concerning your statement, contact the Active Member Services Section at (213) 978-4522.

The Cost of Living Adjustment (COLA) effective July 1, 2015 is +0.1%

Update as of 4/2/2015

The Cost of Living Adjustment (COLA) effective July 1, 2015 is +0.1% and all eligible pensions will be adjusted accordingly beginning with the pension payment dated July 31, 2015.

The 2015 COLA of 0.1% was presented and approved by the LAFPP Board at its regular meeting on April 2, 2015. The COLA will be effective July 1, 2015, and eligible pensioners and DROP participants will receive an increase of up to 0.1% beginning with their July 31, 2015 monthly pension payment.

COLAs are made to eligible pension benefits effective July 1 of every year. Pursuant to the City Charter and the Administrative Code, the COLA is based on the annual change in the Consumer Price Index (CPI) as published by the Bureau of Labor Statistics. Specifically, we look at the change in the CPI for All Urban Consumers in the Los Angeles-Riverside-Orange County Area for the prior 12-month period ending February.  As of February 2015, the change in the CPI is +0.1%.

How does this affect LAFPP Pensioners?

COLAs can increase or decrease one’s pension benefit, or have no effect. For example, in 2009 the 12-month CPI change yielded a flat COLA (0.00%) for pensioners for the first time in LAFPP history. Also, please note that your monthly pension can never be reduced to less than your original pension amount as a result of a negative COLA.

For illustrative purposes, the following is an example of how an average monthly LAFPP pension benefit of $5,247 would be affected by a 0.1% COLA:

If 0.1% of $5,247 = $5.25

($5,247 x 0.001)

Then the monthly pension benefit would be increased to $5,252.25.

($5,247 + $5.25)

For more detailed information on the calculation of the CPI, please visit the Bureau of Labor Statistics website at http://www.bls.gov/cpi/cpinewest.htm.

As of June 30, 2014, the System’s assets grew to over $15.75 billion on a market basis, while serving over 25,600…

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.  

Anthem security breach Healthcare provider Anthem, Inc. announced on February 3, 2015, that they are investigating a major breach of their information systems. This breach may have resulted in the unauthorized access of current and former enrollee personal information, including member name, date of birth, Social Security number, member ID, address and email address. They do not believe that medical claims data was breached.   Certain Los Angeles Fire and Police Pensions (LAFPP) members are enrolled in group health plans provided by Anthem Blue Cross or plans that utilize Anthem’s provider network.

Anthem is working closely with federal law enforcement investigators as well as conducting an extensive investigation to determine which of its current and former members were included in the security breach.

Anthem has created a dedicated website (www.AnthemFacts.com) where members can access information, such as frequently asked questions and answers. They have also established a dedicated toll-free number that both current and former plan members can call if they have questions related to this incident. That number is: 1-877-263-7995.  On February 11, Anthem announced that all current and former Anthem customers (going back to 2004) will be offered free credit monitoring and identity protection services for two years. Anthem customers will be able to sign up for these services starting on Friday, February 13.  Instructions for signing up will be posted on the website www.AnthemFacts.com.

You may also call 1-877-263-7995 to sign up. LAFPP strongly encourages you to sign up for them.   Anthem will send offers of credit monitoring and identity protection services by mail only. They will NOT contact you regarding the cyber attack via e-mail or phone. Anthem has further advised its current and former members to be on alert for scam email campaigns or telephone calls designed to appear as if they are from Anthem and soliciting personal information. Anthem has stated that they are not issuing emails or calling members regarding the cyber-attack, nor are they asking for personal information (e.g. credit card numbers, social security numbers, etc.) via email or phone. In addition, if you receive a scam email in this regard, it is important that you do not click on links or attachments, provide information, or reply to the email.

Further information is available on the Los Angeles Firemen’s Relief Association (www.lafra.org) and Los Angeles Police Relief Association (www.lapra.org) websites.     

The 2015 Annual Report for Los Angeles Fire and Police Pensions is now available online!

As of June 30, 2015, the System’s assets totaled over $18.72 billion, while serving over 25,000 members, including 11,709 active members, 1,359 DROP members and 12,593 retired members and beneficiaries. The System’s pension benefits are actuarially funded at 91.5 percent and health subsidy benefits are funded at 45.4 percent. The combined funding status is now 85 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.

The System is focused on achieving a 7.5 percent return over the long-term with the understanding that there are market fluctuations from year-to-year. The investment rate of return for Fiscal Year 2014-15 was 4.15 percent, less than our actuarial assumed rate of 7.5 percent.  However, over both the 3- and 5-year periods the System’s average return was 11.53%.  The System continues to work with our consultants to manage market volatility by investing in a variety of asset classes.

Our accomplishments throughout the past Fiscal Year include securing a new Headquarters Facility. We will be open for business in our new headquarters on March 21, 2016. In addition, the pension administration system replacement project is well underway.  We look forward to increasing our operational efficiency and the additional functionality we can provide to members.  All of these 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.

Based on the recent actuarial report completed by the System’s actuary, the pension benefit funded ratio has increased from 86.6% to 91.5%. The combined funded ratio for pension and health benefits is 85%, up from 80.8% the previous year. This marks the second consecutive year that the combined funded ratio has increased for the System.

Every year a valuation of the LAFPP fund is performed by an actuary.  The valuation reports the System’s assets and liabilities and establishes the City’s contribution to the fund for each fiscal year.  The positive outcome for the year ending June 30, 2015 was the result of approximately $861 million in net actuarial gains for the year. The City’s combined contribution rate for July 15, 2016 will decrease by 1.97% of sworn payroll, from 46.51% to 44.54%. This contribution rate decrease is due to lower than expected COLA increases for retirees, beneficiaries and DROP members, lower than expected salary increases for active members, and a higher than expected rate of return on the valuation value of assets (after smoothing). The overall unfunded liabilities have decreased from $4.0 billion to $3.2 billion.

On a market value basis, the combined funded ratio is 88%, with retirement benefits funded at 94.6% and health subsidy benefits at 46.9%.

For additional information, please click here to view the actuarial report and presentation.

Each October the United States Congress adopts a resolution to help raise public awareness about the importance of preparing for a secure retirement. This annual event provides an opportunity for our active and retired members to reflect on how they can create and maintain retirement security. Please click on the link below for a letter from Mayor Eric Garcetti.

Take a Trip Through Time with the City of Los Angeles Deferred Compensation Plan! Click on the below link for video:

https://www.youtube.com/watch?v=neD5-tEmYsw