Category: Newsroom

Funded Status Increases to 86.6%

Posted on by planeteria

Los Angeles Fire & Police Pensions’ funded status increases to 86.6% As a result of the strong fiscal year investment return of 17.86% and other favorable plan experience, the funded status of Los Angeles Fire and Police Pensions (LAFPP) increased to 86.6% for pension benefits.  Additionally, the City’s combined contribution rate for pension and retiree health subsidies will decrease to 46.51% for Fiscal Year 2015-16, as compared to 47.94% for the current fiscal year.   The funded status and contribution rate are based on the results of the fund’s annual actuarial valuation performed by The Segal Company, which was presented to the Board of Fire & Police Pension Commissioners at its regular meeting on November 20, 2014. The overall funded status for both pension and health subsidy benefits will increase from 77.3% to 80.8% on an actuarial basis.  On a market basis, the Plan’s combined funded level will increase from 77.7% to 87.5%.   The improvement in the funded status was due in part to lower than expected cost-of-living increases for retirees, beneficiaries, and DROP members, as well as a greater than expected return on investments.  The valuation reflects the economic and demographic assumption changes adopted by the Board in July 2014, which included the lowering of the assumed investment rate of return to 7.5% for future liabilities.  Due to smoothing of investment gains and losses, the total unrecognized investment gain as of June 30, 2014 is $1.412 billion.  Unless offset by future investment losses or unfavorable plan experience, the $1.412 billion deferred gain will be recognized over the next several years and have a positive impact on the future funded ratio and employer contributions.    

Emerging and Diverse Manager Program

Posted on by planeteria

Emerging and diverse Manager Program 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.  

Currently, LAFPP has over $1.9 billion invested with 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.  

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. Currently, the Fund has invested approximately $300 million in fund of funds managers, but will be shifting $100 million to hire directly several large cap equity, small cap/micro cap equity and fixed income managers.  

The Fund has also committed or funded over $344 million to diverse private equity and real estate managers. The Fund created a Specialized Manager Program to attract and invest in newer private equity funds.  

Currently, the Fund is in the process of searching for several large cap, small-cap and bond fund emerging managers to manage part of a new $100 million allocation. The results of the searches will presented to the Board in the early part of 2015.      

Election Results – Police Department – Retired Board Member

Posted on by Oscar Diaz

LAFPP congratulates Garrett W. Zimmon, the Police Department Retired Member-elect, on his re-election to the Board of Fire and Police Pension Commissioners! Mr. Zimmon will be sworn in before the end of June 2024 to continue to fulfill his fiduciary responsibilities as a Board member beginning July 1, 2024.

Commissioner Zimmon’s term on the Board of Fire and Police Pension Commissioners (Board) as the Police Department Retired Member is set to expire on June 30, 2024. In accordance with Section 23.103.2(b) of the Los Angeles Administrative Code, the Board authorized the Office of the City Clerk to conduct an election on Friday, February 23, 2024. The candidate receiving a majority of all votes cast (at least 50% plus one vote) is then declared elected as the Police Department Retired Member of the Board.

Commissioner Zimmon received 91.87% of the vote, a majority, and as such is elected to serve the term of the Police Department Retired Member of the Board beginning July 1, 2024 through June 30, 2029. Congratulations Commissioner Zimmon!

For a current list of Commissioners, please view the Board Directory. If you have any questions concerning the election results, please contact LAFPP’s Administrative Services Section at (213) 279-3080.

2025 Health and Dental Subsidy Updates

Posted on by bernice.ortiz@lafpp.com

On December 5, 2024, the Board of Fire and Police Pension Commissioners approved new maximums for the Medicare health subsidy, the health subsidy for Qualified Surviving Spouses/Domestic Partners, as well as the dental subsidy. These new maximum amounts will be effective January 1, 2025 through December 31, 2025.

Medicare Health Subsidy Benefit

The maximum Medicare Health Subsidy increased to $581.56, effective January 1, 2025. The maximum Medicare Health Subsidy is set at the highest monthly premium of an approved plan supplemental to Part A of Medicare available to retired members of the Los Angeles City Employees’ Retirement System (LACERS), pursuant to the City of Los Angeles Administrative Code Section 4.1154(c).

A Medicare Health Subsidy is provided to eligible retired members or Qualified Surviving Spouses/Domestic Partners who are enrolled in both Medicare Parts A and B. The monthly subsidy that you may receive is based on the number of whole years of service at the time of retirement (or DROP entry) as shown in the chart below.  

Member’s Whole Years of ServiceMaximum Medicare Health Subsidy*
20 or moreThe lesser of: $581.56 or 100% of the single-party premium of the participant’s health plan.
15 – 19The lesser of: $523.40 or 90% of the single-party premium of the participant’s health plan.
10 – 14The lesser of: $436.17 or 75% of the single-party premium of the participant’s health plan.
Less than 10No subsidy; Tier 6 retirees see below.**
*For members who: (1) entered DROP or retired after July 14, 2011, and (2) did not opt-in during the designated period to make the additional 2% pension contributions, the Maximum Medicare Health Subsidy is equal to the July 1, 2011 amount of $480.41.  
** Tier 6 members who retire on a service-connected disability pension with less than 10 years of service may qualify for a minimum health subsidy at age 55 if they are not eligible for a subsidy from any other source.

Qualified Survivors Non-Medicare Health Subsidy Benefit

The non-Medicare health subsidy maximum for Qualified Surviving Spouses/Domestic Partners (Qualified Survivors) will increase from $1,051.78 to $1,117.28 per month, effective January 1, 2025.

If you currently receive a survivorship pension from LAFPP, you may also be eligible for a health subsidy if the following qualifications are met:  

  • You must be enrolled in a Board-approved health plan (one offered by Los Angeles Firemen’s Relief Association (LAFRA), Los Angeles Police Relief Association (LAPRA), UFLAC or Fire & Police Pensions) or participate in the Health Insurance Premium Reimbursement Program.
  • The sworn member had at least 10 years of service.
  • The sworn member received, or was eligible to receive, a health subsidy at the time of death; otherwise, you will be eligible when the sworn member would have been 55 years old.
  • The sworn member was a Tier 6 retiree with a service-connected disability.
  • If you receive a survivorship benefit pursuant to a purchase made by the retired member under the Survivor Benefit Purchase Program for Retirees, you are not eligible for a health subsidy. 

Retired Member Dental Subsidy Benefit

The maximum retiree dental subsidy will remain the same at $42.93 per month, effective January 1, 2025. Per City of Los Angeles Administrative Code Section 4.1164(b), the maximum dental subsidy for retirees shall be the lower of LACERS’ maximum dental subsidy or any amount allowed active members of any LAFPP Tier.

You are eligible for a dental subsidy if you are retired with at least 10 years of service, are at least 55 years old, and are enrolled in a Board-approved dental plan. If you retire with more than 25 years of service, your eligibility is capped at 100% of the maximum subsidy. If you retire with 10 to 24 years of service, your subsidy is calculated at 4% of the current maximum for each whole year of service.

Note: Qualified Survivors are not eligible to receive a dental subsidy from LAFPP but are allowed to enroll in a Board-approved dental plan.

Questions

If you would like more information about LAFPP’s Health and Dental Subsidy program eligibility requirements, please contact the Medical and Dental Benefits Section at (213) 279-3115. Information is also available in the Retired Members section of www.lafpp.lacity.gov.