2021 Valuation Reports Approved
Good news! Based on the actuarial report for the period ending June 30, 2021, the combined funded ratio for pension and health benefits is 92.5%, up from 88.6% the previous year. This marks the fourth consecutive year that the combined funded ratio has increased for the System. The pension benefit funded ratio is now 96.8%, up from 93.2%, and the retiree health benefit funded ratio increased from 59.7% to 64.7%. The favorable results indicate that the Plan remains strong despite another volatile year marked by the continuing COVID-19 pandemic.
Every year a valuation of the LAFPP fund is performed by the Board’s actuary. The valuation reviews the System’s assets and liabilities and establishes the City’s (including the Harbor and Airport Departments) contribution to the fund for each fiscal year. The City’s combined contribution rate for July 15, 2022 will decrease by 4.08% of sworn payroll, from 45.75% to 41.67%. The contribution rate decrease is due to a higher than expected return on the valuation value of assets (after smoothing), lower than expected COLA increases for retirees and beneficiaries, the net loss layer from the June 30, 2006 valuation being fully amortized, and other experience gains. The overall unfunded liabilities have decreased from $3.1 billion to $2.1 billion.
The approved 2021 actuarial reports can be found on the Financial Reports page of our website.