2022 Valuation Reports Approved
Based on the actuarial report for the period ending June 30, 2022, the combined funded ratio for pension and health benefits is 95.0%, up from 92.5% the previous year. This marks the fifth consecutive year that the combined funded ratio has increased for the System. The pension benefit funded ratio is now 98.0%, up from 96.8%, and the retiree health benefit funded ratio increased from 64.7% to 74.3%. The favorable results indicate that the Plan remains strong despite another volatile year marked by the continuing COVID-19 pandemic, high inflation, and financial market volatility.
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, 2023, will decrease by 1.26% of sworn payroll, from 41.67% to 40.41%. The contribution rate decrease is due to a higher than expected return on the valuation value of assets (after smoothing), lower than expected salary increases for active members, higher than expected employer contributions, and lower health plan premiums and subsidies than projected in the prior valuation. The overall unfunded liabilities have decreased from $2.1 billion to $1.5 billion.
The actuarial valuation reports can be found on the Financial Reports page of our website.