A Message from the Board of Fire and Police Pension Commissioners
We have heard from Members who are concerned regarding the financial strength of the LAFPP fund in light of the COVID-19 pandemic and the resulting downturn in the stock market that has harmed other pension systems throughout the country. Although the LAFPP fund has been affected by the recent market fluctuations, your fund remains strong with over $23 billion in assets as of June 19, 2020. Due to the prudent stewardship of this Board and the expertise of our investment staff and advisors, we were in a good financial position prior to the recent market downturn and therefore in a strong position to weather this storm. The fund has plenty of cash on hand to meet pension and DROP payment obligations in this volatile market. We will continue to evaluate and monitor our long-term investment strategies to ensure the health and sustainability of your fund.
We have also heard from Members asking whether the calls across the nation to “defund the police” could potentially affect the LAFPP fund or the benefits you have earned. The answer is no. With regard to local proposals to modify LAPD’s budget, these proposals focus on the budget for the ongoing operations and services provided by LAPD and its dedicated employees. If any budget reduction proposal for LAPD were to be adopted by the Mayor and City Council, it would not impact the substance of your LAFPP pension benefits, or the general obligation of the City under the Charter to contribute annually to the LAFPP in the amount determined by an independent actuary hired by this Board.
Your vested pension benefits, the City’s obligation to actuarially fund those benefits, and the independent authority of this Board to protect and invest the trust funds that will be used to pay those benefits, are protected by the California Constitution and the City Charter.
We trust that this message provides you with confidence that from a financial and legal perspective, your LAFPP benefits and the LAFPP fund you rely on to pay for those benefits remain safe and secure under the independent leadership of this Board. Thank you for your continued dedication and service to the residents of Los Angeles.
For any questions or concerns, please contact us at (213) 279-3000, (844) 88-LAFPP, or at Pensions@lafpp.com.