HomeMy WebLinkAboutCity of Fresno Fire and Police Retirement System - Public Financial ReportCITY OF FRESNO FIRE AND POLICE RETIREMENT SYSTEM
A MESSAGE TO MEMBERS
This Popular Annual Financial Report (PAFR) summarizes the information contained in the Annual
Comprehensive Financial Report (ACFR) that provides financial information on the City of Fresno Fire
and Police Retirement System's (the System) activities. This PAFR is presented in conformity with
generally accepted accounting principles (GAAP). The more detailed ACFR is available on the
System's website at www.cfrs-ca.org or by clicking here.
RETIREMENT BOARD
Jonathan Lusk, Chair
John Jensen, Vice Chair
Lynn Bennink
Brad Driscoll
Donald Gross
TABLE OF CONTENTS
GFOA Award ...........................................................................1
Membership and Funded Status .............................................2
Total Net Position ....................................................................3
Fund Revenues .......................................................................4
Fund Expenses .......................................................................5
Investment Results, Actual and Target Allocations .................6
2828 Fresno Street, Suite 201 Fresno, CA 93721
p. (559) 621-7080 f. (559) 621-7081
www.cfrs-ca.org
Popular Annual Financial Report For Fiscal Years Ended June 30, 2021, and 2020 1
Membership and Funded Status
Membership Highlights
Total overall membership in the System increased by 0.57% to 2,300. The total number of active members
decreased by 1.00% to 1,085. Retired membership increased by 1.72% to 1,125. Inactive Vested
membership increased by 5.88% to 90.
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Total Members
Membership History
2,216
2,294
2,293
2,287
2,300
Active Members Retirees and Beneficiaries Inactive Vested Members
2017
2018
2019
2020
2021
0 250 500 750 1,000 1,250 1,500 1,750 2,000 2,250 2,500
Funded Status
The System’s funding objective is to meet long-term benefit obligations through contributions and investment
income. As of June 30, 2021, the date of the last actuarial valuation, the funded ratio for the System was
121.6 percent reflecting that the System has a valuation value of assets which is in excess of the actuarial
accrued liability. In general, this indicates that for every dollar of benefits due, we have approximately $1.22
of assets available for payment as of that date. As of June 30, 2020, the date of the previous annual
actuarial valuation, the funded ratio for the System was 116.3 percent; and as of June 30, 2019, the funded
ratio for the System was 117.0 percent.
Fiscal Year Ending June 30
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Historical Funded Status
119.8%120.3%117%116.3%
121.6%
2017 2018 2019 2020 202190%
100%
110%
120%
130%
Popular Annual Financial Report For Fiscal Years Ended June 30, 2021, and 2020 2
Total Net Position
Fiscal Year Ending June 30
$
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History of Total Net Position
(In Millions)
$1,510 $1,603 $1,648 $1,635
$2,090
2017 2018 2019 2020 20210
250
500
750
1,000
1,250
1,500
1,750
2,000
2,250
At June 30, 2021, the City of Fresno Fire and Police Retirement System had total assets of $2.231 billion,
less total liabilities of $140 million, for a total net position restricted for pension benefits of $2.090 billion
compared to $1.635 billion at June 30, 2020. “Net Position Restricted for Pension Benefits” represents
funds available to pay benefits. It is a point in time or a snapshot of account balances as of the fiscal year-
end (i.e., June 30). It indicates the assets available for future payments to retirees and any current liabilities.
Increases and decreases in Net Position Restricted for Pension Benefits, when analyzed over time, may
serve as an indicator of whether the System’s financial position is improving or deteriorating. Other factors,
such as market conditions, should also be considered in measuring the System’s overall health.
FY 2017 FY 2018 FY 2019 FY 2020 FY 2021
Current and Other Assets $ 126,535,268 $ 108,904,110 $ 147,619,240 $ 73,736,050 $ 162,080,979
Investments at Fair Value 1,510,940,012 1,600,674,190 1,614,051,932 1,633,470,664 2,068,561,597
Total Assets $ 1,637,475,280 $ 1,709,578,300 $ 1,761,671,172 $ 1,707,206,714 $ 2,230,642,576
Total Liabilities 127,932,492 106,992,706 113,871,570 71,906,901 140,272,453
Net Position Restricted for Pension Benefits $ 1,509,542,788 $ 1,602,585,594 $ 1,647,799,602 $ 1,635,299,813 $ 2,090,370,123
Popular Annual Financial Report For Fiscal Years Ended June 30, 2021, and 2020 3
Fund Revenues
Fund revenues for the fiscal year 2021 increased $471,774,150 or 834.39 percent over the prior year from
$56,541,372 to $528,315,522, which includes employee contributions of $10,256,470, employer
contributions of $26,314,815, a net investment income gain of $491,507,487 and net securities lending
income of $236,750.
The current year increase in fund revenues is primarily due to a strong performance in the global investment
markets.
Schedule and Graph of Fund Revenues By Source
For Fiscal Years Ended June 30, 2017 to 2021
2017 2018 2019 2020 2021
Employer Contributions $ 18,543,308 $ 19,696,957 $ 20,604,377 $ 22,324,019 $ 26,314,815
Employee Contributions 8,169,019 8,963,672 9,597,068 10,011,831 10,256,470
Investment Income 192,317,658 129,162,789 82,871,945 24,205,522 491,744,237
TOTAL $ 219,029,985 $ 157,823,418 $ 113,073,390 $ 56,541,372 $ 528,315,522
Fiscal Year Ending June 30
Employer Contributions
Employee Contributions
Investment Income
2017 2018 2019 2020 2021
$0
$50,000,000
$100,000,000
$150,000,000
$200,000,000
$250,000,000
$300,000,000
$350,000,000
$400,000,000
$450,000,000
$500,000,000
$550,000,000
Popular Annual Financial Report For Fiscal Years Ended June 30, 2021, and 2020 4
Fund Expenses
Fund Expenses for the fiscal year 2021 increased $4,204,051 or 6.09 percent over the prior fiscal year from
$69,041,161 to $73,245,212, which includes benefit payments of $68,027,466, Post Retirement
Supplemental Benefit payments of $1,680,059, refunds of contributions of $1,255,390 and administrative
expenses of $2,282,297.
The current year increase in expenses is due primarily to the increases in retirees and the respective
retirement benefits paid in fiscal year 2021.
Schedule and Graph of Fund Expenses By Type
For Fiscal Years Ended June 30, 2017 to 2021
2017 2018 2019 2020 2021
Benefit Payments $ 57,028,861 $ 60,491,661 $ 62,990,700 $ 65,019,584 $ 68,027,466
PRSB 1,719,441 2,019,167 2,122,442 1,964,344 1,680,059
Refunds of Contributions 524,636 560,170 848,993 217,962 1,255,390
Administrative Expenses 1,502,899 1,709,614 1,897,247 1,839,271 2,282,297
TOTAL $ 60,775,837 $ 64,780,612 $ 67,859,382 $ 69,041,161 $ 73,245,212
Fiscal Year Ending June 30
Benefit Payments Post Retirement Supplemental Benefit (PRSB)
Refunds of Contributions Administrative Expenses
2017 2018 2019 2020 2021
$0
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
$70,000,000
$80,000,000
Popular Annual Financial Report For Fiscal Years Ended June 30, 2021, and 2020 5
Investment Results, Actual and Target Allocations
The System generated a total investment gain of 30.81 percent, gross of fees, as reported by the System's
custodian, Northern Trust, for the fiscal year ended June 30, 2021. The fiscal year return was 23.81 percent
more than the System’s actuarial interest rate assumption of 7.00 percent, while outperforming its policy-
weighted benchmark of 27.22 percent by 3.59 percent, and also outperforming its actual weighted
benchmark of 29.15 percent by 1.66 percent. The System’s ten-year annualized returns averaged 9.33
percent, outperforming its policy benchmarks return of 8.62 percent for the period by 0.71 percent.
The System remains highly funded and well positioned to serve our members and retirees. As illustrated by
the System’s 10, 15 and 25-year long-term gross of fees returns of 9.33 percent, 7.76 percent and 8.37
percent, respectively, as of June 30, 2021, the System has the ability to achieve its long-term objectives over
extended periods. After paying all benefits and expenses of the System, the year-end value of the System
reached $2.090 billion. Additional information regarding the framework for investing System's assets can be
found in the Investment Policy Statement, which is available on System's website at www.cfrs-ca.org or by
clicking here.
Highlighted below is the Investment Performance of the System’s Investment Portfolio gross of fees
provided by its custodian for Fiscal Year 2021:
FY 2021
Domestic Equity 46.89%
International Equity 38.24%
Fixed Income 7.57%
Real Estate 9.83%
Alternatives 27.94%
Total Fund 30.81%
Fiscal Year Ending June 30
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City of Fresno Retirement Systems
Fiscal Year Total Fund and Policy Benchmark Returns
14.74%
8.87%
5.60%
1.62%
30.81%
13.74%
8.34%5.86%
0.66%
27.22%
Fresno Total Fund (Gross of Fees)Policy Benchmark
2017 2018 2019 2020 2021
-5%
0%
5%
10%
15%
20%
25%
30%
35%
Popular Annual Financial Report For Fiscal Years Ended June 30, 2021, and 2020 6
Investment Results, Actual and Target Allocations Continued
Target and Actual Asset Allocation
As of June 30, 2021
Asset Class FY 2021 Allocation Range
Domestic Equities
Large-Cap 21.3%10.0% - 26.0%
Small-Cap 8.4%2.0% - 12.0%
International Equities
Developed Markets 18.7%14.0% - 24.0%
Emerging Markets 10.1%3.0% - 9.0%
Fixed Income
Core Fixed Income 8.9%7.0% - 15.0%
High Yield Bonds 4.9%4.0% - 12.0%
Real Estate
Core Real Estate 8.2%7.0% - 15.0%
Value Add Real Estate/REITs 3.4%2.0% - 6.0%
Alternatives
Infrastructure 3.5%2.0% - 6.0%
Midstream Energy (MLP's)5.0%2.0% - 8.0%
Private Equity 2.4%0.0% - 10.0%
Private Debt 5.2%4.0% - 12.0%
Short-Term Investments 0.0%0.0%
100%
Actual Asset Allocation
As of June 30, 2021
Domestic Large Cap
Equities: 21.3%
Domestic Small Cap
Equities: 8.4%
International
Developed Market
Equities: 18.7%
International
Emerging Market
Equities: 10.1%
Core Fixed Income: 8.9%
High Yield Bonds: 4.9%
Core Real Estate: 8.2%
Value Add Real
Estate/REITs: 3.4%
Infrastructure: 3.5%
MLPs: 5.0%Private Equity: 2.4%
Private Debt: 5.2%
Popular Annual Financial Report For Fiscal Years Ended June 30, 2021, and 2020 7