HomeMy WebLinkAboutSan Jose Police and Fire Department Retirement Plan - Public Financial Report1
PENSION TRUST &
POSTEMPLOYMENT
HEALTHCARE TRUST
FUNDS OF THE CITY
OF SAN JOSÉ,
CALIFORNIA
POPULAR ANNUAL
FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
CITY OF SAN JOSÉ
POLICE AND FIRE DEPARTMENT
RETIREMENT PLAN
2
Government Finance Officers Association of the United States
and Canada (GFOA) has given an award for Outstanding
Achievement in Popular Annual Financial Reporting to the Plan
for its Popular Annual Financial Report for the fiscal year ended
June 30, 2020. The Award for Outstanding Achievement in
Popular Annual Financial Reporting is a prestigious national
award recognizing conformance with the highest standards for
preparation of state and local government popular reports.
In order to receive an Award for Outstanding Achievement in
Popular Annual Financial Reporting, a government unit must
publish a Popular Annual Financial Report, whose contents
conform to program standards of creativity, presentation,
understandability, and reader appeal. An Award for
Outstanding Achievement in Popular Annual Financial
Reporting is valid for a period of one year only. The Plan has
received this award for the fifth year for the fiscal year ended
June 30, 2020. We believe our current report continues to
conform to the Popular Annual Financial Reporting
requirements, and we are submitting it to GFOA to determine
its eligibility for another Award.
3 The Board
4 Financial Results
5 Membership & Funding
6 Investments
7 Growth of $10,000
TABLE OF CONTENTS
https://www.sjretirement.com/ City of San José Office of Retirement Services 1737 North First Street, Suite 600 San José, CA 95112-4505 Phone: 408 794-1000 or 800-732-6477 Fax: 408 392-6732
3
Roberto Peña,
Director
Chief Executive
Officer
BOARD OF
ADMINISTRATION
Andrew Lanza Andrew Gardainer Chair Vice Chair
Vincent Sunzeri Nick Muyo Trustee Trustee
Howard Lee Richard Santos Trustee Trustee
The Police and Fire Department Retirement Plan
(Plan) is pleased to present the Popular Annual
Financial Report (PAFR) which summarizes the Annual
Comprehensive Financial Report (ACFR) for the fiscal
year ended June 30, 2021. The financial data
presented in the PAFR is derived from the ACFR and
is consistent with Accounting Principles Generally
Accepted in the United States of America (U.S. GAAP).
The PAFR provides a concise summary of the Plan's
financial position, investment performance and key
accomplishments throughout the fiscal year. The Plan
consists of a single employer Defined Benefit Pension
Plan and a Postemployment Healthcare Plan.
This report is not intended to replace the ACFR, which
provides a more complete overview of the Plan’s
financial position and operating results. For more in-
depth information, we encourage you to read the
Annual Report by visiting:
https://www.sjretirement.com/investments-and-
reports/investments-and-reports-police-and-
fire/financial/
Eswar Menon Sunita Ganapati Trustee Trustee
Vacant Pam Foley Trustee City Council Liaison
4
In Thousands
As of June 30, 2021 2020 2019 2021 2020 2019
Receivables 83,889 127,537 46,864 7,015 9,450 4,775
Investments at fair value 4,668,833 3,587,886 3,544,827 271,009 201,764 182,307
Other assets, net 3,871 3,494 3,031 54 51 46
Total Assets 4,756,593$ 3,718,917$ 3,594,722$ 278,078$ 211,265$ 187,128$
Current liabilities 29,954 16,897 6,300 1,764 2,733 1,171
Total Liabilities 29,954$ 16,897$ 6,300$ 1,764$ 2,733$ 1,171$
Plan Net Position 4,726,639$ 3,702,020$ 3,588,422$ 276,314$ 208,532$ 185,957$
In Thousands
For the Period Ended June 30,2021 2020 2019 2021 2020 2019
Employee contributions 29,033 27,645 24,811 12,475 13,135 13,315
Employer contributions 201,370 188,481 176,618 28,397 27,350 28,744
Net investment income 1,044,290 134,085 114,179 52,994 7,243 7,907
Total Additions 1,274,693$ 350,211$ 315,608$ 93,866$ 47,728$ 49,966$
Retirement benefits 228,491 216,206 204,652
Death benefits 15,152 14,238 13,162
Refund of contributions 667 564 194
Administrative expenses 5,764 5,605 5,369 110 122 126
Healthcare insurance premiums 25,974 25,031 26,403
Total Deductions 250,074$ 236,613$ 223,377$ 26,084$ 25,153$ 26,529$
Net Increase in Plan
Net Position 1,024,619 113,598 92,231 67,782 22,575 23,437
Beginning Net Position 3,702,020$ 3,588,422$ 3,496,191$ 208,532$ 185,957$ 162,520$
Ending Net Position 4,726,639$ 3,702,020$ 3,588,422$ 276,314$ 208,532$ 185,957$
Postemployment Healthcare Plans
Changes in
Plan Net Position for the
Defined Benefit Plan
Net Position for the
Defined Benefit Plan
Net Position for the
Postemployment Healthcare Plans
Changes in
Plan Net Position for the
$3,443
$3,658 $3,774 $3,911 $4,727
2,500
3,000
3,500
4,000
4,500
5,000
5,500
2017 2018 2019 2020 2021
Total Net Position
In Millions
Pension Healthcare
Net Position
This amount represents the total assets available
for benefit payments for current and future
retirees
5
Years of Average
Credited Monthly
Service Benefit
0 - 5 6,306$ -$
6 - 10 6,157$ 2,308$
11 - 15 7,619$ 1,909$
16 - 20 9,229$ 3,822$
21 - 25 9,876$ 5,758$
26 - 30 9,979$ 8,422$
31+9,054$ 9,522$
Average
Monthly Final
Average Salary
Total Total
Tier 1 Tier 2 Tier 1 Tier 2 Tier 1 Tier 2 Tier 1 Tier 2 Tier 1 Tier 2 Tier 1 Tier 2
1,540 185 105 554 527 2,911 1,484 192 98 620 427 2,821
Total Total
Tier 1 Tier 2 Tier 1 Tier 2 Tier 1 Tier 2 Tier 1 Tier 2 Tier 1 Tier 2 Tier 1 Tier 2
903 36 6 499 158 1,602 896 38 7 524 138 1,603
Fire
Retirees Deferred Active
Fire
Retirees Deferred Active
Membership
As of June 30, 2020
Police
Retirees Deferred ActiveRetireesDeferred Active
Membership
As of June 30, 2021
Police
75
.
8
%
77
.
1
%
76
.
6
%
74
.
3
%
73
.
6
%
$-
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
2016 2017 2018 2019 2020
Schedule of Funding Progress, Pension
in Millions
Actuarial Valuation of Assets Unfunded Actuarial Liability
The Funding progress ratio is the ratio of the actuarial value of assets
available to pay retirement benefits divided by the present value of
anticipated future retirement benefit payments. The ratio of funding
progress is not yet finalized for the actuarial valuation year 2021
The Average Benefit Payment chart is a broad representation of
average benefits paid to retirees and survivors. All tiers are
combined in the calculation. The chart includes all members who
have retired through June 30, 2021.
Actuarial
Valuation
Year
6
Public Equity, 46%Investment Grade
Bonds, 12%
Private Equity, 6%
Core Real Estate, 5%
Immunized Cash Flows,
5%
Venture / Growth Capital, 4%
Emerging Market Bonds,3%
Growth Real Estate
3%
Long Term Government Bonds,
3%
Market Neutral Strategies), 3%
Private Debt, 3%
Private Real Assets, 3%
High Yield Bonds2%
Treasury Inflation-Protected Securities2%
PENSION -TARGET ASSET ALLOCATION
AS OF JUNE 30, 2021
$255,172
$(30,889)
$305,187
$(35,146)
$417,573
$(29,205)
$240,546
$122,086 $141,328
$1,097,284
$(100,000)
$-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
$800,000
$900,000
$1,000,000
$1,100,000
$1,200,000
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Investment Income, Net
In Thousands
Pension Healthcare
The Assets are
structured to
provide
growth from
capital gains
and income,
while
maintaining
sufficient
liquidity to
meet
beneficiary
payments.
BENCHMARK INDICES Growth:
Public Equity Benchmark
San José Custom Private Equity
Benchmark
S&P Global Leveraged Loan + 2%
NCREIF ODCE Equal-Weighted
BBgBarc US Corporate High Yield
TR
50% JPM EMBI GD/50% JPM
GBI-EM
Low Beta:
Immunized Cash Flow
Benchmark
Market Neutral Strategies
ICE BofA 91 Days T-Bills TR
Other:
Core Real Estate Benchmark
BBgBarc US Treasury TIPS 0-5 YR
TR
Custom IG Bonds Benchmark
Long-Term Government Bonds
Benchmark
-2.0%
8.0%
18.0%
28.0%
2017 2018 2019 2020 2021
9.7%6.9%4.3%3.1%
26.3%
9.5%7.6%4.4%2.9%
25.2%
Investment Returns Compared to Benchmark
Investment Returns, net Benchmark Returns
7
0
20,000
40,000
60,000
80,000
100,000
120,000
June 1991 June 1996 June 2001 June 2006 June 2011 June 2016 June 2021
Growth of $10,000, 30 Years
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
June 2001 June 2005 June 2009 June 2013 June 2017 June 2021
Growth of $10,000, 20 Years
0
5,000
10,000
15,000
20,000
25,000
June 2011 June 2013 June 2015 June 2017 June 2019 June 2021
Growth of $10,000, 10 Years
GROWTH OF $10,000 IN THE LONG-
TERM
These are graphic trends to show how much an initial investment of
$10,000 would be worth in the Retirement Plan’s pension portfolio after
10, 20, and 30 years.