ADDITIONS AND DEDUCTION TO PLAN NET ASSETS
The primary sources which finance the retirement benefits LACERA provides are investment income and the collection of member (employee) and employer retirement contributions. For fiscal year 2008, Total Additions amounted to a decline of $221 million, primarily due to negative investment performance with a total fund loss of 1.5 percent, net of fees, for the fiscal year.
The primary uses of LACERA's assets include the payment of benefits to members and their beneficiaries, the refund of contributions to terminated employees, and the cost of administering the Plan. These deductions for fiscal year 2008 totaled $1.96 billion.
No pension assets were transferred to the Other Post-Employment Benefit (OPEB) Agency Fund in fiscal year 2008. All activities were accounted for directly in the OPEB Agency Fund.
The Boards of Retirement and Investments jointly approve the annual budget, which controls administrative expenses and represents approximately 0.12 percent of total Plan assets.
As of June 30, 2008, Net Assets Held in Trust for Pension Benefits totaled $38.7 billion, a decrease of $2.18 billion, or 5.3 percent from the prior year.
Additions and Deductions to Pension Plan Net Assets
For the Fiscal Years ended June 30, 2008 and 2007:
(Dollars in millions) |
| |
2 0 0 8 |
2 0 0 7 |
| Net Investment Income/(Loss) |
$ (1,426) |
|
$6,487 |
|
| Contributions and Miscellaneous Income |
1,205 |
|
1,101 |
|
| |
Total Additions/(Declines) |
(221) |
|
7,588 |
|
Benefit Payments and Refunds
|
(1,914) |
|
(1,793) |
|
| Administrative and Miscellaneous Expense |
(48) |
|
(44) |
|
| |
Total Deductions |
(1,962) |
|
(1,837) |
|
| Transfer to OPEB Agency Fund |
|
|
(29) |
|
| Net Increase/(Decrease) During the Year |
(2,183) |
|
5,722 |
|
| Pension Plan Assets at Beginning of Year |
40,908 |
|
35,186 |
|
| Pension Plan Assets at End of Year |
$ 38,725 |
|
$40,908 |
|
STAR COLA PROGRAM
The Board of Retirement (BOR), together with the Board of Investments (BOI), has unanimously supported the Supplemental Targeted Adjustment for Retirees (STAR) Program, a supplemental cost-of-living benefit for retirees or their survivors who have lost 20 percent or more of the purchasing power of their original retirement benefit.
Except for Program Year 2005, the BOR made permanent the 2001 through 2008 STAR Programs at an 80 percent level as authorized in the California Government Code Section 31874.3. There were no new retirees or beneficiaries entitled to additional STAR benefits for Program Year 2005 due to the modest Consumer Price Index (CPI) percentage increase and all eligible members had cost-of-living accumulation accounts below the 20 percent threshold for providing STAR benefits. Permanent STAR benefits become part of the member's retirement allowance and are payable for life.
The STAR Program benefit cost for calendar year 2007 was $30.6 million, and is anticipated to be similar for calendar year 2008. Currently, about 8,000 retirees receive this benefit.
