|
|
|
| |
LACERA - Investments Home > Annual Report 2009 > PAFR 2009 > Investments |
|
| |
|
| |
|
INVESTMENTS
LACERA’s investment program objective is to provide LACERA participants with retirement benefits, as required by the County Employees Retirement Law of 1937. The BOI has exclusive control of all
retirement system investments. There are a total of nine BOI members: two are elected by active members and two by retired members, and four are appointed by the Los Angeles County Board of Supervisors. The County Treasurer and Tax Collector serves as an ex-officio member.
The BOI has adopted an Investment Policy Statement, which provides a framework for the management of LACERA’s investments. This Statement establishes LACERA’s investment policies and objectives and defines the principal duties of the BOI, investment staff, investment managers, master custodian, and consultants.
A pension fund’s strategic asset allocation policy is generally recognized to have the most impact on a fund’s investment performance. The BOI implements the asset allocation plan by hiring investment managers to invest assets on LACERA’s behalf, subject to investment guidelines incorporated into each firm’s investment management contract.
This fiscal year witnessed a financial crisis that was dramatic and widespread. LACERA was not immune and realized a second year of negative investment returns. The total fund returned a negative 18.3 percent (net of fees) for this fiscal year. However, LACERA’s five-year and seven-year annualized returns are still a positive 3.6 percent and 5.2 percent respectively (net of fees).
 |
|
FUNDING STATUS
In order to determine whether Pension Plan Net Assets will be sufficient to meet future obligations, the actuarial funding status needs to be calculated. An actuarial valuation is similar to an inventory process. On the valuation date, the assets available for the payment of retirement benefits are appraised. These assets are compared with the actuarialliabilities, which are the actuarial present value of all future benefits expected to be paid for each member. The purpose of the valuation is to
determine what future contributions by the members and by the County of Los Angeles are needed to pay all expected future benefits.
LACERA’s independent actuary, Milliman, Inc., performed an actuarial valuation as of June 30, 2008 and determined the funded ratio of the actuarial assets to the actuarial accrued liability is 94.5 percent. LACERA’s investment returns were significantly less than the assumed rate of 7.75 percent. These investment losses for 2008 were offset by deferred gains from 2006 and 2007 resulting in a relatively small net gain on actuarial assets. Additional investment losses that occurred in the second half of 2008, but are not included in the 2008 actuarial valuation, are likely to have a significant effect on future actuarial valuations. It is the actuary’s opinion that LACERA continues in sound financial condition as of the June 30, 2008 actuarial valuation.
Valuation Date: June 30, 2004 Funded Ratio: 82.8%
Valuation Date: June 30, 2005 Funded Ratio: 85.8%
Valuation Date: June 30, 2006 Funded Ratio: 90.5%
Valuation Date: June 30, 2007 Funded Ratio: 93.8%
Valuation Date: June 30, 2008 Funded Ratio: 94.5% |
|
| LACERA Membership |
| The following is a summary of LACERA's membership as of June 30, 2009: |
| |
2009 |
2008 |
2007 |
2006 |
2005 |
| Service Retirement |
36,437 |
|
35,868 |
|
34,965 |
|
34,594 |
|
33,721 |
|
| Disability Retirement |
8,996 |
|
9,018 |
|
9,045 |
|
9,064 |
|
8,995 |
|
| Survivors |
7,636 |
|
7,464 |
|
7,382 |
|
7,200 |
|
7,1,37 |
|
| Total Retired Members |
53,069 |
|
52,350 |
|
51,392 |
|
50,858 |
|
49,853 |
|
| Active Members |
95,788 |
|
94,492 |
|
92,096 |
|
88,631 |
|
86,384 |
|
| Inactive (Deferred) Members |
8,051 |
|
11,834 |
|
7,911 |
|
7,459 |
|
6,980 |
|
| Total Membership |
156,908 |
|
158,676 |
|
151,399 |
|
146,948 |
|
143,217 |
|
Click here to access the 2009 PAFR |
|
|
12/9/09
|
|
|
