Official Statement Airport Commission City and County of San ...

Voter Approved Changes to the Retirement Plan. The City’s retirement benefits are established under the
Charter and approved directly by the voters, rather than through the regular collective bargaining process; most
changes to retirement benefits require a voter-approved Charter amendment. On June 3, 2008, the voters of San
Francisco approved Proposition B, which increases the service required for City employees hired after January 10,
2009 to qualify for employer-funded retiree health benefits, establishes a separate Retiree Health Care Trust Fund to
fund retiree health costs, and increases retirement benefits and retirement cost-of-living adjustments for
“miscellaneous” employees. The cost of Proposition B is incorporated in the actuarial valuation as of July 1, 2008.
The voters of San Francisco have recently approved two other retirement plan amendments:
• The enactment of a Deferred Retirement Option Plan available to certain police members effective
July 1, 2008, authorized by the February 2008 election by initiative proposition; and
• A limited cost transfer of 33 Airport police officers’ historical service from CalPERS to SFERS
effective July 1, 2009, authorized by the voters of the November 2007 election.
Recent Funding Performance. From Fiscal Year 1996-97 through Fiscal Year 2003-04, the City’s
contribution to the Retirement System decreased to zero due to lowered funding requirements as determined by the
consulting actuary of the Retirement System and adopted by the Retirement Board. The zero percent employer
funding requirements for this period were due primarily to higher-than-projected investment earnings and lowerthan-projected
wage increases. Beginning in Fiscal Year 2004-05, the Retirement Board reinstated required
employer contributions based on the funding requirements as determined by the consulting actuary in the manner
described above in “–Funding Practices.” In Fiscal Year 2008-09, total employer contributions to the Retirement
System were $119.75 million which was 4.99% of that portion of a member’s Pensionable Salary.
The table on the next page summarizes Retirement System actual contributions for Fiscal Years 2004-05
through 2008-09. The column “Market Value of Assets” reflects the fair market value of assets held in trust for
payment of pension benefits; the column “Actuarial Value of Assets” refers to the value of assets held in trust
adjusted according to the Retirement System’s actuarial methods as summarized above; the column “Pension
Benefit Obligation” reflects the accrued actuarial liability of the Retirement System; the column “Percent Funded”
column is determined by dividing the actuarial value of assets by the Pension Benefit Obligations; and the column
“Employer and Employee Contributions” reflects the total of mandated employee contributions and employer
Actuarial Retirement Contributions received by the Retirement System.
CITY AND COUNTY OF SAN FRANCISCO EMPLOYEES’ RETIREMENT SYSTEM
Fiscal Years 2004-05 through 2008-09
($ in thousands)
Actuarial Pension Employee and Employer
Fiscal Market Value Value Benefit Percent Employer Contribution
Year of Assets of Assets Obligation Funded Contribution† Rates
___________
†
2004-05 $13,135,263 $12,659,698 $11,765,737 108.0% $248,029 4.48%
2005-06 14,497,022 13,597,646 12,515,463 109.0 289,226 6.58
2006-07 16,952,044 14,929,287 13,541,388 110.0 308,348 6.24
2007-08 15,832,521 15,941,390 15,358,824 103.8 319,183 5.91
2008-09 11,866,729 16,004,730 16,498,649 97.0 312,715 4.99
† Employer Contribution rates for Fiscal Years 2009-10 and 2010-11 are 9.49% and 13.56%, respectively.
Sources: Retirement System audited financial statements and supplemental schedules June 30, 2009, 2008, 2007, 2006 and 2005 and Retirement
System Actuarial Valuation reports as of July 1, 2005, July 1, 2006, July 1, 2007, July 1, 2008 and July 1, 2009.
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