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