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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The employer contribution rate for Fiscal Year 2009-10 is 9.49% <strong>of</strong> Pensionable Salary. The <strong>Airport</strong> is<br />
required to contribute at an actuarially determined rate. As <strong>of</strong> July 1, 2009, the date <strong>of</strong> the last actuarial valuation,<br />
the funded ratio for the plan was 97.0%. The <strong>Airport</strong>’s required contributions for the last five Fiscal Years are set<br />
forth below.<br />
AIRPORT CONTRIBUTIONS TO THE RETIREMENT SYSTEM<br />
Fiscal Year<br />
2004-05<br />
2005-06<br />
2006-07<br />
2007-08<br />
2008-09<br />
Contribution Rate<br />
4.48%<br />
6.58<br />
6.24<br />
5.91<br />
4.99<br />
<strong>Airport</strong> Contribution<br />
$3.6 million<br />
7.4 million<br />
9.1 million<br />
9.1 million<br />
8.8 million<br />
__________________<br />
Sources: Retirement System Actuarial Valuation Reports <strong>and</strong> <strong>San</strong> Francisco <strong>Airport</strong> <strong>Commission</strong>.<br />
Asset Management <strong>and</strong> Actuarial Valuation. The assets <strong>of</strong> the Retirement System are invested in a broadly<br />
diversified manner across the institutional capital markets. In addition to U.S. equities <strong>and</strong> fixed income securities,<br />
the Retirement System holds international equities, global sovereign <strong>and</strong> corporate debt, global public <strong>and</strong> private<br />
real estate <strong>and</strong> an array <strong>of</strong> alternative investments including private equity <strong>and</strong> venture capital limited partnerships.<br />
The Retirement System does not invest directly in subprime mortgage obligations. The investments are regularly<br />
reviewed by the Retirement Board <strong>and</strong> monitored by an internal staff <strong>of</strong> investment pr<strong>of</strong>essionals who in turn are<br />
advised by external consultants who are specialists in the areas <strong>of</strong> the investments described above. Information<br />
regarding the investment policy <strong>of</strong> the Retirement System, a description <strong>of</strong> asset allocation targets, current<br />
investments <strong>and</strong> the Annual Report <strong>of</strong> the Retirement System are available upon request from the <strong>San</strong> Francisco <strong>City</strong><br />
<strong>and</strong> <strong>County</strong> Employees’ Retirement System, 30 Van Ness Avenue, Suite 3000, <strong>San</strong> Francisco, California 94102, or<br />
by calling 415-487-7020.<br />
Recent Changes in the Economic Environment <strong>and</strong> the Impact on the Retirement System. The market value<br />
<strong>of</strong> the Retirement System was approximately $11.98 billion as <strong>of</strong> June 30, 2009. The $3.9 billion difference<br />
between the approximately $15.8 billion market value as <strong>of</strong> June 30, 2008 <strong>and</strong> the approximately $11.9 billion<br />
market value as <strong>of</strong> June 30, 2009 reflects, among other things, participant <strong>and</strong> employer contributions, benefit<br />
payments <strong>and</strong> a decline on a time-weighted basis <strong>of</strong> approximately 22% in the market value <strong>of</strong> assets held by the<br />
Retirement System from June 30, 2008. Despite the Plan’s losses in fiscal year 2009, the Retirement Board <strong>and</strong> its<br />
consulting actuary concur that the Plan remains in a strong financial position to meet its obligations to the Plan<br />
participants <strong>and</strong> beneficiaries.<br />
As <strong>of</strong> December 31, 2009, the Retirement System estimated that the market value <strong>of</strong> its assets has increased<br />
to $13.4 billion. The estimated market value represents, as <strong>of</strong> the date specified, the estimated value <strong>of</strong> the<br />
Retirement System’s portfolio if it were liquidated on that date. The Retirement System cannot be certain <strong>of</strong> the<br />
value <strong>of</strong> certain <strong>of</strong> its portfolio assets <strong>and</strong>, accordingly, the market value <strong>of</strong> the portfolio could be more or less.<br />
Moreover, appraisals for classes <strong>of</strong> assets that are not publicly traded are based on estimates which typically lag<br />
changes in actual market value by three to six months. The estimated market value <strong>of</strong> $13.4 billion has not been<br />
subject to an independent audit.<br />
The Retirement System investment portfolio is structured to focus on long-term performance, <strong>and</strong> the<br />
Retirement System actively manages its investment portfolio, including periodic review <strong>of</strong> its investment policy <strong>and</strong><br />
asset allocation strategy. The Retirement System continues to review its investment <strong>and</strong> asset allocation policies as<br />
part <strong>of</strong> its regular operations <strong>and</strong> continues to rely on an investment policy which is consistent with the principles <strong>of</strong><br />
diversification <strong>and</strong> the search for long-term value. Because the values <strong>of</strong> individual investments fluctuate based on<br />
volatile market conditions, the amount <strong>of</strong> losses, if any, that the Retirement System will recognize in future actuarial<br />
valuations cannot be determined. Market fluctuations are an expected investment risk for a pension fund <strong>and</strong> the<br />
value <strong>of</strong> the Retirement System investment portfolio changes periodically.<br />
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