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Extracted from Consolidated Report
This investigation was originally published as part of a larger consolidated report containing multiple investigations. View the consolidated PDF for the complete document.
⚠️ Translation Notice: This content has been automatically translated. The original English text is the official version. Translation may contain errors.
⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.
Findings 7 findings
F1
Page 15
The San Francisco Employees’ Retirement System Pension Fund is currently underfunded by more than $2 billion. Responses requested from the Mayor, Board of Supervisors, Controller, San Francisco Employees’ Retirement System Board, and San Francisco Employees’ Retirement System Executive Director.
F2
Page 15
The San Francisco Employees’ Retirement System Board did not complete a “failure analysis” subsequent to the funding loss suffered in 2008-2009. Responses requested from the Mayor, Board of Supervisors, Controller, San Francisco Employees’ Retirement System Board, and San Francisco Employees’ Retirement System Executive Director.
F3
Page 15
The City must pay increasing contributions to the Fund due to underfunding. Responses requested from the Mayor, Board of Supervisors, Controller, San Francisco Employees’ Retirement System Board, and San Francisco Employees’ Retirement System Executive Director.
F4
Page 15
The increases in pension contributions by the City are growing at a faster rate than expenditures on most other City services since 1999. Responses requested from the Mayor, Board of Supervisors, Controller, San Francisco Employees’ Retirement System Board, and San Francisco Employees’ Retirement System Executive Director.
F5
Page 15
The Fund can artificially reduce the City’s estimated liabilities by increasing its investment return assumptions for future years. Responses requested from the Mayor, Board of Supervisors, Controller, San Francisco Employees’ Retirement System Board, and San Francisco Employees’ Retirement System Executive Director. San Francisco Employees’ Retirement System City and County of San Francisco Civil Grand Jury 2011-2012
F6
Page 16
The unrealistically high, assumed investment return rate of 7.66% is driven by concern for the mandated member and City contributions, with little regard for prudent management. Responses requested from the Mayor, Board of Supervisors, Controller, San Francisco Employees’ Retirement System Board, and San Francisco Employees’ Retirement System Executive Director
F7
Page 16
Studies show that public funds with low-risk investment policies perform as well as or better than those with high-risk policies. Responses requested from the Mayor, Board of Supervisors, Controller, San Francisco Employees’ Retirement System Board, and San Francisco Employees’ Retirement System Executive Director. III. Recommendations
Recommendations 6
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R1Page 16San Francisco Employees’ Retirement System Board address the $2 billion dollar underfunding of the San Francisco Employees’ Retirement System Pension Fund by forming a high-level task force with City officials, a panel of experts, community groups, and the public to develop courses of action. Responses requested from the Mayor, Board of Supervisors, Controller, San Francisco Employees’ Retirement System Board, and San Francisco Employees’ Retirement System Executive Director.
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R2Page 16Adopt a realistic and consistent formula for estimating the assumed expected investment return rate. Responses requested from the Mayor, Board of Supervisors, Controller, San Francisco Employees’ Retirement System Board, and San Francisco Employees’ Retirement System Executive Director.
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R3Page 16The San Francisco Employees’ Retirement System Board undertake an in-depth investigation and “failure analysis” study of its investment policy and report its findings to its members and to the public. Responses requested from the Mayor, Board of Supervisors, Controller, San Francisco Employees’ Retirement System Board, and San Francisco Employees’ Retirement System Executive Director. San Francisco Employees’ Retirement System 11 City and County of San Francisco Civil Grand Jury 2011-2012
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R4Page 17Investigate, quantify and address all the major risks in the portfolio and make this information public. Responses requested from the Mayor, Board of Supervisors, Controller, San Francisco Employees’ Retirement System Board, and San Francisco Employees’ Retirement System Executive Director.
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R5Page 17Investigate less volatile and risky investment policies that would attain sufficient returns for the San Francisco Employees’ Retirement System Pension Fund. Responses requested from Mayor, Board of Supervisors, Controller, San Francisco Employees’ Retirement System Board, and the San Francisco Employees’ Retirement System Executive Director.
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R6Page 17Replicate the Stanford, Upjohn, and The New York Times evidence-based comparison studies using San Francisco data, to apply their findings to the San Francisco Employees’ Retirement System Pension Fund. Responses requested from the Mayor, Board of Supervisors, Controller, San Francisco Employees’ Retirement System Board, and San Francisco Employees’ Retirement System Executive Director.