The San Jose Federated City Employees Retirement System voted Thursday to keep the pension plan's key economic assumptions unchanged and approved a set of administrative and contracting actions, the board said at the conclusion of its October meeting.

The board unanimously voted to maintain the retirement plan's core economic assumptions used for the 2025 valuation: price inflation at 2.5 percent, wage inflation at 3.0 percent, the amortization payment increase rate at 2.75 percent and the pension discount rate at 6.625 percent. Trustees discussed market valuations, interest-rate trends and the risk of changing the discount rate now but decided to hold the assumptions for the coming valuation cycle.

Why it matters: the discount rate and inflation assumptions set the actuarial foundation for contribution rates and long-term funding projections. Keeping the assumptions steady preserves the current budgeting path for employer and employee contributions while the board continues to monitor markets and the plan's funded status.

Beyond the assumptions, trustees also approved several governance and operational items. The board:
- Adopted a technical update to the Investment Committee charter (item 3.g) to correct cross-references and section numbering;
- Approved a revision to the board's officer-election policy to clarify procedures for deadlocked chair and vice-chair votes;
- Authorized staff to negotiate and execute a contract for internal audit services with Baker Tilly, after a competitive procurement: the joint audit panel recommended a two-year base term with optional extensions;
- Approved the recommended apportionment in a workers'compensation-related disability case (an IME apportionment issue); and
- Approved two staffing requests: classifying one staff specialist into an analyst position (ad-delete) and creating an over-strength program manager in Benefits to cover immediate workload and succession needs.

The board also directed the governance committee to review committee term-limit options and report back with recommendations. That directive will start as an assignment to the governance committee and its consultant to prepare comparative models and an impact assessment.

Votes at a glance (formal actions recorded in the meeting):
- Economic assumptions (price inflation 2.5%; wage inflation 3.0%; amortization increase 2.75%; discount rate 6.625%): approved by voice vote.
- IC Charter technical update: approved (motion/second; voice vote).
- Election-policy revisions (process for resolving nominations/deadlocks): approved.
- Contract award recommendation (internal audit services to Baker Tilly): approved and authorized for negotiation and execution.
- Disability apportionment (IME portion / apportionment recommendation): approved per Disability Committee recommendation.
- Staffing: approved ad-delete (staff specialist -> analyst) and approved over-strength program manager request; both were moved and approved.
- Governance directive to evaluate committee term limits: approved.

Board chair and staff said the decisions balance short-term budget constraints, the board's governance needs and the need for continuity while the plan staff executes a multimonth search and transition for investment leadership.

Trustees called the package of approvals important for operations and transparency; several trustees emphasized that holding the discount rate steady did not remove the board's need to revisit assumptions if market conditions change.

Ending: The board scheduled follow-ups through the actuarial calendar: preliminary pension valuation results and demographic reviews will return at November and December meetings, and the governance and personnel committees will report back on their assigned work in coming months.