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CEO reports strong multi‑year returns; staff updates note vacancies and cybersecurity completion
Summary
CEO John Flynn reported fiscal year‑to‑date and multi‑year investment returns above the discount rate and highlighted completed cybersecurity remediation; staff noted several recent separations and ongoing recruitment.
John Flynn, CEO of the San Jose Federated Retirement System, told trustees the pension fund was up 1.95% fiscal year‑to‑date (as of July 1) and that the pension system’s one‑, three‑, and five‑year returns were 9.6%, 8.9%, and 9.8% respectively — figures Flynn said exceed the system’s discount rate (6.625%) and beat the investable benchmark over five years.
Flynn summarized operational items: the benefits division has experienced staff turnover (he listed multiple recent separations and the total current vacancies as four), recruitment has closed for program manager positions with 27 applications received, and one new benefits staff hire was announced. The board was told that the organization completed remediation of 60 security control findings and 93 privacy controls and that an annual penetration test had been completed; a consultant offered to deliver a confidential closeout presentation to the board and staff said the penetration test results will be reviewed at the next joint audit committee meeting.
Flynn also briefed trustees on procurement updates: the actuarial contract with Chiron (actuary) and the actuarial audit contract with Milliman are in process; Aon (governance consultant) was onboarded; communications and compensation consultant tasks are underway; and construction of additional office space is complete pending furniture delivery. Flynn said staff climate survey results are being evaluated and will be discussed with committees as part of a broader strategic planning process; the board will discuss evaluation process reforms with the new governance consultant at future meetings.
Flynn noted ORS is preparing retirees and members for potential 2026 Medicare Advantage rate increases and that outreach will occur after plan terms are finalized. He closed with calendar notes: the September board retreat will be held at ORS offices with a focus on pension fund state, trustee cybersecurity, strategic planning and the investment program.
Trustees asked no substantive follow‑up questions on the performance numbers during the public session.
