San Jose Retirement Board approves 2025–26 administrative budget after extended review

The San Jose Office of Retirement Services Board of Trustees voted to accept the proposed administrative budget for fiscal year 2025–26 following a detailed presentation from staff and questions from trustees.

The board approved a proposed budget that staff said represents a $296,000, or 3.6%, increase over the adopted fiscal 2025 budget. Staff said the increase reflects several reallocated IT and professional‑services costs, one‑time office build‑out expenses for expanded space, and anticipated higher costs for services that are being reprocured, such as legal and actuarial work.

Staff walked trustees through the line items. Personnel services were shown with a modest 2% decrease driven by a mix of staffing changes, one‑time transition costs that do not recur, and the planned deletion and addition of positions that leave headcount largely unchanged. The presentation noted a plan to delete a senior internal auditor position, add an administrative officer (later discussed with the city as a program manager classification) and continue one over‑strength administrative post and a portion of a cybersecurity analyst position.

Non‑personnel and equipment spending was shown down about 4.9% after staff reallocated approximately $123,000 of IT-related fees from that bucket into professional services; staff stressed that reallocation was not a net savings but an accounting shift tied to how vendor fees (for the pension administration system) are categorized. The budget includes $60,000 for build‑out of additional office space on the fifth floor and $15,000 to study document‑management upgrades to address OneDrive/SharePoint synchronization problems.

Professional services was the largest area of increase, shown as a 35% rise year over year (approximately $456,000). Staff said roughly $123,000 of that is the reallocation from IT, and the remainder reflects both anticipated higher market pricing for newly negotiated or rebid contracts (legal, governance, actuarial) and a new internal‑audit consulting line (staff estimated about $180,000). Staff also proposed a $30,000 engagement with CEM Benchmarking to produce operations benchmarking for both the police & fire and federated plans; staff warned the vendor’s questionnaire may require internal work to provide detailed operational data.

Trustees probed several items: the basis for a 60/40 split of investment staff costs between police & fire and federated accounts (staff said the split tracks assets under management and some historical allocations), whether reallocated amounts were actual savings (staff again said most were classification changes), implications of adding strategic‑planning and governance consulting work, and whether legal retainers and ad‑hoc fees should be budgeted differently. Trustees and staff discussed the tradeoff between keeping the budget tight and retaining a modest cushion for unpredictable legal or project work.

After discussion, a trustee moved to accept the budget and a second was recorded; the board voted in favor of adoption.

The board and staff said they will continue refining classifications with the city (for example, replacing the proposed administrative officer with a program manager classification if the city approves). Staff also said any contract negotiations that produce materially different cost estimates will be reported back to the board. The CEO noted the budget does not include investment manager fees or capitalized costs for the pension administration system, which are reported separately.

The board will send the adopted administrative budget through the remaining city approvals as required.