Southfield retirement board reports $204 million in assets, 66% funding ratio and strong recent returns

A representative of the Southfield Fire and Police Retirement System told the City Council the pension fund held about $204 million in invested assets and had actuarial accrued liabilities near $304 million at the June 30, 2024 valuation, producing a funded ratio reported at approximately 66%.

The board representative (identified in the meeting as the treasurer for the retirement board) outlined the system’s governance: five trustees (including ex officio representation from the city treasurer, one police representative, one fire representative and two citizen appointees approved by council); separate budgeting and outside legal, actuarial and investment consultant relationships; and adherence to Michigan Public Act 345, which governs public safety pension plans.

Key numbers presented by the retirement system: - Plan assets: approximately $204,000,000 (valuation date June 30, 2024). - Actuarial accrued liabilities: approximately $304,000,000. - Funded ratio: about 66%. - One-year net return (most recent full-year numbers available at presentation): 18.1%. - Five-year net return: 8.3%. - Ten-year net return: 7.14%. - Number of active members (fire and police combined, as of June 30, 2024): 214. - Number of retirees and beneficiaries (as of June 30, 2024): 420. - Annual benefit payments: approximately $18,300,000 (reported by board representative). - Average active employee age: 37.2 years; average years of service among actives: 10.1; average pay reported: $110,541. - Typical pension eligibility discussed as 20 years of service (with pension calculations using up to a 25-year maximum) and survivor and disability benefits in place.

The retirement board representative said the system is considered “mature” because retirees now outnumber active employees by almost two to one. The board has a dedicated millage included on summer taxes that helps fund the pension system; contributions are made each payroll period. The city’s contribution toward pension benefits was described as 45% of payroll; retiree health benefits were described separately.

Council members asked comparative questions about the funding ratio and the representative noted the state had set a threshold of 60% for certain supplemental disbursements and that Southfield’s 66% figure left it ineligible for a recent state distribution. The board representative characterized recent market volatility — notably 2022’s losses — as a factor in funding-level swings and stressed the board’s goal of achieving a target actuarial return of roughly 7%.

No formal council action was taken; the item was presented for information and included in the consent agenda as the board’s 2024 summary annual report.