Trustees of the City of San Jose Police and Fire Retirement Board received a presentation on the plan's calendar-year 2024 fee report and peer comparison, with staff saying the rise in plan-level fees reflects an increase in private-market commitments rather than a broad management-fee escalation.

The report showed management, incentive and operating fees for the pension plan of roughly $55,600,000, which staff said equated to about 107 basis points of plan assets in 2024. Staff told trustees the health-care trust incurred lower absolute fees and a lower basis-point burden because of its heavier allocation to passive funds.

Harrison, a member of the investment analytics team, told trustees the total expense ratio increased from 97 basis points in 2023 to 107 basis points in 2024, attributing most of the change to an increased allocation to private markets and a modest uptick in incentive fees. "This $12,400,000 of savings in 1 year is achieved through manager negotiations, early investor discounts, and size based discounts," Harrison said, summarizing staff's estimate of one-year fee savings from contract negotiations and scale discounts.

Presenters emphasized the difference between net-of-fee returns and plan-level expense analysis. Staff said measuring only net returns can mask trade-offs made across asset allocation and manager selection; a plan-level fee report, they argued, offers more context about whether the board is efficiently buying the net return it demands.

Trustees asked about benchmarking and whether the report's production was worth the effort; staff replied the report has been produced for a decade and that the methodology matches or exceeds common practice among comparable public plans. Staff also said they continue to control management fees where possible and that private-market commitments can raise near-term fee ratios because private funds typically charge fees on committed capital as it is drawn down.

The fee report was informational; there were no formal votes attached to the presentation.