The San Jose Police & Fire Retirement Board on Dec. 10 accepted the final pension valuation, which shows the plan’s market‑value funded ratio rose from 83% to 88% and the unfunded accrued liability fell to about $988 million.

Chiron, the actuary, told trustees the plan benefited from recent investment gains — a 10.7% market return recognized in part through smoothing — and from assumption changes adopted earlier this year. “Due to some very good returns above your assumed rate of return, you have deferred gains,” Chiron said, and those gains helped reduce the UAL to below $1 billion.

The report showed the plan’s funded ratio on an actual‑value basis increased from roughly 82% to 84%, and Chiron projected that, if all assumptions are met (including a 6.625% discount rate), the combined plan could reach about 97% funded within five to six years. The actuary highlighted that roughly 70% of liabilities are for members in pay status and that tier‑1 (closed) liabilities will peak and then decline as members age out.

Trustees pressed presenters on the plan’s sensitivity to market swings. Chiron emphasized the maturity issue: a higher retiree‑to‑active ratio increases volatility. “Mature pension plans are more sensitive to risk,” the firm said, illustrating stress tests in which a one‑year negative shock could push the funded ratio down into the mid‑70s and raise contribution levels for decades under phased‑in recognition.

Board members discussed options for responding to maturity risk, including revisiting asset‑allocation targets and possible de‑risking paths. Several trustees recommended a joint review with investment staff and consultants to align liability characteristics with investment risk targets before the plan reaches full funding.

The board voted to accept the valuation and to send the actuary’s letter as presented. The motion passed on roll call.