Mendocino County Employees' Retirement Association staff presented the system27s Annual Comprehensive Financial Report (ACFR) and Popular Annual Financial Report (PAFR) for the fiscal year ended June 30, 2025, highlighting investment performance and fee metrics.

Robert Reveles, retirement financial investment officer, told trustees the fund recorded a strong year, reporting a 12.3% time-weighted return for fiscal 2025 and notable net realized and unrealized appreciation. Reveles called out a change in net appreciation figures "from $2,447,000,000 to $2,570,000,000" as presented in the report and explained that employer and member contributions rose modestly due to actuarial-rate increases and higher payrolls among plan sponsors.

On costs, staff presented a total investment management expense of $4,500,000 for the year and explained the distinction between direct fees (those the system pays and invoices it receives) and fund-level (indirect) fees embedded in the net asset value of pooled funds. Using a plan net position cited in the presentation ($793,000,000), staff showed the combined direct and fund-level fees equate to roughly 57 basis points (0.57%) on a plan-wide basis. Reveles said the system's simpler portfolio structure, with a large weight in low-cost index funds (citing a Vanguard S&P 500 holding), contributed to the relatively low fee rate compared with many California county systems.

Trustee questions focused on comparability and historical ranges. Staff offered to provide peer comparisons and prior-year calculations; trustees asked for periodic reporting of the plan-level fee metric going forward. Reveles also described accounting changes that affected how incentive fees (for example, with a JPMorgan allocation) are reported, and staff committed to checking small variances in tables before final submission to the Government Finance Officers Association (GFOA).

The presentation also reviewed actuarial schedules showing changes in the Unfunded Actuarial Accrued Liability (UAAL), smoothing assumptions, and historical payroll trends; staff noted that paying down the POB (pension obligation bond) materially affected past funded-ratio calculations.

What happens next: Staff will include the requested comparative fee analysis in a future meeting packet, confirm minor tabular discrepancies before final ACFR submission to GFOA, and consider a regular reporting cadence for plan-level fee metrics.

Representative quotes from the meeting transcript include Robert Reveles: "We had a great year, a 12.3% time weighted return in fiscal year 25," and on fees: "So the total expense for the entire investment program is this $4,500,000... that number is going to be 57 basis points."