The San Jose Federated Retirement Board approved its final 2025 actuarial valuation on Dec. 16, 2025, accepting results presented by the board’s actuaries and adopting the report for publication.

The valuation presented a total fund market value of about $3.6 billion and showed funded‑ratio improvements for both tiers: Tier 1 rose to roughly 62.9% and Tier 2 to about 94.5%, producing a systemwide funded ratio in the mid‑60s. Actuaries said strong investment returns and ongoing contributions helped offset liability increases driven primarily by unusually large salary increases in the measurement year.

The actuarial firm walked trustees through sensitivity analyses. A hypothetical 100‑basis‑point reduction in the discount rate would materially increase both city and member contribution rates; an extreme one‑year negative market shock (smoothed recognition under policy) also would raise contribution requirements significantly and sustain higher city payments over several years. Under baseline projections and current policy, actuaries showed the funded ratio converging to 100% by about 2040 if assumptions hold.

Trustees heard that private markets distributions have begun to produce cash back to the program (presenters reported recent distributions including an $11 million post‑Q2 realization), and staff emphasized that private markets pacing and vintage‑year diversification remain active parts of the portfolio strategy. Actuaries used a suite of scenarios — single‑year shocks, five‑year moderate outcomes and stochastic simulations — to demonstrate a wide range of possible future contribution paths.

The board approved the valuation and accepted the presentation materials. Trustees subsequently directed staff to update the Public Annual Financial Report (PAFR) to include the newly approved 2025 funded‑status numbers before publication.

What it means: The valuation approval sets official contribution rates and is the basis for forthcoming employer and member contribution communications. Actuary stress tests underscore the plan’s sensitivity to market outcomes while showing a path to recovery if long‑term assumptions are met.