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Retirement board accepts 07/01/2024 valuation; approves 2% COLA and 4% credited interest
Summary
Chiron presented the 07/01/2024 actuarial valuation showing the plan about 95% funded; the board approved a 2% basic COLA effective July 1, 2025, and a 4% credited interest rate for FY2025–26. Chiron said recent charter amendments raised liability modestly for affected groups.
Chiron actuaries presented the results of the 07/01/2024 actuarial funding valuation and the San Francisco City Retirement Board approved several benefit and rate items the board said were supported by the analysis.
"The system is still, very well funded," said Bill Hallmark of Chiron when summarizing the valuation, which showed about 95% funded on a market basis and about 97% on a smoothed actuarial basis. Hallmark and colleague Ann Harper told commissioners that investment returns slightly exceeded the 7.2% assumption (about 7.8% market return), producing a partial supplemental cost‑of‑living adjustment for many retirees.
On the board floor commissioners voted to adopt a 2% basic COLA, effective July 1, 2025, for qualified retirees who retired on or before that date. The board also approved a 4% credited interest rate for fiscal year 2025–26, following a staff recommendation that the board said reflected the valuation and plan experience.
Chiron reported that two charter amendments passed by voters (referred to in the presentation as charter amendments H and I) produced modest but measurable cost increases concentrated in small groups: firefighters in a Prop C tier, eligible per‑diem nurses given limited purchase of prior service, and public‑safety communications staff reclassified into a safety miscellaneous tier. Chiron estimated the amendments increased the plan’s accrued liability by roughly $15.6 million, which the presenters described as small relative to the plan’s total liability (which the presentation cited as about $37 billion).
Presenters also walked commissioners through drivers of the unfunded actuarial liability: favorable asset returns, salary‑driven liability increases, and timing differences in amortization of gains and losses. Commissioners asked about the recent hiring freeze and whether it was reflected in the valuation; presenters said the freeze began after the valuation’s measurement date and would be reflected in the next valuation.
The board moved, seconded and voted to adopt the 07/01/2024 actuarial valuation report and the related employer contribution recommendation.
