City of Fresno Employees Retirement System
A Pension Trust Fund of the City of Fresno (California)
ANNUAL COMPREHENSIVE
FINANCIAL REPORT
FOR FISCAL YEARS ENDED JUNE 30, 2025 AND 2024
Issued by:
Robert T. Theller
Retirement Administrator
Kathleen Riley Brown
Assistant Retirement Administrator
2828 Fresno Street Suite 201, Fresno, CA 93721-1327
(559) 621-7080 / [email protected]
www.CFRS-CA.org
TABLE OF CONTENTS
Introduction Section
Letter of Transmittal .................................................................................................................................................................................. i
City of Fresno Employees Retirement System Board Members ............................................................................................................... ix
City of Fresno Retirement Office Staff ..................................................................................................................................................... x
Administration of the System .................................................................................................................................................................... xi
Organizational Structure ............................................................................................................................................................................ xii
Professional Services and Consultants ...................................................................................................................................................... xiii
Investment Portfolio Managers ................................................................................................................................................................. xiv Certificate of Achievement for Excellence in Financial Reporting .......................................................................................................... xv Financial Section
Independent Auditor’s Report ................................................................................................................................................................... 2 Management’s Discussion and Analysis ................................................................................................................................................... 5 Basic Financial Statements
Statement of Fiduciary Net Position ......................................................................................................................................................... . 18 Statement of Changes in Fiduciary Net Position ....................................................................................................................................... 19 Notes to the Basic Financial Statements ................................................................................................................................................... . 20 Required Supplementary Information
Schedule of Changes in the Net Pension Liability ............................................................................................................................... 56 Schedule of Employer Contributions ................................................................................................................................................... 58 Schedule of Investment Returns .......................................................................................................................................................... . 58 Notes to the Required Supplementary Information ............................................................................................................................. . 59 Other Supplementary Information
Schedule of Administrative Expenses .................................................................................................................................................. 61 Schedule of Investment Management Expenses .................................................................................................................................. 62 Schedule of Payments to Consultants .................................................................................................................................................. . 62 Investment Section
Investment Report from the Retirement Administrator ............................................................................................................................. 64 Investment Consultant’s Report ................................................................................................................................................................ 69 Investment Results (Gross and Net of Fees) ............................................................................................................................................. 71 Target Asset Allocation and Actual Asset Allocation ............................................................................................................................... 73 Largest Stock and Bond Holdings ............................................................................................................................................................. 75 Schedule of Commissions ......................................................................................................................................................................... 76 Investment Summary ................................................................................................................................................................................. 76 City of Fresno Employees Retirement System
Actuarial Section
Actuarial Certification Letter .................................................................................................................................................................... . 78 Summary of Actuarial Assumptions and Funding Method ....................................................................................................................... 82 Probabilities of Separation Prior to Retirement ........................................................................................................................................ . 84 Schedule of Active Member Valuation Data ............................................................................................................................................. 85 Schedule of Retirees and Beneficiaries Added to or Removed from Rolls ............................................................................................... 86 Solvency Test ............................................................................................................................................................................................ 87 Actuarial Analysis of Financial Experience .............................................................................................................................................. 88 Schedule of Funding Progress ................................................................................................................................................................... 88 Major Benefit Provisions of the Retirement System ................................................................................................................................. 89 History of Employer Actuarially Determined Net Contribution Rates ..................................................................................................... 90 Statistical Section
Statistical Section Review.......................................................................................................................................................................... 92 Schedule of Changes in Fiduciary Net Position ........................................................................................................................................ 93 Schedule and Graph of Additions by Source ............................................................................................................................................. 94 Schedule and Graph of Deductions by Type ............................................................................................................................................. 95 Membership Information
Schedule of Average Benefit Payments ............................................................................................................................................... 96 Retirees by Type of Benefit .................................................................................................................................................................. 98 Schedule and Graph of Pension Benefit Payments Deductions by Type ............................................................................................. 99 Schedule and Graph of Active Vested, Active Non-Vested and Deferred Membership History ......................................................... 100 Schedule and Graph of Retirees Pension Benefit Payments by Type of Benefit ................................................................................. 101 Summary of Active Participants and Retirees ...................................................................................................................................... 102 Member and City Contribution Rates .................................................................................................................................................. 103 Economic Assumptions and Funding Method ..................................................................................................................................... 103 Benefits and Withdrawals Paid ............................................................................................................................................................ 104 Average Monthly Benefits to Retirees ................................................................................................................................................. 105 Expectation of Life (Age and Service Retirees) .................................................................................................................................. 106 Expectation of Life (Disabled Retirees) ............................................................................................................................................... 106 Compliance Section
Independent Auditor’s Report on Internal Control .................................................................................................................................... 108 Over Financial Reporting and on Compliance
and Other Matters Based on an Audit of
Financial Statements Performed in Accordance
With Government Auditing Standards
City of Fresno Employees Retirement System
MISSION STATEMENT
To protect and provide System benefits through the highest quality delivery of service for our members and the employer, prudently fulfilling our fiduciary duties of investment and conservation of Trust assets.
BOARD AND STAFF COMMITMENT
We promise to carry out our Mission through a competent, professional, impartial and open decision-making process. In providing benefits and services, all persons will be treated fairly, with courtesy and respect. Assets will be invested and administered to balance the need to control risk with superior performance. We expect excellence in all activities. We will also be accountable and act in accordance with the law.
GOALS
• To create an environment in which Board Members can
maximize their performance as trustees.
• To improve business processes and our delivery of services provided to members and retirees.
• To improve communications with members, retirees and the employer.
• To attract, develop and retain competent and professional staff. • To achieve and maintain superior investment performance on a risk controlled basis measured by the Public Fund Universe.
City of Fresno Employees Retirement System
The Employees
Retirement System was
established on June 1,
1939 and is maintained
and governed by Article 5
of the Fresno Municipal
Code.
The Employees
Retirement System (the
System) provides
retirement benefits for all
qualified non-sworn
employees of the City of
Fresno.
INTRODUCTION
i Letter of Transmittal
ix City of Fresno Employees Retirement System Board Members x City of Fresno Retirement Office Staff
xi Administration of the System
xii Organizational Structure
xiii Professional Services and Consultants
xiv Investment Portfolio Managers
xv Certificate of Achievement for Excellence in Financial Reporting Letter of Transmittal
Robert T. Theller, Esq.
RETIREMENT ADMINISTRATOR
Dear Retirement Board and System Members:
As Retirement Administrator of the City of Fresno Employees Retirement System (the System), it is with great pleasure that I submit the Annual Comprehensive Financial Report (ACFR) for the fiscal years ended June 30, 2025 and 2024.
Fiscal Year 2025 marked a notable transition from aggressive inflation control to cautious monetary easing. The Federal Reserve initiated a rate-cutting cycle that began in 2024 and continued in 2025, cutting rates to 4.00% just recently in October 2025.
Real GDP growth slowed during the year, with a dip in the first quarter of calendar 2025, the first decline in several years, though growth remained positive over the full fiscal period. The labor market showed signs of easing, with unemployment gradually rising from historic lows, helping to temper wage inflation. The Fed’s rate cuts provided stability to interest- sensitive sectors such as housing and corporate investment.
Major indices, including the S&P 500, Dow Jones, and NASDAQ, posted solid gains, driven by strong earnings from the “Magnificent Seven” technology stocks and continued enthusiasm around artificial intelligence. Global uncertainties, including geopolitical tensions and trade disruptions, contributed to market volatility but did not derail overall growth.
The U.S. economy demonstrated resilience and adaptability in a complex fiscal environment. Cooling inflation, a resilient labor market, and strong equity performance have contributed to a more optimistic outlook for the year ahead.
Despite the complex economic environment of Fiscal Year 2025, the System demonstrated resilience and maintained its strong financial footing. This stability is a testament to its long-term focus. Notably, the System concluded the fiscal year fully funded on both a fair value and actuarial valuation basis at 118.6 percent and 114.0 percent, respectively. From a long- term perspective, the System is positioned to provide a solid rate of return that is equal to or better than the respective asset classes market indices even as we enter yet another year of uncertainties in the global economic and financial markets. The Retirement Board (the Board) has carefully managed the investment portfolio, and we remain confident that new investment opportunities will arise and the Board, with the required amount of due diligence and vigilance, will position the System’s investments for future long-term growth.
City of Fresno Employees Retirement System l INTRODUCTION Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 i The System’s returns for the last two years have been positive at 11.08 percent and 10.59 percent for the fiscal years ended June 30, 2025 and 2024, respectively. Both the fiscal year 2025 return of 11.08 percent and the fiscal year 2024 return of
10.59 percent exceeded the System’s assumed rate of return of 6.75 percent effective June 30, 2025, and June 30, 2024.
In fiscal year 2025, the System’s gross of fee returns provided by its custodian, Northern Trust, when compared to other institutional investors and weighted policy benchmarks, were slightly higher in the short-term, and consistently higher over the long-term. The System’s gross of fees one-year return was 11.08 percent, 0.46 percent above its policy benchmark return of 10.62 percent; also outperforming its actuarial interest rate assumption of 6.75 percent by 4.33 percent in fiscal year 2025.
The five-year annualized gross of fees return of 10.36 percent was 3.61 percent above its actuarial interest rate assumption of
6.75 percent and above its policy benchmark return of 9.47 percent by 0.89 percent. The System's ten-year annualized gross of fees return at 8.27 percent exceeded its policy benchmarks of 7.49 percent by 0.78 percent and also exceeded its actuarial interest rate assumption by 1.52 percent for the same period.
The System remains highly funded and well positioned to serve our members and retirees. As illustrated by the System’s 10, 15 and 25-year long-term gross of fees returns of 8.27 percent, 9.30 percent, and 6.87 percent, respectively, as of June 30, 2025, the System can achieve its long-term objectives over extended periods. Meanwhile, the System’s actuarial and fair value funding status continues to be the highest of any public non-safety pension defined benefit plan in California.
The Annual Comprehensive Financial Report (ACFR)
The Annual Comprehensive Financial Report (ACFR) of the City of Fresno Employees Retirement System for fiscal years ended June 30, 2025 and 2024 is submitted herewith. Information contained in this report is designed to provide a complete and accurate review of the years' operations. Responsibility for both the accuracy of the data, and the completeness and fairness of the presentation, rests with the management of the System. For a general overview of the City of Fresno Employees Retirement System’s finances, please refer to the Management’s Discussion and Analysis in the Financial Section of this report. The ACFR consists of six sections:
The Introduction Section contains our Mission Statement, a Letter of Transmittal, a description of the System’s management and organizational structure, a listing of the professional services providers, and the Government Finance Officers Association’s Certificate of Achievement for Excellence in Financial Reporting.
The Financial Section contains the opinion of the independent auditor, Brown Armstrong Accountancy Corporation, Management’s Discussion and Analysis, the Basic Financial Statements of the System, the Required Supplementary Information and the Other Supplementary Information.
City of Fresno Employees Retirement System l INTRODUCTION Letter of Transmittal Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 ii The Investment Section includes an Investment Report from the Retirement Administrator, a letter from the System’s Investment Consultant, NEPC, LLC (NEPC), recapping the fiscal year investment results and activities, along with performance and asset allocation information. Investment Consultant returns may differ slightly from the custodian's book of record due to rounding methodology.
The Actuarial Section includes the certification letter produced by the independent actuary, The Segal Company, along with the supporting schedules and information.
The Statistical Section contains significant detailed data pertaining to the System.
The Compliance Section contains the Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance And Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards.
I trust that the Board and Members of the System will find this ACFR helpful in understanding the System and our commitment to financial integrity and member services.
THE EMPLOYEES RETIREMENT SYSTEM AND ITS SERVICES
The Employees Retirement System was established on June 1, 1939, under Charter Section 910 and is governed by Article 5 of Chapter 3 of the City of Fresno Municipal Code. The System provides retirement allowances to the non-safety members employed by the City of Fresno (the City). In accordance with the provisions of the City of Fresno Municipal Code, the System provides lifetime retirement, disability, and death benefits to its members.
The Employees Retirement Board is responsible for establishing policies governing the administration of the System, making benefit determinations, and managing the investment of the System’s assets. The Board operates under the authority vested in Article 5 of Chapter 3 of the City of Fresno Municipal Code and the California Pension Protection Act of 1992. Article XVI, Section 17(b) of the Constitution of the State of California provides that “the members of the Retirement Board of a public retirement system shall discharge their duties ... solely in the interest of, and for the exclusive purpose of providing benefits to, participants and their beneficiaries, minimizing employer contributions thereto, and defraying reasonable expenses of administering the System. A Retirement Board’s duty to its participants and their beneficiaries shall take precedence over any other duty.” Section 17(a) further provides that the Board has ... “the sole and exclusive responsibility to administer the System in a manner that will assure prompt delivery of benefits and related services to the participants and their beneficiaries.” The Retirement Board is also responsible for the prudent investment of member and employer contributions and defraying reasonable expenses of administration.
City of Fresno Employees Retirement System l INTRODUCTION Letter of Transmittal Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 iii The Retirement Board has five (5) members: two (2) management employees who are appointed by the Mayor and confirmed by the City Council, one (1) employee who is elected by the manual workers of the System, and one (1) employee who is elected by the clerical or supervisory workers of the System; both elected members serve a four-year term. The fifth and final member of the Board is a qualified elector of the County of Fresno, not connected with its government, appointed by the previously designated four members. The Board oversees the Retirement Administrator and staff in the performance of their duties in accordance with the Municipal Code and the Board’s Rules, Regulations and Policies.
Major Initiatives
The Board, jointly with the City of Fresno Fire and Police Retirement System Board (the Boards), maintained active oversight of the investment portfolios. With support of Staff and their Investment Consultant, the Boards continued ongoing asset class reviews, investment education initiatives, and evaluations of all investment categories.
During the fiscal year 2025, upon completion of investment due diligence, legal reviews, operational due diligence and background investigations, the Joint Boards approved investments with Asia Alternatives, a private equity manager specializing in Asian markets; Blue Vista Co Investments OCOEE and Lugoff, Carlyle RSEF II, a private equity fund specializing in renewable and energy transition assets; Monroe Co Investment, a private credit fund; and TPG AG, a private equity fund with investments in European real estate. Near the end of the fiscal year, the Boards approved further European real estate investments with PIMCO EDCO and Hines Asian Real Estate Partners, after completion of investment and operational due diligence and legal reviews of each firm.
Effective January 1, 2017, the IRS eliminated its staggered five-year remedial amendment cycle system for individually designed qualified retirement plans and no longer accepts applications for determination letters. The System's letter of determination was effective through January 31, 2019. The IRS' current determination letter program, in general, provides that a plan sponsor that maintains a qualified plan, with a favorable determination letter, may continue to rely on the determination with respect to any plan provision, until such time that the plan provision subsequently is amended or affected by a change in law. The Boards retained the services of the law firm of Ice Miller, LLP (Ice Miller) to assist with a review of our plan documents and applicable statutes in effect through 2013, and any plan amendments or changes to provisions made after January 1, 2014. Based on their initial review, since the date of the plan's favorable determination letter May 26, 2014, the plan has been timely amended to comply with the changes required to be tax qualified under Internal Revenue Code § 401 (a). Staff began work with Ice Miller in 2019 to review the Retirement Systems' plan provisions for continued IRS compliance. The proposal from Ice Miller to participate in the IRS Comply Now program included updating of the Systems’ plan provisions to incorporate certain distribution provisions and new provisions required by the Setting Every Community Up for Retirement Enhancement (SECURE) and Coronavirus Aid, Relief and Economic Security (CARES) Acts. Comply Now reports detailing the changes to be considered were presented to the Boards during fiscal year 2021. Given the passage of SECURE 2.0 in 2022, Staff will work with counsel on additional updates to amendments of the plans.
City of Fresno Employees Retirement System l INTRODUCTION Letter of Transmittal Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 iv Retirement Benefits Staff have continued to provide all the necessary information and support that Members need, answering individual questions and assisting members in making informed decisions regarding retirement. Staff are available to assist and answer member questions via telephone, face-to-face meetings and via online video conferencing. Staff also provide further outreach to active employees via the Mid-Career Retirement Seminars. These seminars provide an overview of the benefits available to active members who may be considering retirement or Deferred Retirement Option Program (DROP) in the next 5-10 years.
With the assistance of its actuary and staff, the Board completed the annual actuarial valuations for June 30, 2025 and 2024, and Governmental Accounting Standards Board (GASB) Statement No. 67, which redefines pension liability and expense for financial reporting purposes only. In accordance with Actuarial Standards of Practice (ASOP) No. 51, the System's actuary has identified and assessed risks that may be reasonably anticipated to significantly affect the System's future financial condition, which helps intended users of the actuarial findings gain a better understanding of risks inherent in the measurements of pension obligations and actuarially determined pension plan contributions.
Professional Services
Professional Services Consultants and Investment Portfolio Managers are retained by the Board to provide professional services essential to the effective and efficient operation of the System. See listings on pages xiii and xiv.
An opinion from the Independent Auditor and a certification letter from the Actuary are included in this report along with a summary investment report from the Board’s Investment Consultant. The Consultants and Investment Managers retained by the Board are listed in the following section of this report.
Certificate of Achievement
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Fresno Employees Retirement System for its annual comprehensive financial report for the fiscal year ended June 30, 2024. The Certificate of Achievement is a prestigious national award recognizing excellence in the preparation of public employee retirement system annual comprehensive financial reports.
To be awarded a Certificate of Achievement for Excellence in Financial Reporting, a government entity must publish an easily readable and efficiently organized annual comprehensive financial report. This report must satisfy both generally accepted accounting principles and applicable legal requirements.
A Certificate of Achievement for Excellence in Financial Reporting is valid for a period of one year only. The System has received a Certificate of Achievement for the last 24 consecutive years. We believe that our current annual comprehensive financial report continues to meet the Certificate of Achievement Program’s requirements and we are submitting it to the GFOA to determine its eligibility for another certificate. For fiscal year 2024, the System submitted a Popular Annual Financial Report (PAFR) to the GFOA. The System received from the GFOA an Award for Outstanding Achievement in Popular Annual Financial Reporting. The PAFR provides System membership with condensed and concise information in an easier to read format than is presented in the ACFR.
City of Fresno Employees Retirement System l INTRODUCTION Letter of Transmittal Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 v Actuarial Funding Status and Net Pension Liability
The System’s funding objective is to meet long-term benefit promises by retaining a well-funded plan status and obtaining superior investment returns while minimizing employer contributions. The Board’s objective for employer contributions is to establish a rate as a level percent of member payroll. The greater the level of overall plan funding, the larger the ratio of assets accumulated compared to the actuarial accrued liability and the greater the level of investment potential. The advantage of a well-funded plan is that the benefits earned by participants are funded during their working careers and not by future generations of taxpayers.
The June 30, 2025 actuarial valuation of the City of Fresno Employees Retirement System is presented in this ACFR. As of June 30, 2025, the funded ratio of the Employees Retirement System was 114.0 percent. The ratio of the valuation value of assets to actuarial accrued liabilities was 109.8 percent as of June 30, 2024, valuation. The funding ratios as of June 30, 2025 and 2024, if measured using the fair value of assets instead of the actuarial valuation value of assets, are 118.6 percent and 112.8 percent, respectively. The funded ratios were determined by using the actuarial value of the assets in accordance with actuarial standards.
The actuarial accrued liability of the System at June 30, 2025, for funding purposes, amounted to $1,520,441,000; the actuarial valuation value of assets amounted to $1,732,580,350; and the fair value of assets (including non-valuation reserves) amounted to $1,974,211,816. At June 30, 2024, the actuarial valuation value of assets amounted to $1,600,472,705; the fair value of assets (including non-valuation reserves) amounted to $1,815,104,966.
Under the Governmental Accounting Standards Board (GASB) Statement No. 67 Financial Reporting methodology, the net pension liability of the System as of June 30, 2025, indicates a surplus of $225,498,310; while on an actuarial funding basis the valuation value of assets basis reflects a surplus of $212,139,350 and a funding ratio of 114.0 percent. At June 30, 2024, the net pension liability of the System indicated a surplus of $140,220,397 and a funding ratio of 109.8 percent. For financial reporting purposes, the Plan Fiduciary Net Position as a percentage of the Total Pension Liability is 112.90% and 108.37% as of June 30, 2025 and 2024, respectively.
The Board engages an independent actuarial consulting firm to conduct annual actuarial valuations of the System. The purpose of the actuarial valuation is to reassess the magnitude of the benefit commitments. This is compared to the assets expected to be available to support those commitments. Recommendations are presented to the Board for consideration. The Segal Company is the System’s independent actuarial consultant. The Actuarial Section of this report contains a more detailed discussion of funding.
City of Fresno Employees Retirement System l INTRODUCTION Letter of Transmittal Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 vi Accounting System & Reports
The management of the System is responsible for establishing and maintaining an internal control structure designed to ensure that System assets are protected from loss, theft, or misuse. Responsibility for the accuracy, completeness, and fair presentation of the information, and all disclosures, rests with the management of the System.
The accounting firm of Brown Armstrong Accountancy Corporation provides financial audit services. The financial audit ensures that the System’s financial statements are presented in conformity with accounting principles generally accepted in the United States of America (GAAP) and are free of material misstatement. The internal controls are designed to provide reasonable but not absolute assurance that these objectives are met. The System recognizes that even sound internal controls have their inherent limitations. Internal controls are reviewed to ensure that the System’s operating policies and procedures are being adhered to and that the controls are adequate to ensure accurate and reliable financial reporting and to safeguard the System’s assets. The objective is to provide a reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements given the prudent need to ensure that the cost of a control should not exceed the benefits to be derived. We believe that the System's internal controls adequately safeguard assets.
This report has been prepared in accordance with Generally Accepted Accounting Principles for State and Local Governments (GAAP) as established by the Governmental Accounting Standards Board (GASB). The System’s transactions are reported on the accrual basis of accounting. Revenues are considered when earned, regardless of the date of collection.
Expenses are recorded when the corresponding liabilities are incurred, regardless of when the payment is made.
Investments
Article XVI, Section 17(c) of the Constitution of the State of California, provides that “the members of the Retirement Board of a public pension or retirement system shall discharge their duties... with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with these matters would use in the conduct of an enterprise of a like character and with like aim.” By permitting further diversification of investments within a fund, the prudent expert standard may enable a fund to reduce overall risk and increase returns. A summary of the asset allocation can be found in the investment section of this report and in Note 2 – Summary of Significant Accounting Policies (see sections Investment and Financial).
The prudent expert rule permits the Board to establish an investment policy based upon professional advice and counsel and allows for delegation of investment authority to professional investment advisors. The Investment Objectives and Policy Statement of the Board outline the responsibility for the investment of the fund and the degree of risk that is deemed appropriate for the fund. Investment advisors are to execute the policy in accordance with the Board policy and guidelines.
For the fiscal years ended June 30, 2025 and 2024, the System’s investments provided an 11.08 percent and 10.59 percent gross of fees rate of return, respectively, as reported by the custodian, Northern Trust.
City of Fresno Employees Retirement System l INTRODUCTION Letter of Transmittal Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 vii City of Fresno Employees Retirement System l INTRODUCTION Letter of Transmittal Continued
Acknowledgments
The compilation of this report reflects the combined effort of the System’s staff under the leadership of the Board. It is intended to provide complete and reliable information as a basis for making management decisions, as a means of determining compliance with legal provisions, and as a means of determining responsible stewardship of the funds of the System.
On behalf of the Board, I would like to express my appreciation for the dedication and efforts of my staff members, Kathleen Riley Brown, Yvonne Timberlake, Chad Jacobs, Alberto Magallanes, Cristina Jurado, Kristina Espinoza, Pattie Laygo, Andrea Ketch, Patricia Basquez, Joan Taketa, Tracy Gonzales, Enia Leon, Erika Cortes, Machelle Smiley, Cecilia Lopez, Gilberto Torentela, and the Board's consultants, for their assistance in the preparation of this report and for their ongoing commitment to serve the Board and the members of the System. I also would like to thank the Board members for their support in accomplishing the many tasks and goals over the past year.
Respectfully Submitted,
Robert T. Theller
Robert T. Theller, Esq.
Retirement Administrator
December 3, 2025
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 viii Retirement Board Members
As of June 30, 2025
Chair
Vacant
Vice Chair
Ruth F. Quinto
Appointed December 2022
Term Continuous
Appointed by the Mayor and Confirmed by the Fresno City Council Marvell French
Appointed July 2000
Term Continuous
Outside Member Appointed by Retirement Board
Tyler Kamalani
Elected September 2024
Term Expires June 2026
Represents Manual Worker Members
Kaleb Neufeld
Appointed March 2025
Term Continuous
Appointed by the Mayor and Confirmed by the Fresno City Council City of Fresno Employees Retirement System l INTRODUCTION Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 ix Retirement Office Staff
Administrative Services (From left to right)
Cecilia Lopez
Senior Administrative Clerk
Chad Jacobs
Investment Officer
Pattie Laygo
Retirement Office Manager
Robert T. Theller, Esq.
Retirement Administrator
Tracy Gonzales
Senior Customer Services Clerk
Gilberto Torentela
Senior Administrative Clerk
Financial Services (From left to right)
Alberto Magallanes
Retirement Accounting Manager
Kathleen Riley-Brown
Assistant Retirement Administrator
Kristina Espinoza
Accounting Technician
Cristina Jurado
Accountant Auditor II
Member Services (From left to right)
Andrea Ketch
Retirement Benefits Manager
Enia Leon
Retirement Counselor II
Yvonne Timberlake
Assistant Retirement Administrator
Erika Cortes
Retirement Counselor II
Machelle Smiley
Retirement Counselor II
Joan Taketa
Retirement Counselor II
City of Fresno Employees Retirement System l INTRODUCTION Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 x Administration of the System
Administration
The Administrative Section is responsible for the administration of the City of Fresno Employees Retirement System, including the risk management of the investment activities in accordance with the policies, regulations, and general guidelines of the Retirement Board. It is also responsible for interfacing with the investment managers, the investment consultant, the actuary, legal counsel, custodial bank, and any other consultants authorized by the Board. (See page xiii for professional services and consultants, page xiv for investment portfolio managers, and page 76 for a schedule of brokerage commissions, and investment manager fees by listed asset class.) Member Services
This section is responsible for providing all benefit services to the members of the System. This includes benefit calculations, investigation of claims for disability retirement, preparation of data to support applications for retirement, preparation of the retiree payroll, membership counseling, and membership training.
Financial Services
This section is responsible for planning, organizing and directing all fiscal activities of the Retirement Systems. This includes the preparation and publication of the Annual Financial Reports, monthly or quarterly financial report and information to the Board, and all other financial records and reports including financial statements, control and balancing of payroll and members' contributions and reconciliation of investments.
Investment Officer
This position is responsible for monitoring compliance with the Board’s Investment Objectives and Policy Statement and assists and coordinates in the management and administration of the System's investment program. This includes the planning and development of investment strategies.
Retirement Office Manager
This position is responsible for providing administrative and clerical support services for the Board and the retirement staff.
City of Fresno Employees Retirement System l INTRODUCTION Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 xi Organizational Structure
City of Fresno Employees Retirement System l INTRODUCTION Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 xii Professional Services and Consultants
Custodial Bank
NORTHERN TRUST
Chicago, Illinois
General Legal Advisor
SALTZMAN AND JOHNSON LAW CORPORATION
San Francisco, California
Legal Advisor
NOSSAMAN LLP
San Francisco, California
Tax Counsel
ICE MILLER LLP
Indianapolis, Indiana
Investment Legal Advisor
FOLEY & LARDNER LLP
Boston, Massachusetts
Investment Consultant
NEPC, LLC
Boston, Massachusetts
Actuary
THE SEGAL COMPANY
San Francisco, California
Medical Advisor
BENCHMARK, AN EXAMWORKS COMPANY, INC.
Sacramento, California
Independent Auditor
BROWN ARMSTRONG ACCOUNTANCY CORPORATION
Bakersfield, California
City of Fresno Employees Retirement System l INTRODUCTION Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 xiii Investment Portfolio Managers
EQUITY
Domestic Equity
Northern Trust Asset Management, Chicago, IL
International Equity
BlackRock, San Francisco, CA
Baillie Gifford & Co., Edinburgh, Scotland
Principal Global Investors, Des Moines, IA
Private Equity
Asia Alternatives Mgmt LLC, San Francisco, CA
Ocean Avenue Capital Partners, Santa Monica, CA
Pantheon Ventures, San Francisco, CA
Volta Energy Technologies, Naperville, IL
RATES/CREDIT
Core Fixed Income
Dodge & Cox, San Francisco, CA
Prudential Investment Mgmt., Inc., Newark, NJ
Private Debt/Credit
Arcmont Asset Mgmt, London, United Kingdom
Crescent Capital, Los Angeles, CA
Monroe Capital, Chicago, IL
PIMCO, Newport Beach, CA
REAL ASSETS
Core Real Estate
The Carlyle Group, Washington, D.C.
JP Morgan Asset Mgmt., New York, NY
Tristan Capital Partners, London, United Kingdom
Non-Core Real Estate
Alidade Capital, Bloomfield Hills, MI
Artemis Real Estate Partners, Chevy Chase, MD
Blue Vista Capital Management, Chicago, IL
Brookfield Asset Management, New York, NY
Kayne Anderson, Boca Raton, FL
Oaktree Capital Management, Los Angeles, CA
PCCP, LLC, Los Angeles, CA
PIMCO, Newport Beach, CA
Infrastructure
The Carlyle Group, Washington, D.C.
Grain Management, LLC, Washington, D.C.
JP Morgan IIF, New York, NY
Ullico UIF, Chicago, IL
MULTI-ASSETS
Alternative Credit
Cloverlay, Conshohocken, PA
Sixth Street/TAO, San Francisco, CA
City of Fresno Employees Retirement System l INTRODUCTION Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 xiv City of Fresno Employees Retirement System l INTRODUCTION Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 xv To protect and provide
system benefits through
the highest quality
delivery of service for our
members and the
employer, prudently
fulfilling our fiduciary
duties of investment and
conservation of Trust
assets.
FINANCIAL
2 Independent Auditor's Report
5 Management's Discussion and Analysis
18 Basic Financial Statements
20 Notes to the Basic Financial Statements
56 Required Supplementary Information
61 Other Supplementary Information
Independent Auditor’s Report
City of Fresno Employees Retirement System l FINANCIAL
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 2 Independent Auditor’s Report Continued
City of Fresno Employees Retirement System l FINANCIAL
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 3 Independent Auditor’s Report Continued
City of Fresno Employees Retirement System l FINANCIAL
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 4 Management's Discussion and Analysis
We are pleased to provide this overview and analysis of the financial activities of the City of Fresno Employees Retirement System (the System) for the fiscal years ended June 30, 2025 and 2024. We encourage readers to
consider the information presented here in conjunction
with additional information that we have furnished in the Letter of Transmittal beginning on page i of this report.
Financial Highlights
The System’s net position restricted for pension benefits is for payment of pension benefits to participants and their beneficiaries, and all of the net position is restricted to meet the System’s ongoing obligations.
At the close of the fiscal year 2025, the assets of the System exceed its current liabilities by $1,974,211,816; as of fiscal year-end 2024, the assets of the System exceeded its liabilities by $1,815,104,966; as of fiscal year 2023, the assets of the System exceeded its liabilities by
$1,683,312,950.
The System’s net position restricted for pension benefits increased by $159,106,850 or 8.77 percent for fiscal year 2025; increased by $131,792,016 or 7.83 percent for fiscal year 2024; and increased by $121,125,470 or 7.75 percent for fiscal year 2023, primarily as a result of the
performance of the investment markets.
The System’s funding objective is to meet long-term
benefit obligations through contributions and investment income. As of June 30, 2025, the date of the last actuarial valuation, the funded ratio for the System was 114.0
percent reflecting that the System has a valuation value of assets which is in excess of the actuarial accrued liability.
In general, this indicates that for every dollar of benefits due, we have approximately $1.14 of assets available for payment as of that date.
As of June 30, 2024, the date of the previous annual
actuarial valuation, the funded ratio for the System was 109.8 percent; and as of June 30, 2023, the funded ratio for the System was 111.1 percent.
Additions to Fiduciary Net Position
Additions for the fiscal year 2025 increased $33,820,672 or 15.56 percent over the prior year from $217,312,283 to $251,132,955, which includes employee contributions of
$20,771,353, employer contributions of $31,558,297, a
net investment gain of $198,700,192 and net securities
lending income of $103,113. The increase in additions for fiscal year 2025 was primarily driven by strong
performance in domestic and global investment markets.
Net investment income rose by $28,945,399, representing
85.6 percent of the total increase in additions of
$33,820,672.
Fiscal year 2024 additions increased $16,167,649 or 8.04 percent over the prior year from $201,144,634 to
$217,312,283, which included member contributions of
$18,833,018, employer contributions of $28,621,359, a
net investment gain of $169,694,000 and net securities lending income of $163,906. Additions in fiscal year
2024 increased primarily due to higher contributions. The employer contribution rate rose from 11.97% to 13.38%,
while the average member contribution rate increased
from 8.12% to 8.90%. These contribution increases
accounted for $10,323,924, representing 63.9 percent of the total increase in additions for fiscal year 2024.
City of Fresno Employees Retirement System l FINANCIAL
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 5 For fiscal year 2023 additions increased $296,260,331 or 311.47 percent over the prior year from $-95,115,697 to $201,144,634, which included member contributions of
$14,894,336, employer contributions of $22,236,117, a
net investment gain of $163,716,667 and net securities
lending income of $297,514. Additions in fiscal year
2023 were almost entirely driven by an increase in net
investment income. Strong performance in the investment markets contributed $296,639,065 to the increase in
additions from the prior year, while combined employer
and employee contributions declined by $378,734
compared to the previous year.
Deductions from Fiduciary Net Position
Deductions from fiduciary net position for the fiscal year 2025 increased $6,505,838 or 7.61 percent over the prior fiscal year from $85,520,267 to $92,026,105. The
increase in deductions for the current year was primarily due to growth in the number of retirees and the
corresponding retirement benefits paid in 2025. Retiree benefits rose by $5,661,914, representing 87.0 percent of the total increase in deductions. Refunds and
administrative expenses increased by $545,275 and
$298,649, respectively, in fiscal year 2025.
Fiscal year 2024 deductions increased $5,501,103 or 6.87 percent over the prior fiscal year 2023 from $80,019,164 to $85,520,267. In fiscal year 2024, the rise in deductions was largely attributed to an increase in the retiree
population and the associated benefit payments.
Retirement benefits grew by $5,530,913. Refunds
decreased by $202,022, while administrative costs
increased by $172,212.
Fiscal year 2023 deductions increased $6,084,928 or 8.23 percent over the prior fiscal year 2022 from $73,934,236 to $80,019,164. Refunds and administrative expenses rose by $203,360 and $96,008, respectively, contributing to the overall increase in deductions for fiscal year 2023. The primary driver, however, was the growth in retirement
benefit payments, which totaled $5,785,560 and
accounted for 95.1 percent of the year’s total deduction increase. This reflects the impact of a growing retiree population and the benefits paid during the year.
City of Fresno Employees Retirement System l FINANCIAL
Management's Discussion and Analysis Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 6 Schedule and Graph of Additions By Source
For Fiscal Years Ended June 30, 2025, 2024 and 2023 (In Thousands) 2023 2024 2025
Employer Contributions $ 22,236 $ 28,621 $ 31,558
Employee Contributions 14,894 18,833 20,771
Net Investment Income (Loss) 164,015 169,858 198,804
TOTAL $ 201,145 217,312 $ 251,133
Employer Contributions Employee Contributions
Net Investment Income (Loss)
2023 2024 2025
$0
$40,000
$80,000
$120,000
$160,000
$200,000
$240,000
$280,000
City of Fresno Employees Retirement System l FINANCIAL
Management's Discussion and Analysis Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 7 Schedule and Graph of Deductions By Type
For Fiscal Years Ended June 30, 2025, 2024 and 2023 (In Thousands) 2023 2024 2025
Benefit Payments $ 76,025 $ 81,556 $ 87,218
PRSB — — —
Refunds of Contributions 1,849 1,647 2,192
Administrative Expenses 2,145 2,317 2,616
TOTAL $ 80,019 $ 85,520 $ 92,026
Administrative Expenses Refunds of Contributions
PRSB Benefit Payments
2023 2024 2025
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
$100,000
City of Fresno Employees Retirement System l FINANCIAL
Management's Discussion and Analysis Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 8 Overview of the Financial Statements
The following discussion and analysis are intended to
serve as an introduction to the System’s financial
statements, which are comprised of these components:
Statement of Fiduciary Net Position – The
Statement of Fiduciary Net Position presents the major
categories of assets and liabilities and their related value as of the System’s fiscal years ended June 30, 2025 and 2024. “Net Position Restricted for Pension Benefits”
represents funds available to pay benefits, and it is a point in time or a snapshot of account balances as of the fiscal year-end. It indicates the assets available for future payments to retirees and any current liabilities. Increases and decreases in Net Position Restricted for Pension
Benefits, when analyzed over time, may serve as an
indicator of whether the System’s financial position is improving or deteriorating. Other factors, such as market conditions, should also be considered in measuring the
System’s overall health.
Statement of Changes in Fiduciary Net Position
– The Statement of Changes in Fiduciary Net Position
provides information about the financial activities during the reporting period that increased and decreased the Net Position Restricted for Pension Benefits.
The two statements above include all assets and liabilities, using the full accrual basis of accounting, which is similar to the accounting method used by most private sector
companies. All of the current year’s additions and
deductions are taken into account regardless of when the cash is received or paid. All investment gains and losses are shown at trade date, not settlement date. In addition, both realized and unrealized gains and losses are shown on investments.
Both statements are in compliance with Governmental
Accounting Standards Board (GASB) Pronouncements.
These pronouncements require certain disclosures and
require State and Local governments to report using the full accrual basis of accounting. The System complies
with all material requirements of these pronouncements.
Notes to the Basic Financial Statements - The
Notes to the Basic Financial Statements are an integral part of the basic financial statements and provide
additional information that is essential to acquire a full understanding of the information and data provided in the two statements discussed above. The notes include
further discussion and details regarding the System’s key policies, programs, investments and activities that
occurred during the year.
Required Supplementary Information – The
Required Supplementary Information presents historical
trend information concerning the changes in net pension liability, employer contributions and investment returns, and includes notes that explain factors that significantly affect trends in the amounts reported, such as changes of benefit terms, changes in the size or composition of the population covered by the benefit terms, or the use of
different assumptions over time. The information is based on actuarial valuations prepared for the pension plan. The actuarial valuation report includes additional actuarial information that contributes to the understanding of the changes in the net pension liability of the defined benefit pension plan over the past ten years as presented in the schedule. The actuarial information is based upon
assumptions made regarding future events at the time the valuations are performed and is derived for both financial reporting and funding purposes.
City of Fresno Employees Retirement System l FINANCIAL
Management's Discussion and Analysis Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 9 Other Supplementary Information – The Other
Supplementary Information, presented immediately
following the required supplementary information,
includes schedules pertaining to the System’s
administrative expenses, investment management fees and other investment related expenses, and payments to
consultants and other professional services providers.
The System’s funding ratio at June 30, 2025, was 114.0
percent, which means the System’s fund has
approximately $1.14 available for each $1.00 of liability.
The Statement of Fiduciary Net Position and the
Statement of Changes in Fiduciary Net Position report
information about the System’s financial activities during the reporting periods that increased and decreased the Net Position Restricted for Pension Benefits.
Financial Analysis Net Position
As previously noted, net position restricted for pension benefits may serve over time as a useful indication of the System’s financial position. The System's assets
exceeded its liabilities at the close of the fiscal year 2025 by $1,974,211,816. All of the net position is restricted to meet the System’s ongoing obligations to plan
participants and their beneficiaries.
In fiscal year 2025, the System’s restricted fiduciary net position, representing assets available to pay current and future member pension benefits, increased by 8.77 percent due to strong performance of the investment markets;
while in 2024, the System’s restricted fiduciary net
position increased by 7.83 percent due to strong
performance of the global investment markets (See Table 1); and also, due to strong investment performance in
2023, the System’s restricted fiduciary net position
increased by 7.75 percent.
In order to determine whether the $1.974 billion in net position will be sufficient to meet future obligations, the System’s independent actuary performed an actuarial
valuation as of June 30, 2025. The result of this valuation determines what future contributions by plan members
and the City of Fresno are needed to pay all expected
future benefits. The valuation takes into account the
Retirement Board’s (the Board) funding policy which
includes a provision to smooth the impact of market
volatility by spreading each year’s gains or losses over five years.
There has been extreme volatility in the various
economies of the world and throughout the global
financial markets over the past twenty to twenty-five
years, therefore, it is of utmost importance to examine the System’s investment returns with a long-term view rather than a short-term focus which tends to distort the
perception of how well the investments have actually
performed.
Historical long-term performance rates of returns
demonstrate that the System has been able to meet or
exceed its actuarial assumed rate of return of 6.75 percent over long periods. As of June 30, 2025, the System’s 25- year annualized return is 6.87 percent and its 20-year
annualized return is 7.57 percent.
Despite volatility in the stock market, management and
the System’s actuary concur that the System remains in a very strong financial position to meet its obligations to the plan participants and beneficiaries. The System’s current financial position is a result of a very sound and carefully managed investment and risk management program.
City of Fresno Employees Retirement System l FINANCIAL
Management's Discussion and Analysis Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 10 Table 1 – Employees Retirement System Fiduciary Net Position Restricted For Pension Benefits
As of June 30, 2025, 2024 And 2023
FY 2025 FY 2025
FY 2025 FY 2024
Increase/
(Decrease)
Amount
Increase/
(Decrease)
Percent
Current and Other Assets $ 33,833,339 $ 33,186,136 $ 647,203 1.95% Investments at Fair Value 1,972,055,839 1,813,865,588 158,190,251 8.72% Total Assets $ 2,005,889,178 $ 1,847,051,724 $ 158,837,454 8.60% Total Liabilities 31,677,362 31,946,758 (269,396) (0.84%) Net Position Restricted for Pension Benefits $ 1,974,211,816 $ 1,815,104,966 $ 159,106,850 8.77% FY 2024 FY 2024
FY 2024 FY 2023
Increase/
(Decrease)
Amount
Increase/
(Decrease)
Percent
Current and Other Assets $ 33,186,136 $ 47,692,664 $ (14,506,528) (30.42%) Investments at Fair Value 1,813,865,588 1,684,557,828 129,307,760 7.68% Total Assets $ 1,847,051,724 $ 1,732,250,492 $ 114,801,232 6.63% Total Liabilities 31,946,758 48,937,542 (16,990,784) (34.72%) Net Position Restricted for Pension Benefits $ 1,815,104,966 $ 1,683,312,950 $ 131,792,016 7.83% Total Assets Total Liabilities
FY 2025 FY 2024 FY 2023
$0
$500,000,000
$1,000,000,000
$1,500,000,000
$2,000,000,000
City of Fresno Employees Retirement System l FINANCIAL
Management's Discussion and Analysis Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 11 Capital Assets
The System’s investment in capital assets decreased from $211,960 to $76,145 (net of accumulated depreciation)
between fiscal years 2024 and 2025 after decreasing from $347,021 to $211,960 (net of accumulated depreciation)
between fiscal years 2023 and 2024. This investment in capital assets includes office equipment, furniture,
software, and technology infrastructure. The total
decrease in the System's investment in capital and
intangible capital assets as of June 30, 2025 and 2024 was attributed to the disposal of capital assets no longer of service and the annual depreciation expense which netted to $(135,815) and $(135,061), respectively. These
changes in both fiscal years were primarily due to the
costs and associated depreciation incurred for the
development of software to program and install an
upgrade to our original pension administration system that was originally installed in 1997, which was implemented effective July 1, 2015. For additional, more detailed, information related to the System's capital assets, please refer to Note 13 - Capital Assets on page 53.
Reserves
Reserves are not required, nor recognized, under
accounting principles generally accepted in the United
States of America (GAAP). The reserves are not shown
separately on the Statement of Fiduciary Net Position, but they equate to, and are accounts within, the net position restricted for pension benefits and are vital to the
System’s operations. They are established from
contributions and the accumulation of investment income, after satisfying investment and administrative expenses.
Investments of the System are stated at fair value instead of at cost, which includes the recognition of unrealized gains and losses in the current period.
The System’s major reserve accounts, described in Note 6 – Net Position Restricted for Pension Benefits, include Active Member (Employee) Reserves, Employer
Advance/Retired Reserves, DROP Reserves, PRSB
Reserves and City Surplus (Deficit) Reserves.
Deferred Retirement Option Program (DROP) Reserves
represent funds reserved for Deferred Retirement Option Program benefits accumulated by active members and
retirees. DROP is an alternate method of receiving
retirement benefits. It is a voluntary program as described by the conditions and requirements of the City of Fresno Municipal Code Section 3-566. A DROP account is a
nominal, bookkeeping account established within the
System for each DROP participant. Monthly amounts
credited to DROP accounts include an amount which
represents the service retirement allowance which the
member would have received if the member had retired
on the date the member commenced DROP participation
and interest credited at the five-year average interest rate as adopted by the Retirement Board (the Board) in
accordance with the City of Fresno Municipal Code
requirements.
City of Fresno Employees Retirement System l FINANCIAL
Management's Discussion and Analysis Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 12 Post Retirement Supplemental Benefit (PRSB) Reserves
represent surplus earnings that have been allocated but not distributed to eligible participants in accordance with the City of Fresno Municipal Code Section 3-567. PRSB is a supplemental benefit distributed to eligible participants in accordance with the City of Fresno Municipal Code
Section 3-567, if and only if distributable actuarial surplus is available to provide such a benefit. Actuarial surplus means the amount by which the actuarial value of the
System’s assets exceeds one hundred and ten percent
(110%) of the System’s actuarial accrued liabilities. The PRSB Reserves account was exhausted at the end of
December 2013.
City Surplus (Deficit) Reserves represent that portion of distributable actuarial surplus that has been allocated but not used as a reduction to offset or eliminate the City of Fresno’s (the City) pension contributions in accordance with the conditions and requirements of Municipal Code
Section 3-567 Post Retirement Supplemental Benefits.
The City Surplus (Deficit) Reserves account accrues
interest at the average gross rate of return earned by the System’s entire investment portfolio for each of the three prior fiscal years, including realized and unrealized gains and losses and as reduced by all investment related
expenses.
Table 2 shows that the vast majority of reserves are
generated from Employer Advance/Retired Reserves.
DROP Reserves represent funds credited for participants who elected to participate in the Deferred Retirement
Option Program. PRSB Reserves present that portion of
distributable actuarial surplus that has been allocated for PRSB but not yet distributed to eligible participants.
Additions to and deductions from PRSB occur when
surpluses and allocations occur, respectively. The City Surplus (Deficit) reserves represent that portion of
distributable actuarial surpluses and accrued interest, reduced by required City normal pension contributions. In addition, these reserves also include the negative balance that reflects shortfalls in employer and member
contributions. These shortfalls arise when the City adopts contribution rates below the board- approved, actuarially determined rates.
The City Surplus (Deficit) Reserves account shows a
negative balance for the fiscal years 2025, 2024 and 2023.
The negative balances are due to the changes in surplus allocations available to the City for offsetting the City’s contributions for fiscal years 2025, 2026 and 2027. The City’s normal contribution rates for fiscal years 2025 and 2024 also included adjustments for economic and non-
economic actuarial assumption changes.
City of Fresno Employees Retirement System l FINANCIAL
Management's Discussion and Analysis Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 13 Table 2 – Employees Retirement System’s Reserves
As of June 30, 2025, 2024 and 2023 (In Thousands)
FY 2025 FY 2024 FY 2023
Employer Advance/Retired Reserves $ 1,630,570 $ 1,488,300 $ 1,376,856 Active Member (Employee) Reserves 172,119 155,954 139,691 DROP Reserves 174,810 171,142 166,976
PRSB Reserves — — —
City Surplus (Deficit) Reserves (3,287) (291) (210)
Net Position Restricted for Pension Benefits $ 1,974,212 $ 1,815,105 $ 1,683,313 FY 2025 FY 2024 FY 2023
Employer Adv/
Ret
Active Member
(Employee)
DROP PRSB City Surplus
$-250,000
$0
$250,000
$500,000
$750,000
$1,000,000
$1,250,000
$1,500,000
$1,750,000
City of Fresno Employees Retirement System l FINANCIAL
Management's Discussion and Analysis Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 14 System’s Activities
Attributable in part to the continued growth and volatility in global economic and financial markets, the System’s
net position increased $159,106,850 for the fiscal year 2025, resulting in an 8.77 percent increase in the fiduciary net position restricted for pension benefits for the fiscal year ended June 30, 2025. The System’s fiduciary net
position increased $131,792,016 for the fiscal year 2024, resulting in a 7.83 percent increase in the fiduciary net position restricted for pension benefits for the fiscal year ended June 30, 2024, primarily attributable to the growth in the global financial markets. In fiscal year 2023, the System’s fiduciary net position increased $121,125,470
resulting in a 7.75 percent increase in the fiduciary net position restricted for pension benefits for the fiscal year ended June 30, 2023.
Key elements of the additions to and deductions from
Fiduciary Net Position for fiscal years 2025, 2024 and
2023 are described in the sections below.
Additions to the System’s Fiduciary Net
Position
The reserves needed to finance retirement benefits are
normally accumulated through the collection of employer and employee contributions and through earnings of
investment income net of investment expense. Total
additions to the System's fiduciary net position for the fiscal year ended June 30, 2025 totaled $251,132,955.
For the fiscal year ended June 30, 2025, overall additions had increased by $33,820,672 or 15.56 percent primarily due to the performance of the investment markets. For
fiscal year 2024, overall additions had increased by
$16,167,649 or 8.04 percent from the prior year; and for fiscal year ended June 30, 2023, primarily due to the
performance of the investment markets and changes in
actuarial assumptions, overall additions had increased by $296,260,331 or 311.47 percent from the prior fiscal year.
The investment section of this report reviews the details of the results of investment activity for the fiscal year ended June 30, 2025.
Deductions from the System’s Fiduciary Net
Position
The System was created to provide lifetime retirement
annuities, survivor benefits and permanent disability
benefits to qualified members and their beneficiaries. The cost of such programs includes recurring benefit
payments, as designated by the System, refunds of
contributions to terminated employees, and the cost of
administering the System.
Deductions from the fiduciary net position for the fiscal year ended June 30, 2025, totaled $92,026,105 which was an increase of $6,505,838 or 7.61 percent over the prior fiscal year 2024. Deductions from the fiduciary net
position for the fiscal year ended June 30, 2024, totaled $85,520,267 which was an increase of $5,501,103 or 6.87 percent over the prior fiscal year 2023. The fiscal year ending June 30, 2023 had deductions from the fiduciary net position totaling $80,019,164, which was an increase of $6,084,928 or 8.23 percent over the prior fiscal year 2022. The increase in benefits paid resulted primarily from an increase in the amount of benefit payments due to the number of retirees from the prior year.
The System’s increases in total deductions have closely paralleled inflation and are reflective of the membership and services provided. The System has consistently met
its Administrative Budget. There are no material
variances between planned expenses and actual expenses.
City of Fresno Employees Retirement System l FINANCIAL
Management's Discussion and Analysis Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 15 Changes in Fiduciary Net Position (Condensed)
For Fiscal Years Ended June 30, 2025, 2024 and 2023
FY 2025 FY 2025
Increase/
(Decrease)
Increase/
(Decrease)
FY 2025 FY 2024 Amount Percent
Additions:
Employer Contributions $ 31,558,297 $ 28,621,359 $ 2,936,938 10.26% Employee Contributions 20,771,353 18,833,018 1,938,335 10.29% Net Investment Income (Loss)* 198,803,305 169,857,906 28,945,399 17.04% Total Additions $ 251,132,955 $ 217,312,283 $ 33,820,672 15.56% Deductions:
Retiree Benefit Payments $ 87,217,530 $ 81,555,616 $ 5,661,914 6.94% Post Retirement Supplemental Benefit (PRSB) — — — —% Refunds of Contributions 2,191,848 1,646,573 545,275 33.12% Administrative Expenses 2,616,727 2,318,078 298,649 12.88% Total Deductions $ 92,026,105 $ 85,520,267 $ 6,505,838 7.61% Changes in Net Position 159,106,850 131,792,016 27,314,834 20.73% Net Position Restricted for Pension Benefits
Beginning of the Year 1,815,104,966 1,683,312,950 131,792,016 7.83% End of the Year $ 1,974,211,816 $ 1,815,104,966 $ 159,106,850 8.77% * Net of investment expense of $33,587,530 and $35,663,820 for June 30, 2025 and 2024, respectively.
FY 2024 FY 2024
Increase/
(Decrease)
Increase/
(Decrease)
FY 2024 FY 2023 Amount Percent
Additions:
Employer Contributions $ 28,621,359 $ 22,236,117 $ 6,385,242 28.72% Employee Contributions 18,833,018 14,894,336 3,938,682 26.44% Net Investment Income (Loss)* 169,857,906 164,014,181 5,843,725 3.56% Total Additions $ 217,312,283 $ 201,144,634 $ 16,167,649 8.04% Deductions:
Retiree Benefit Payments $ 81,555,616 $ 76,024,703 $ 5,530,913 7.28% Post Retirement Supplemental Benefit (PRSB) — — — —% Refunds of Contributions 1,646,573 1,848,595 (202,022) (10.93%) Administrative Expenses 2,318,078 2,145,866 172,212 8.03% Total Deductions $ 85,520,267 $ 80,019,164 $ 5,501,103 6.87% Changes in Net Position 131,792,016 121,125,470 10,666,546 8.81% Net Position Restricted for Pension Benefits
Beginning of the Year 1,683,312,950 1,562,187,480 121,125,470 7.75% End of the Year $ 1,815,104,966 $ 1,683,312,950 $ 131,792,016 7.83% * Net of investment expense of $35,663,820 and $26,691,439 for June 30, 2024 and 2023, respectively.
City of Fresno Employees Retirement System l FINANCIAL
Management's Discussion and Analysis Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 16 City of Fresno Employees Retirement System l FINANCIAL
Management's Discussion and Analysis Continued
System’s Fiduciary Responsibilities
The System’s Board and management staff are fiduciaries of the pension trust fund. Under the California Constitution, the assets must be used exclusively for the benefit of plan participants and their beneficiaries.
Requests for Information
This financial report is designed to provide the Retirement Board, our membership, taxpayers, investment managers, and creditors with a general overview of the City of Fresno Employees Retirement System’s finances, and to show accountability for the funds it receives. Questions concerning any of the information provided in this report, or requests for additional financial information, should be addressed to:
City of Fresno Employees Retirement System
2828 Fresno Street Suite 201
Fresno, California 93721-1327
Respectfully submitted,
Robert T. Theller
Robert T. Theller, Esq.
Retirement Administrator
December 3, 2025
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 17 Basic Financial Statements
Statement of Fiduciary Net Position
As of June 30, 2025 and 2024
2025 2024
ASSETS
Cash (Note 8) $ 628,680 $ 545,336
Collateral Held for Securities Lent (Note 10) 21,744,609 24,737,950 Receivables
Receivables for Investments Sold 8,489,890 5,004,319
Interest and Dividends 1,863,264 1,868,313
Other Receivables 979,644 713,143
Total Receivables $ 11,332,798 $ 7,585,775
Prepaid Expenses — —
Total Current Assets $ 33,706,087 $ 32,869,061
Investments at Fair Value and NAV (Notes 7 and 8)
Domestic Equities 488,146,784 441,275,085
International Equities 384,295,334 354,893,134
Private Equity 154,513,736 131,684,368
Fixed Income 245,703,554 224,246,610
Private Debt/Credit 236,605,223 243,292,717
Real Assets 413,794,591 382,654,714
Multi-Assets 40,163,759 29,104,101
Short-Term Investments 8,832,858 6,714,859
Total Investments $ 1,972,055,839 $ 1,813,865,588
Capital Assets Net of Accumulated Depreciation (Note 13) 76,145 211,960 Other Assets 51,107 105,115
Total Assets $ 2,005,889,178 $ 1,847,051,724
LIABILITIES
Collateral Held for Securities Lent (Note 10) 21,744,609 24,737,950 Payable for Investments Purchased 7,905,520 5,644,357 Other Liabilities 1,041,510 852,450
Payable for Foreign Currency Purchased 985,723 712,001 Total Liabilities $ 31,677,362 $ 31,946,758
Net Position Restricted for Pension Benefits (Note 6) $ 1,974,211,816 $ 1,815,104,966 The accompanying notes to the basic financial statements on pages 20 - 55 are an integral part of this statement.
City of Fresno Employees Retirement System l FINANCIAL
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 18 Statement of Changes in Fiduciary Net Position
For Fiscal Years Ended June 30, 2025 and 2024
2025 2024
ADDITIONS
Contributions (Note 3)
Employer $ 31,558,297 $ 28,621,359
Employee 20,771,353 18,833,018
Total Contributions $ 52,329,650 $ 47,454,377
Investment Income (Loss)
Net Appreciation/(Depreciation) in Fair Value of Investments 215,446,297 189,059,116 Interest 9,226,825 8,547,058
Dividends 6,059,780 6,266,693
Other Investment Related Income 82,796 126,348
Total Investment Income (Loss) 230,815,698 203,999,215 Less: Investment Expense (32,115,506) (34,305,215)
Total Net Investment Income (Loss) $ 198,700,192 $ 169,694,000 Securities Lending Income
Securities Lending Earnings (Note 10) 1,575,137 1,522,511 Less: Securities Lending Expense (1,472,024) (1,358,605) Total Net Securities Lending Income $ 103,113 $ 163,906 Total Additions $ 251,132,955 $ 217,312,283
DEDUCTIONS
Benefit Payments 87,217,530 81,555,616
Post Retirement Supplemental Benefits (Note 12) — —
Refunds of Contributions 2,191,848 1,646,573
Administrative Expense 2,616,727 2,318,078
Total Deductions $ 92,026,105 $ 85,520,267
Changes in Net Position $ 159,106,850 $ 131,792,016
NET POSITION RESTRICTED FOR PENSION BENEFITS
BEGINNING OF YEAR $ 1,815,104,966 $ 1,683,312,950
END OF THE YEAR $ 1,974,211,816 $ 1,815,104,966
The accompanying notes to the basic financial statements on pages 20 - 55 are an integral part of this statement.
City of Fresno Employees Retirement System l FINANCIAL
Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 19 Notes to the Basic Financial Statements
1 Significant Provisions of the
Retirement System
The City of Fresno Employees Retirement System (the
System) was established on June 1, 1939, under Charter
Section 910 and is governed by Article 5 of Chapter 3 of the City of Fresno Municipal Code. The System is a
single-employer, contributory, defined benefit plan. The System provides lifetime retirement, disability, and death benefits to the non-safety members employed by the City of Fresno (the City), including substantially all full-time employees, other than sworn officers of the Fire and
Police Departments.
The System is administered by the Employees Retirement
Board (Board) which operates under the authority vested in Article 5 of Chapter 3 of the City of Fresno Municipal Code and the California Pension Protection Act of 1992
which provides that “the members of the Retirement
Board of a public retirement system shall discharge their duties…solely in the interest of, and for the exclusive purpose of providing benefits to participants and their beneficiaries, minimizing employer contribution thereto, and defraying reasonable expenses of administering the
System.”
The Employees Retirement Board does not operate under
the control of the City Council. The Board has the sole and exclusive responsibility to administer the System in a manner that will assure prompt delivery of benefits and related services to the members and their beneficiaries.
Fiduciary oversight of the Employees Retirement System
is vested with the Board, which consists of five (5)
members: two (2) management employees who are
appointed by the Mayor and confirmed by the City
Council, one (1) employee who is elected by the manual
workers of the System, and one (1) employee who is
elected by the clerical or supervisory workers of the
System; both elected members serve a four-year term. The fifth and final member of the Board is a qualified elector of the County of Fresno, not connected with its
government, elected by the previously designated four
members and serves at the pleasure of the Board.
The Board, in conjunction with the Fire and Police
Retirement Board, appoints, directs and oversees a
Retirement Administrator. The Retirement Administrator
is responsible for the overall management and
administration of the Employees and Fire and Police
Retirement Systems in accordance with the direction,
policy and goals set by the Boards and for providing
highly responsible and complex administrative support to the Boards. The Retirement Administrator serves at the
pleasure of the Boards.
Working closely with the Boards, the Retirement
Administrator and his staff develop investment and
benefits policies, coordinate member services and
programs, and develop long-term strategies that fulfill the Systems’ mission and goals.
The Board oversees the Retirement Administrator and
staff in the performance of their duties in accordance with the City of Fresno Municipal Code and the Board’s Rules, Regulations and Policies.
City of Fresno Employees Retirement System l FINANCIAL
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 20 Membership and Benefit Eligibility
All permanent full-time employees of the City of Fresno, except sworn Fire and Police personnel, are eligible to participate in the plan. Employees become eligible for
membership on their first day of regular employment, and members become fully vested after earning 5 years of
service credit.
Total participants of the System were comprised
as follows at June 30, 2025 and 2024:
2025 2024
Active Members
Vested 1,461 1,458
Non-Vested 1,591 1,509
Total Active Members 3,052 2,967
Retirees and Beneficiaries of Deceased
Retirees, Currently Receiving Benefits 2,344 2,303
Inactive Vested Members 253 240
Total Retirees, Beneficiaries,
and Inactive Members 2,597 2,543
Grand Total 5,649 5,510
Benefit Provisions
The System provides retirement allowances and other
benefits such as disability and death benefits to the non- safety members employed by the City of Fresno.
The retirement (pension) benefits the member will receive are based upon a combination of age at retirement, years of credited service, final average monthly salary, and the distribution option selected by the participant.
Members' contributions, including interest, are 100
percent vested at all times. Employer contributions do not become vested until completion of 5 years of credited
service when the member becomes 100 percent vested,
but are not payable until the member attains the age of 55.
Effective January 28, 2008, members may retire between
age 50-55 with an actuarially equivalent service
retirement benefit.
Member Retirement Benefits
Members are eligible for service retirement benefits upon completion of at least five years of service, upon
termination of service, if they have left contributions and interest with the System and are at least age 55. Or
Members may retire upon written application to the
Retirement Board provided that the Member is credited
with five years of continuous service and has attained age fifty and consents in writing to the early retirement benefit reduction. Members may also be eligible for service
retirement benefits if they have less than five years of service with the City of Fresno, but have established
reciprocity with a prior employer and are eligible to retire from that agency.
The service retirement benefit is calculated pursuant to the provisions of Section 3-541 of the City of Fresno
Municipal Code. The monthly allowance for a member is
equal to 2 percent of final compensation times each of the first 25 years of accrued retirement service credit plus 1 percent of final compensation times any years of accrued retirement service credit in excess of 25 years, multiplied by the age factor at retirement age.
Final average compensation consists of the highest
average consecutive 36 months of compensation earnable, calculated using the rate of pay in effect at the time of retirement.
The member may elect an unmodified retirement
allowance, or choose an optional retirement allowance.
The unmodified retirement allowance provides the highest monthly benefit and a 50% continuance to an eligible
surviving spouse or domestic partner. An eligible
City of Fresno Employees Retirement System l FINANCIAL
Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 21 surviving spouse is one married to the member one year
prior to the effective retirement date for members retiring on or before the effective date (February 10, 2000) of
Ordinance No. 2000-5. For members retiring after the
effective date of Ordinance 2000-5, an eligible surviving spouse or domestic partner is one married to or registered with the member on or before the date of retirement.
There are four optional retirement allowances the member may choose. Each of the optional retirement allowances
requires a reduction in the unmodified retirement
allowance in order to allow the member the ability to
provide certain benefits to a surviving spouse, domestic partner, or named beneficiary having an insurable interest in the life of the member.
Deferred Retirement Option Program
(DROP)
DROP is an optional voluntary program that allows a
member to have his or her retirement benefits deposited in a special account within the System while the member
continues to work in his or her current position. It is a voluntary method of receiving a distribution of retirement benefits; it is not an additional retirement benefit.
DROP may not be beneficial to all members. Each
member must determine how the DROP option will affect
the member’s retirement benefits prior to making an
election to enter the DROP.
The member’s retirement benefits are determined as of
the date of entry into the DROP option and accumulate in the member’s DROP account while the member continues
to work. Members entering DROP after January 27,
2011, in accordance with ordinances that amended
sections of the City of Fresno Municipal Code, continue making employee contributions.
Eligibility: Any member who is eligible for a service
retirement and is age 55 (or age 50 for an early retirement reduced benefit) with a minimum of 5 years of service.
Participation Period: The maximum participation period is ten years. Because the participation period cannot be
extended, the member must retire at its conclusion;
however, the member may end participation in DROP and
terminate employment with the City and begin retirement at any time prior to the end of the ten-year period.
DROP Account: A DROP account is set up for each
participant; the monthly amount credited to DROP
accounts include an amount which represents the service retirement allowance which the member would have
received if the member had retired on the date the
member commenced DROP participation. Interest is also
credited to the DROP account monthly at a rate which is set annually by the Retirement Board. The rate is based on the prior five-year moving average of net market
returns of the System's investments in accordance with the City of Fresno Municipal Code requirements. The Board
is authorized to reduce the annual interest crediting rate up to 3 percent, if necessary, to maintain DROP’s cost
neutrality.
A DROP account is a nominal, bookkeeping account
established within the System for each DROP participant.
Upon termination of DROP participation and retirement
from the City, a member receives the amounts credited to their DROP account, including interest. In addition, the member will also begin receiving his or her monthly
retirement allowance in the amount being credited to their DROP account. The member may select a method of
withdrawing the money from their DROP account from
the options provided.
City of Fresno Employees Retirement System l FINANCIAL
Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 22 DROP Reserves, which represent funds reserved for
DROP benefits accumulated by active members and
retirees, were $174,809,842 and $171,141,577 as of June 30, 2025 and 2024, respectively.
Terminated Member Benefits
If a member terminates before earning five years of
credited service, the member forfeits the right to receive his or her service retirement benefit and is entitled to withdraw refundable contributions made, together with
accumulated interest. If the member enters a reciprocal retirement system within 180 days (6 months) of
terminating employment with the City of Fresno and
elects to leave their accumulated contributions on deposit with the System, then the member will receive a deferred retirement allowance when eligible.
Death and Disability Benefits
Death benefits are based upon whether the death occurred before or after retirement. Disability benefits are based upon whether the member has at least ten years of
credited service, over or under age 55 and whether the
permanent incapacity is found to be service or non-service connected.
Cost-of-Living Benefits
Cost-of-living adjustment (COLA) increases for retirees under the Employees Retirement System are provided for
in the Municipal Code, and are determined by annual
changes in the Consumer Price Index (CPI) for each of
the two immediately preceding calendar years. Retirement staff research the percentage change in CPI (United States city average for urban wage earners and clerical workers – all items) and propose that percent to the Retirement
Board as the COLA to be adopted for the following fiscal year. This procedure is completed by the end of April
each year for implementation in July. The COLA is
limited to a five percent (5.00%) maximum change per
year and any excess over 5.00 percent is banked for the retiree for use in a year where the percent of CPI change is negative.
The Board adopted the annual COLA, pursuant to Section
3-553(b) of 2.8 percent, effective July 1, 2024 for fiscal year 2025, and 3.3 percent, effective July 1, 2023 for
fiscal year 2024.
2 Summary of Significant
Accounting Policies
Reporting Entity
The City of Fresno Employees Retirement System (the
System) was established on June 1, 1939, under Charter
Section 910 and is governed by Article 5 of Chapter 3 of the City of Fresno Municipal Code. The System is a
single-employer, contributory, defined benefit plan. The sole employer and primary government of the plan is the City of Fresno. All permanent full-time employees of the City of Fresno, except sworn Fire and Police personnel, are eligible to participate in the plan.
The Retirement System, with its own governing board, is an independent governmental entity separate and distinct from the City of Fresno. The System’s annual financial statements are included in the City of Fresno Annual
Comprehensive Financial Report as a pension trust fund.
Basis of Accounting
The System’s financial statements are prepared using the accrual basis of accounting and in accordance with
accounting principles generally accepted in the United
States of America (GAAP), under which revenues are
recognized when earned and deductions are recorded
when the liability is incurred. Employer and employee
contributions are recognized as revenue when due.
Contributions are recorded in the period the related
salaries are earned and become measurable. Investment
income is recognized when it is earned. The net
City of Fresno Employees Retirement System l FINANCIAL
Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 23 appreciation in fair value of investments held by the
System is recorded as an increase to investment income
based on the valuation of investments at fiscal year-end, which includes both realized and unrealized gains and
losses on investments. Retirement benefits and refunds
are recognized when due and payable under the terms of
the plan as defined in Sections 3-534 and 3-538 of the
City of Fresno Municipal Code. Other expenses are
recognized when the corresponding liabilities are
incurred.
Securities lending transactions are accounted for in
accordance with Governmental Accounting Standards
Board (GASB) Statement No. 28, Accounting and
Financial Reporting for Securities Lending Transactions, which establishes reporting standards for securities
lending transactions. In accordance with GASB Statement No. 28, cash received as collateral on securities lending transactions and investments made with that cash are
reported as assets and liabilities, and the results from these transactions are reported in the Statement of
Fiduciary Net Position. In addition, the costs of securities lending transactions are reported as an expense in the
Statement of Changes in Fiduciary Net Position.
Investments
The System is authorized by the City of Fresno Municipal Code and the policies of the Retirement Board to invest in any form or type of investment deemed prudent by the
Board and does so through its Investment Objectives and Policy Statement which establishes and outlines the
responsibilities of the various parties that are associated with managing assets of the Retirement System,
consistent with applicable sections of the Municipal Code, Federal laws and Article XVI, Section 17(c) of the
Constitution of the State of California which provides that “the member of the Retirement Board of a public pension or retirement system shall discharge their duties…with the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent person acting in a like capacity and familiar with these matters would use in the conduct of an enterprise of a like character and with like aim.”
System investments are reported at fair value. Fair value is the amount that the System can reasonably expect to
receive for an investment in a current sale between a
willing buyer and seller, that is, other than in a forced or liquidation sale. Fair value for investments of publicly traded securities is stated at fair value based upon closing sales prices reported on recognized securities exchanges on the last business day of the period or, for listed
securities having no sales reported and for unlisted
securities, based upon last reported bid prices. All
purchases and sales of securities are accounted for on a trade date basis and dividends declared but not received are accrued on the ex-dividend date. Short-term
investments are reported at cost, which approximates fair value. Securities traded on a national or international exchange are valued at the last reported sales price at current exchange rates. Investments in both bonds and
mortgage-backed pass-through certificates are carried at fair value.
Cost values, as shown, are derived from Master Custodial Transaction Records. The fair value of real estate
investments is based on independent appraisals.
Investments that do not have an established market are
reported at estimated fair values.
The asset allocation policy set by the Board, in
conjunction with the Fire and Police Retirement Board, is outlined in the Boards’ Investment Objectives and Policy Statement. Plan assets are managed with a long-term
objective of achieving and maintaining a fully funded
status for the benefits provided by the System. The table on the following page provides the Boards’ adopted asset allocation policy as of June 30, 2025 and 2024.
City of Fresno Employees Retirement System l FINANCIAL
Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 24 Asset Allocation Policy
As of June 30, 2025 and 2024
Asset Class FY 2025 FY 2024
Equity
Domestic 21.0% 22.5%
International 18.0% 18.0%
Private 8.0% 6.5%
Rates/Credit
Core Fixed Income 12.0% 13.0%
Private Debt/Credit 14.0% 14.0%
Real Assets
Core Real Estate 6.0% 9.0%
Non-Core Real Estate 9.0% 6.0%
Infrastructure 7.0% 7.0%
Multi-Asset
Alternative Credit 4.0% 4.0%
Short-Term Investments 1.0% 0.0%
100% 100%
Estimates
The preparation of financial statements in accordance
with generally accepted accounting principles (GAAP)
requires the System administrator to make estimates and assumptions that affect certain amounts and disclosures.
Accordingly, actual results may differ from those
estimates.
Reclassifications
Certain amounts presented in the prior year's data have been reclassified to be consistent with the current year's presentation. Such reclassifications had no effect on
previously reported fiduciary net position.
Implementation of New Accounting
Pronouncements
For the year ended June 30, 2025, the Board adopted and the System implemented all applicable new GASB
pronouncements. The most recent pronouncements,
effective for fiscal year ended June 30, 2025, are provided as follows.
GASB Statement No. 101 - Compensated Absences, was
issued in June 2022. The objective of this statement is to better meet the information needs of financial statement users by updating the recognition and measurement
guidance for compensated absences. The System has
determined that this statement is not applicable, and thus has no material impact on the System's financial
statements.
GASB Statement No. 102 - Certain Risk Disclosures, was
issued in December 2023. The objective of this statement is to provide users of government financial statements
with essential information about risks related to a
government’s vulnerabilities due to certain concentrations or constraints. The System has implemented the
provisions of this statement.
City of Fresno Employees Retirement System l FINANCIAL
Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 25 3 Contributions
Authority to Collect
The responsibility for both City and employee
contributions to the System is mandated by the City of
Fresno Municipal Code Sections 3-523 and 3-529.
Contributions are made by the members and the employer
at rates recommended by the System's independent
actuary and adopted by the Board.
Employee contribution rates vary according to age and are designed to provide funding for approximately one third of retirement benefit basic normal costs and one-half of the cost-of-living component. All active members are
required to make contributions to the System. The Board adopted average member contribution rate as of June 30, 2025 for 2024-2025 (based on the June 30, 2023
valuation) was 9.61 percent of compensation. The Board
adopted average member contribution rate as of June 30, 2024 for 2023-2024 (based on the June 30, 2022
valuation) was 8.90 percent of compensation.
The employer contribution rate is designed to provide
funding for the remaining regular retirement and cost-of- living benefits, as well as all regular disability and
survivors' benefits. The Board adopted average employer contribution rate as of June 30, 2025 for 2024-2025
(based on the June 30, 2023 valuation) was 14.06 percent of compensation. The Board adopted average employer
contribution rate as of June 30, 2024 for 2023-2024
(based on the June 30, 2022 valuation) was 13.38 percent of compensation.
One of the funding objectives of the System is to establish contribution rates which, over time, will remain level as a percentage of payroll unless the System benefit provisions are changed.
Funding Status & Method
Actuarial Funding Policy and Actuarial Cost
Methodology for Funding Purposes.
The Board adopted a Comprehensive Actuarial Funding
Policy on November 7, 2012. For the Employees
Retirement System, that policy included a change in
actuarial cost methodology from the Projected Unit Credit (PUC) method used for funding purposes to the Entry
Age Normal (EAN) method as the EAN method is used
by a substantial majority of the retirement systems in
California and nationwide. More importantly, the Board
made this change in actuarial cost methodology due to the adoption of GASB Statements No. 67 and No. 68, which
substantially revised the financial reporting requirements for governmental pension plans and their sponsors.
Goals of the Actuarial Funding Policy:
• To achieve long-term full funding of the cost of
benefits provided by the System;
• To seek reasonable and equitable allocation of the
cost of benefits over time; and
• To minimize any volatility of the City’s contribution to the extent reasonably possible, consistent with
other policy goals.
City of Fresno Employees Retirement System l FINANCIAL
Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 26 Funding Requirements and Policy
Components
The System’s annual funding requirement is comprised of a payment of the Normal Cost and a payment on the
Unfunded Actuarial Accrued Liability (UAAL) if
applicable. The Normal Cost and the amount of the
payment on UAAL are determined by three components
of the Board’s funding policy: 1) Actuarial Cost Method – the techniques used to allocate the cost/liability of
retirement benefits to a given period; 2) Asset Smoothing Method – the techniques that spread the recognition of
investment gains or losses over a period of time for the purposes of determining the Actuarial Value of Assets
used in the actuarial valuation process; and 3)
Amortization Policy – the decisions on how, in terms of duration and pattern, to fund the difference between the Actuarial Accrued Liability and the Actuarial Value of
Assets in a systematic manner.
Using the Asset Smoothing Method, the investment gains
or losses of each valuation period, as a result of
comparing the actual market return to the expected market return, are recognized in level amounts over five (5) years in calculating the Actuarial Value of Assets.
As of June 30, 2025, the System does not have an
Unfunded Actuarial Accrued Liability (UAAL). The
Board’s Amortization Policy sets forth the amortization procedures for funding any UAAL or amortization and
allocation of any available surplus in the System.
Any new UAAL as a result of actuarial gains or losses
identified in the annual valuation as of June 30 will be amortized over a period of fifteen (15) years. Any new
UAAL as a result of any change in actuarial assumptions or methods will be amortized over a period of twenty-five (25) years. The amortization period for any increase in UAAL as a result of any amendments to the System will
be amortized over a period of fifteen (15) years, while any increase in UAAL resulting from a temporary retirement
incentive will be funded over a period not to exceed five (5) years. UAAL shall be amortized over
“closed” (separate) amortization periods so that the
amortization period for each layer decreases by one year with each actuarial valuation. UAAL is amortized as a
level percentage of payroll so that the amortization
amount in each year during the amortization period shall be expected to be a level percentage of covered payroll, taking into consideration the current assumption for
general payroll increase.
If an overfunding status exists (i.e., the Valuation Value of Assets exceeds the Unfunded Actuarial Accrued
Liability (UAAL); the System is considered to have a
surplus in the System as of a point in time), such actuarial surplus and any subsequent surpluses will be amortized
over an “open” amortization period of twenty-five (25)
years. This amortization period of twenty-five years shall be applicable to the provisions in Fresno Municipal Code Sections relating to the amortization period used in the calculation of the Post Retirement Supplemental Benefit (PRSB). Any prior Unfunded Actuarial Accrued Liability
(UAAL) amortization layers will be considered fully
amortized, and any subsequent UAAL will be amortized
over fifteen (15) years as the first of a new series of amortization layers.
The System uses a five-year smoothing of market gains
and losses to derive the actuarial value of assets. As of the fiscal year ended June 30, 2025, the actuarial value of assets was $1.733 billion with a funded percentage of
114.0 percent on a valuation value of assets.
The progress being made towards meeting the System’s
funding objective through June 30, 2025 is illustrated in the Schedule of Funding Progress shown in the Actuarial Section on page 88.
City of Fresno Employees Retirement System l FINANCIAL
Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 27 Funding Policy
The funding policy intends for the City (Employer) to
fund, at a minimum, the amounts recommended by the
actuary and approved by the Retirement Board. Such
amounts are determined using the individual entry age
normal funding method applied to the projected benefits in determining the Normal Cost and Actuarial Accrued
Liability. The Normal Cost is determined on an
individual basis for each active member. If there is a positive (Surplus) or negative (Unfunded) difference
between the Valuation of Assets and the Actuarial
Accrued Liability (AAL), the amortization policy
determines the amortization of the Unfunded Actuarial
Accrued Liability (UAAL) on a level percentage of
payroll needed to fund the UAAL or the amount of
available surplus which would be distributable in any
given year. This method produces an employer
contribution rate consisting of amounts for (a) normal cost and (b) amortization of any unfunded (UAAL) or
prefunded (PAAL) actuarial accrued liability.
These minimum contributions are recognized currently in the Statement of Changes in Fiduciary Net Position.
Employees' contributions are funded and recognized
currently through payroll deductions in amounts
recommended by the actuary. Costs of administering the
System are charged against System assets.
Total contributions (basic and cost-of-living adjustments (COLA)) to the System for fiscal year 2025 totaled
$52,329,650. Employees contributed $20,771,353 and the
City made contributions of $31,558,297.
During fiscal year 2025, the Board approved an
Actuarially Determined Contribution rate, setting the
Employer normal contribution rate at 14.09 percent. Due to an adjustment for surplus offsets and contribution
shortfalls from the prior year, the net approved rates for Employer and System member basic and COLA
contributions were 14.06 percent and an average of 9.61 percent, respectively, for fiscal year 2025. For the fiscal year ending June 30, 2025, the Board adopted
contribution rates of 14.06% for employer and an average of 9.61% for members. The City elected to implement the contribution rate of 13.38% for the employer and an
average of 8.90% for members, lower than the actuarially determined contribution rates adopted by the Board.
Contributions aggregating $47,454,377 ($28,621,359
employer contributions and $18,833,018 employee
contributions) were made in fiscal year 2024, based on an actuarial valuation determined as of June 30, 2022, which became effective for the year ended June 30, 2024.
During fiscal year 2024, the Employer normal
contribution rate was set at 14.15 percent. Employer and System member contributions represented 13.38 percent
and 8.90 percent, respectively, of the fiscal year 2024 covered payroll.
Contributions Required and Contributions
Made
The employer’s required normal contributions to the
System have two components: basic and COLA. For
fiscal years 2025 and 2024, the employer’s required
normal contributions (basic and COLA) to the System
were as follows:
Effective Effective
FY 25 FY 24
Employer Normal Basic Cost Rate 11.33% 11.40%
Employer Normal COLA Cost Rate 2.76% 2.75%
Employer Total Normal Cost 14.09% 14.15%
City of Fresno Employees Retirement System l FINANCIAL
Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 28 Employee and Employer Contributions
FY2025 FY2024
Employee Contributions $ 20,771,353 $ 18,833,018
Avg. Employee Contribution Rate Implemented 8.90% 8.90% Employer Contributions $ 31,558,297 $ 28,621,359
Net Employer Contribution Rate Implemented 13.38% 13.38% Pensionable Payroll $ 235,018,890 $ 213,008,002
4 Risk Disclosure Related to Contribution Constraint
The City of Fresno Employees Retirement System (the
System) is subject to a constraint related to the inflow of resources from its plan sponsor, the City of Fresno.
Pursuant to the City’s municipal code, the City is
responsible for remitting employer and employee
contributions based on rates adopted by the System’s
Board of Retirement (the Board) prepared in accordance
with parameters included in its formal funding policy
following an independent actuarial valuation.
For the fiscal year ending June 30, 2025, the Board
adopted contribution rates of 14.06% for employer and an average of 9.61% for members. The City elected to
implement the contribution rate of 13.38% for the
employer and an average of 8.90% for members, lower
than the actuarially determined contribution rates adopted by the Board.
This action resulted in a shortfall in contributions received during fiscal year 2024–2025. At the advice of counsel
(see below) and following general procedures that have
been used to determine the City’s contributions in the
past, the shortfall has been added to the City’s required contributions for fiscal year 2026–2027.
The System has initiated litigation seeking to compel the plan sponsor, the City of Fresno, to remit the full
actuarially determined contributions, including the
shortfall amount. As of June 30, 2025, the litigation
remains unresolved.
City of Fresno Employees Retirement System l FINANCIAL
Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 29 5 Net Pension Liability
The components of the net pension liability of the System are as follows:
Schedules of Changes in the System’s Net Pension Liability (GASB 67) As of June 30, 2025 and 2024
(In Thousands)
As of As of
June 30, 2025 June 30, 2024
Total Pension Liability $1,748,714 $1,674,885
Plan Fiduciary Net Position ($1,974,212) ($1,815,105)
Net Pension Liability/(Surplus) ($225,498) ($140,220)
Plan Fiduciary Net Position as a percentage of the total pension liability 112.90% 108.37% The net pension liability was measured as of June 30, 2025 and 2024, and determined based upon the total pension liability (on a GASB 67 basis) from actuarial valuations as of June 30, 2025 and 2024, respectively.
City of Fresno Employees Retirement System l FINANCIAL
Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 30 Actuarial Assumptions
Key Methods and Assumptions Used in Valuation
of Total Pension Liability
The total pension liability as of June 30, 2025 was determined by an actuarial valuation as of June 30, 2025, using the following actuarial assumptions, applied to all periods included in the measurement:
Valuation Date: June 30, 20251
Actuarial Experience Study: 3 Year Period Ending June 30, 2024 Actuarial Cost Method: Entry Age Normal Actuarial Cost Method Normal Cost and Actuarial Accrued Liability are calculated on an individual basis and are based on costs allocated as a level percentage of compensation.
Actuarial Assumptions
Inflation 2.50%
Salary Increases 4.00% to 13.00%, varying by service, including inflation Discount Rate 6.75%, net of pension plan investment expense, including inflation Other Assumptions See June 30, 2025 funding valuation for the service retirement rates after they have been adjusted to treat DROP participation as service retirement.
Mortality Rates Healthy Members • Pub-2016 General Healthy Retiree Amount-Weighted Above-Median Mortality Table (separate tables for males and females) with rates increased by 10%, projected generationally with the two-dimensional mortality improvement scale MP-2021.
Beneficiaries not currently in Pay Status • Pub-2016 General Healthy Retiree Amount- Weighted Above-Median Mortality Table (separate tables for males and females) with rates increased by 10%, projected generationally with the two-dimensional mortality improvement scale MP-2021. Beneficiaries in Pay Status • Pub-2016 General Contingent Survivor Amount- Weighted Above-Median Mortality Table (separate tables for males and females) with rates increased by 10%, projected generationally with the two-dimensional mortality improvement scale MP-2021.
Disabled Members • Pub-2016 Non-Safety Disabled Retiree Amount-Weighted Mortality Table (separate tables for males and females), projected generationally with the two- dimensional mortality improvement scale MP-2021.
City of Fresno Employees Retirement System l FINANCIAL
Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 31 1Actuarially determined contribution rates are calculated as of June 30, two years prior to the end of the fiscal year in which contributions are reported. As such, the actuarial valuations dated June 30, 2025 and 2024, will impact the contribution rates for the fiscal years ended June 30, 2027 and 2026, respectively.
The valuation interest rate is 6.75 percent; total salary scale increases range between 4.00% to 13.00% (including 2.50 percent for inflation plus 0.50 percent across the board salary increase plus merit and promotion increases based on completed years of service) were based on the June 30, 2024 Experience Analysis and Economic Assumptions Reports.
Actuarial valuations of an ongoing plan involve estimates of the fair value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, inflation and investment returns. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revisions as actual results are compared with past expectations and new estimates are made about the future.
GASB Statement No. 67 (GASB 67) addresses accounting and financial reporting requirements for pension plans and redefines pension liability and expense for financial reporting purposes, and does not apply to contribution amounts for pension funding purposes.
When measuring pension liability under GASB Statement No. 67, the actuary uses the same actuarial cost method (Entry Age method) and the same type of discount rate (expected return on assets) as the System uses for funding. Note that, unrelated to the investment return assumption, the new rules use a version of the Entry Age method where the Total Pension Liability (TPL) for financial reporting purposes must be fully accrued by the time a member either enters DROP or is expected to elect the DROP. This is in contrast to the version of the Entry Age method used for funding, where the Actuarial Accrued Liability (AAL) does not have to be fully accrued until members retire from employment after participation in the DROP. Under GASB Statement No. 67, active members who are expected to enroll in the DROP in the future would report a Service Cost that is higher than the Normal Cost used for funding, while members already in the DROP would report no Service Cost even though their Normal Cost continues to accrue.
Long-Term Expected Real Rate of Return
The long-term expected rate of return on the System’s investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and net of inflation) are developed for each major asset class. This information is combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation and deducting expected investment expenses and a risk margin. The target allocation and projected arithmetic real rates of return for each major asset class, after deducting inflation, but before deducting investment expenses, used in the derivation of the long-term expected investment rate of return assumption are summarized in the following table.
The actual asset class target allocations from the Board's prior adopted Asset Allocation Target Policy were utilized in the Analysis of Actuarial Experience during the period July 1, 2021 through June 30, 2024 and for the Review of Economic Actuarial Assumptions used for the June 30, 2025 and June 30, June 30, 2024 Actuarial Valuations.
City of Fresno Employees Retirement System l FINANCIAL
Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 32 Asset Class/Target Allocation/Long-term Expected
Real Rate of Return Table
As of June 30, 2025 As of June 30, 2024
Asset Class
Target
Asset
Allocation
Weighted Average
Long-Term Expected
Real Rate of Return*
(Arithmetic)
Target
Asset
Allocation
Weighted Average
Long-Term Expected
Real Rate of Return*
(Arithmetic)
Large Cap U.S. Equity 18.00% 5.59% 18.00% 5.40%
Small Cap U.S. Equity 3.00% 6.45% 3.00% 6.17%
International Equities (Unhedged) 13.00% 6.23% 13.00% 6.13% Emerging International Equities 5.00% 7.89% 5.00% 8.17% Core Bonds 12.00% 2.47% 12.00% 0.39%
Private Equity 8.00% 9.31% 8.00% 10.83%
Private Debt 14.00% 6.47% 14.00% 5.93%
Core Real Estate 6.00% 4.58% — —
Non-Core Real Estate 9.00% 8.19% — —
Absolute Return Fixed Income 1.00% 3.50% — —
Real Estate — — 15.00% 4.59%
Private Credit - Credit Opportunities — — 2.50% 7.18%
Private Debt - Credit Opportunities 3.00% 7.09% — —
China Equity — — 1.25% 9.53%
Hedge Fund - Macro — — 1.25% 2.72%
Private Real Assets - Infrastructure/Land 7.00% 4.63% 7.00% 6.19% Cash 1.00% 0.98% — —
Total 100.0% 100.0%
* Based on the results of an experience study for the period from July 1, 2021 through June 30, 2024.
Mortality Rates
Mortality rates used in the latest actuarial valuation are based on the Pub-2016 mortality tables. For healthy members and beneficiaries, the Pub-2016 General Healthy Retiree Amount-Weighted Above-Median Mortality Table (separate tables for males and females) times 110% is used, projected generationally with the two-dimensional mortality improvement scale MP-2021. For members that are disabled, the Pub-2016 Non-Safety Disabled Retiree Amount-Weighted Mortality Table (separate tables for males and females) is used, projected generationally with the two-dimensional mortality improvement scale MP-2021.
Discount Rate
The discount rate used to measure the total pension liability was 6.75 percent as of June 30, 2025 and 2024.
City of Fresno Employees Retirement System l FINANCIAL
Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 33 The projection of cash flows used to determine the discount rate assumed plan member contributions will be made at the current contribution rate and that employer contributions will be made at rates equal to the actuarially determined contribution rates. For this purpose, only employer contributions that are intended to fund benefits for current plan members and their beneficiaries are included. Projected employer contributions that are intended to fund the service costs for future plan members and their beneficiaries, as well as projected contributions from future plan members, are not included. Based on those assumptions, the pension plan's fiduciary net position was projected to be available to make all projected future benefit payments for current plan members. Therefore, the long-term expected rate of return on the System’s investments was applied to all periods of projected benefit payments to determine the total pension liability as of both June 30, 2025 and June 30, 2024. The table below presents the net pension liability of the Retirement System calculated using the discount rate of
6.75 percent, as of June 30, 2025 and 2024, as well as what the System’s net pension liability would be if it were calculated using a discount rate that is 1.00 percent lower or 1.00 percent higher than the current rate:
Sensitivity of Net Pension Liability to Changes in the Discount Rate As of June 30, 2025 and 2024 (In Thousands)
1% Current 1%
Decrease Discount Rate Increase
Net Pension Liability/(Surplus) 5.75% 6.75% 7.75%
June 30, 2025 ($14,529) ($225,498) ($398,102)
1% Current 1%
Decrease Discount Rate Increase
Net Pension Liability/(Surplus) 5.75% 6.75% 7.75%
June 30, 2024 $59,686 ($140,220) ($303,754)
6 Net Position Restricted for
Pension Benefits
Net position restricted for pension benefits is segregated into Active Members Reserves (members’ accumulated
contributions) and reserves established by the Board for various benefit payments.
Reserves are established by the System from member and
employer contributions and the accumulation of
investment income after satisfying investment and
administrative expenses. Note: The reserves do not
represent the present value of assets needed, as
determined by actuarial valuation, to satisfy retirements and other benefits as they become due.
The System’s major reserves are as follows:
ACTIVE MEMBER (EMPLOYEE) RESERVES
represent the total accumulated member contributions.
Additions include member contributions and investment
earnings; deductions include refunds of member
contributions and transfers to Employer Advance/Retired Reserves.
City of Fresno Employees Retirement System l FINANCIAL
Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 34
EMPLOYER ADVANCE/RETIRED RESERVES
represent the total accumulated employer contributions
for future retirement payments to current active and vested terminated members and the total accumulated
transfers from Active Member Reserves and investment
earnings, less payments to retirees and transfers to the DROP Reserves. Additions include contributions from the employer, transfers from Active Member Reserves and
investment earnings; deductions include payments to
retirees and transfers to the DROP Reserves.
DEFERRED RETIREMENT OPTION PROGRAM
(DROP) RESERVES represent funds reserved for
Deferred Retirement Option Benefits accumulated by
members and retirees.
POST RETIREMENT SUPPLEMENTAL BENEFIT
(PRSB) RESERVES represent surplus earnings that have
been allocated but not distributed to eligible retirees in accordance with the City of Fresno Municipal Code
Section 3-567 “Post Retirement Supplemental Benefit.”
The PRSB Reserve Account was exhausted at the end of
calendar year 2013.
CITY SURPLUS (DEFICIT) RESERVES represent
surplus earnings that have been allocated but not used as a reduction to offset or eliminate the City’s pension
contributions in accordance with the conditions and
requirements of Municipal Code Section 3-567 “Post
Retirement Supplemental Benefit.” In addition, these
reserves also include the negative balance that reflects shortfalls in employer and member contributions. These
shortfalls arise when the City adopts contribution rates below the board- approved, actuarially determined rates.
The City Surplus (Deficit) Reserves account balance was negative for both the fiscal year 2025, and the fiscal year 2024 due to the differences between the actual and
estimated surplus allocation for the City for offsetting the City’s contributions for those years and the difference between the adopted and implemented employer and
member contribution rates.
Interest is allocated at an actuarially determined interest rate as approved by the Board and is credited monthly to the Active Member Reserves and the Employer Advance/
Retired Reserves. Active members in the Deferred
Retirement Option Program accrue interest on their
accumulated DROP accounts monthly at an interest rate
annually adopted by the Board.
The amount of reserves as of June 30, 2025 and 2024,
consisted of the following:
Reserves Table as of June 30, 2025 and 2024
(In Thousands)
2025 2024
Employer Advance/Retired Reserves $ 1,630,570 $ 1,488,300 Active Member (Employee) Reserves 172,119 155,954
DROP Reserves 174,810 171,142
PRSB Reserves — —
City Surplus (Deficit) Reserves (3,287) (291)
Net Position Restricted for Pension Benefits $ 1,974,212 $ 1,815,105 City of Fresno Employees Retirement System l FINANCIAL
Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 35 7 Fair Value Measurements
In accordance with GASB Statement No. 72, Fair Value
Measurement and Application, which addresses
accounting and financial reporting issues related to fair value measurements and disclosures, the System’s
investments are measured and reported within the fair
value hierarchy established by generally accepted
accounting principles. The fair value hierarchy, which has three levels, is based on the valuation inputs used to
measure an asset’s fair value and gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
The three levels of the fair value hierarchy are as follows:
Level 1: Inputs are based on quoted prices for identical assets or liabilities in an active market that the System can access. An active market for the asset or liability is one in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing
information on an ongoing basis. A quoted price in an
active market usually provides the most reliable evidence of fair value and is generally used without adjustment if available. This classification includes public equities with observable market prices.
Level 2: Inputs that are observable either directly or indirectly but are not Level 1 inputs. Level 2 inputs
include quoted prices for similar instruments, broker
quotes, or observable inputs that directly impact value such as interest rates, prepayment speeds, and credit risk.
Pricing inputs, including broker quotes, are generally
those other than exchange quoted prices in active markets, and fair values are determined through the use of models or other valuation methodologies. For investments in
funds where there is an ability to redeem such investments at the Net Asset Value (NAV) per share (or its equivalent) at the measurement date or in the near term, the fair value of the investment is generally categorized as Level 2.
Level 3: Inputs that are unobservable. Level 3 inputs are generally used in situations where there is little, if any, market activity for the investment. These inputs into the determination of fair value require significant
management judgment or estimation. Due to the inherent
uncertainty of these estimates, these values may differ significantly from the values that would have been used had a ready market for these investments existed.
Investments that are included in this category generally include public entities and other fixed income securities where there is an inability to redeem such investments at the NAV per share (or its equivalent) at the measurement date or in the near term.
The tables on the following pages show the fair value
leveling of the System’s investments as of June 30, 2025 and 2024.
City of Fresno Employees Retirement System l FINANCIAL
Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 36 Fair Value Measurements Using
Investment Type June 30, 2025
Quoted Prices in
Active Markets
for Identical Assets
(Level 1)
Significant Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Investments by Fair Value Level
Debt Securities
Asset Backed Securities $ 31,381,315 $ — $ 30,927,068 $ 454,247 Commercial Mortgage-Backed 9,151,494 — 9,151,494 —
Corporate Bonds 66,150,166 — 65,840,917 309,249
Government Agencies 3,826,258 — 3,826,258 —
Government Bonds 19,283,328 — 19,283,328 —
Government Mortgage-Backed Securities 82,663,963 — 82,663,963 — Gov't-Issued Commercial Mortgage-Backed 289,925 — 289,925 — Index Linked Government Bonds 759,083 — 759,083 —
Municipal/Provincial Bonds 1,921,698 — 1,921,698 —
Non-Government Backed CMOs 2,118,046 — 2,118,046 —
Total Debt Securities 217,545,276 — 216,781,780 763,496 Equity Securities
Consumer Discretionary 30,441,539 30,441,539 — —
Consumer Staples 9,831,773 9,831,773 — —
Energy 6,171,575 6,028,622 — 142,953
Financials 44,811,322 44,662,567 — 148,755
Health Care 18,563,609 18,563,609 — —
Industrials 33,911,075 33,911,075 — —
Information Technology 33,910,212 33,910,212 — —
Materials 11,488,858 11,131,814 — 357,044
Telecommunication Services 20,450,701 20,450,701 — — Utilities 1,077,863 1,077,863 — —
Total Equity Securities 210,658,527 210,009,775 — 648,752 Securities Lending 21,744,609 21,744,609 — —
Short-Term Investments 8,832,858 8,832,858 — —
Private Real Estate Holdings 3,662,500 — 3,662,500 — Total Investments by Fair Value Level $ 462,443,770
Investments Measured at the Net Asset Value (NAV)
Commingled Fund - Equities $ 662,617,986
Commingled Fund - Real Estate 144,464,743
Commingled Fund - Infrastructure 110,808,616
Private Real Estate Funds 154,858,733
Private Debt/Private Credit 276,768,982
Private Equity 154,513,736
Total Investments Measured at NAV 1,504,032,796
Total Investments Measured at Fair Value and NAV $ 1,966,476,566 Investment Derivative Instruments*
Debt Securities - Futures $ 27,323,880 $ 27,323,880 $ — $ — Rights/Warrants
2 2 — —
Total Investment Derivative Instruments $ 27,323,882 $ 27,323,882 $ — $ — * Short-term derivative instruments included on page 50 are excluded here.
City of Fresno Employees Retirement System l FINANCIAL
Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 37 Fair Value Measurements Using
Investment Type June 30, 2024
Quoted Prices in
Active Markets
for Identical Assets
(Level 1)
Significant Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Investments by Fair Value Level
Debt Securities
Asset Backed Securities $ 24,297,878 $ — $ 24,297,878 $ — Commercial Mortgage-Backed 13,369,970 — 13,369,970 —
Corporate Bonds 66,541,897 — 66,541,897 —
Government Agencies 3,268,200 — 3,268,200 —
Government Bonds 17,005,419 — 17,005,419 —
Government Mortgage-Backed Securities 72,943,090 — 72,943,090 — Gov't-Issued Commercial Mortgage-Backed 282,638 — 282,638 — Index Linked Government Bonds 555,234 — 555,234 —
Municipal/Provincial Bonds 1,573,662 — 1,573,662 —
Non-Government Backed CMOs 1,291,602 — 1,291,602 —
Total Debt Securities 201,129,590 — 201,129,590 —
Equity Securities
Consumer Discretionary 27,017,723 27,017,723 — —
Consumer Staples 12,144,248 12,144,248 — —
Energy 7,571,965 7,571,965 — —
Financials 42,729,345 42,729,345 — —
Health Care 14,697,562 14,697,562 — —
Industrials 36,631,872 36,631,872 — —
Information Technology 43,052,238 43,052,238 — —
Materials 11,012,331 11,012,324 — 7
Real Estate 194,236 194,236 — —
Telecommunication Services 16,807,061 16,807,061 — —
Utilities 698,808 698,808 — —
Total Equity Securities 212,557,389 212,557,382 — 7
Securities Lending 24,737,950 24,737,950 — —
Short-Term Investments 6,714,859 6,714,859 — —
Private Real Estate Holdings 3,500,000 — 3,500,000 —
Total Investments by Fair Value Level $ 448,639,788
Investments Measured at the Net Asset Value (NAV)
Commingled Fund - Equities $ 584,440,013
Commingled Fund - Real Estate 152,848,841
Commingled Fund - Infrastructure 104,447,327
Private Real Estate Funds 121,858,546
Private Debt/Private Credit 272,396,817
Private Equity 131,684,368
Total Investments Measured at NAV 1,367,675,912
Total Investments Measured at Fair Value and NAV $ 1,816,315,700 Investment Derivative Instruments*
Debt Securities - Futures $ 22,287,031 $ 22,287,031 $ — $ — Rights/Warrants 807 807 — —
Total Investment Derivative Instruments $ 22,287,838 $ 22,287,838 $ — $ — * Short-term derivative instruments included on page 50 are excluded here.
City of Fresno Employees Retirement System l FINANCIAL
Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 38 Commingled equity and real estate funds are valued based on NAV reported by the investment manager, which are
generally calculated based on the last reported sale price of the underlying assets held by such funds. Direct
lending funds are typically structured as limited
partnerships and limited liability companies. Since there is no readily available market for these investments in limited partnerships and limited liability companies, such investments are stated at fair value as estimated in an inactive market. These investments include securities of companies that may not be immediately liquid, such as
private debt securities, real estate or other assets. The valuations of these investments are based upon values
provided by the investment managers, based on the
guidelines established with the investment managers and in consideration of other factors related to the System’s interests in these investments.
Investments that are measured at fair value using the net asset value per share (NAV or its equivalent) as a
practical expedient are not classified in the fair value hierarchy. In these instances where inputs used to measure fair value fall into different levels in the fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is
significant to the valuation. The System’s assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors
specific to each asset or liability.
Equity and derivative securities classified in Level 1 are valued using prices quoted in active markets for those
securities. Equity and debt securities classified in Level 2 and Level 3 are using either a bid evaluation or a matrix pricing technique. Bid evaluations may include market
quotations, observable market based inputs and
unobservable inputs (i.e., extrapolated data, proprietary models, and indicative quotes). Matrix pricing is used to value securities based on the securities relationship to benchmark quoted prices.
Investment derivative instruments classified as Levels 2 and 3 are valued using market approaches that consider, as applicable, benchmark interest rates or foreign
exchange rates.
Real estate assets classified in Level 2 are the System’s private real estate investments which are valued using
independent external appraisers. The System’s policy is to perform independent appraisals of the property every
three years. The appraisals include a complete property and market inspection and analysis by designated
Members of the Appraisal Institute (MAI). The appraisals are performed using generally accepted valuation
approaches applicable to the property type. Calculations used in the System’s independent appraisals are generally based on a discounted cash flow analysis.
Investments in Entities That Calculate Net
Asset Value Per Share
The fair value measurement of investments in
commingled equity, real estate and direct lending funds are valued based on the investments’ net asset value
(NAV) per share (or its equivalent) reported by the
investment manager, which are generally calculated based on the last reported sale price of the underlying assets held by such funds. These include funds that are
structured as limited partnerships and limited liability companies.
Since there is no readily available market for investments in limited partnerships and limited liability companies, such investments are stated at fair value as estimated in an inactive market. These investments include securities of companies that may not be immediately liquid, such as
private debt securities and real estate or other assets.
City of Fresno Employees Retirement System l FINANCIAL
Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 39 The valuations of these investments are based upon values provided by the investment managers, and in
consideration of other factors, including guidelines
established with those investment managers, related to the System’s interests in these investments. Such fair value measurements are shown in the tables below as of June
30, 2025 and 2024.
City Of Fresno Employees Retirement System
Investments Measured at the NAV
As of June 30, 2025
Investment Type Fair Value
Unfunded
Commitments
Redemption
Frequency
(If Currently
Eligible)
Redemption
Notice
Period
Commingled Fund - Equities $ 662,617,986 $ — Daily None Commingled Fund - Real Estate 144,464,743 — Quarterly 45-90 Days Commingled Fund - Infrastructure 110,808,616 — Not Eligible N/A Private Real Estate Funds 154,858,733 90,370,652 Not Eligible N/A Private Debt/Private Credit 276,768,982 106,110,753 Not Eligible N/A Private Equity 154,513,736 156,886,083 Not Eligible N/A Total investments measured at the NAV $ 1,504,032,796 $ 353,367,488 City Of Fresno Employees Retirement System
Investments Measured at the NAV
As of June 30, 2024
Investment Type Fair Value
Unfunded
Commitments
Redemption
Frequency
(If Currently
Eligible)
Redemption
Notice
Period
Commingled Fund - Equities $ 584,440,013 $ — Daily None Commingled Fund - Real Estate 152,848,841 — Quarterly 45-90 Days Commingled Fund - Infrastructure 104,447,327 — Not Eligible N/A Private Real Estate Funds 121,858,546 64,155,455 Not Eligible N/A Private Debt/Private Credit 272,396,817 116,905,373 Not Eligible N/A Private Equity 131,684,368 103,679,340 Not Eligible N/A Total investments measured at the NAV $ 1,367,675,912 $ 284,740,168 On the following page is an explanation of the investment types listed above.
City of Fresno Employees Retirement System l FINANCIAL
Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 40 The investment types listed in the tables on the preceding page were measured at the NAV as follows.
(1) Commingled equity funds are highly
liquid and can be redeemed within short-term periods of time. The System’s investments of this type consist of
institutional investment funds - one international
ACWIexUS equity fund that is diversified across
developed and emerging market countries and sectors and two domestic large cap equity index funds (S&P 500
Index and Russell 1000 Index). The fair value of these
investment types has been determined using the NAV per
share of the investments.
(2) Commingled real estate fund: The
System’s commingled real estate funds are a core
investment strategy designed to deliver a relatively high level of current income combined with moderate
appreciation potential. It is comprised of institutional quality office, retail, residential and industrial investments in major markets throughout the U.S. The redemption
frequency of the real estate fund is quarterly, if liquidity is available, with a notice of redemption 45 days before the end of a quarter.
(3) Private real estate funds: The System’s
private real estate funds are designed to act as a diversifier and alpha generator to the core real estate portfolio.
Investments are made in middle-market assets across
various domestic and international regions and sectors
such as industrial, multifamily, office, and retail. The strategies focus on identifying investments with pricing dislocations that can be renovated, repurposed, and exited at opportunistic levels. The investment period is
generally 3-5 years with a lifespan of 10-12 years.
(4) Private Debt/Private Credit - direct
lending funds: The System’s direct lending funds are each invested through a master-feeder structure, on a leveraged basis primarily in senior secured loans of private U.S. lower-middle-market companies. Strategies employ a
capital preservation focus and structured investments with strong covenant provisions to reduce associated risks,
underwriting multiple cushions to provide downside
protections. The investment period is generally 3-5 years with reinvestment of committed capital.
(5) Commingled infrastructure funds: The
System’s infrastructure funds invest in core assets that generate long-term stable cash yields, have modest price appreciation, and provide inflation protection. Types of assets include energy (water, wind, and solar, etc.),
transportation (toll roads and bridges, airports, and
seaports, etc.), and social (hospitals, prisons, and schools, etc.). Investments are located domestically as well as in the Organization for Economic Co-operation and
Development (OECD) countries internationally. Each
fund has lockup periods of 4 years and, after that initial period, redemptions can be requested on a quarterly basis, if liquidity is available.
(6) Private Equity Funds: The System’s
private equity fund represents investments in privately owned companies that are not listed on public market
exchanges. They are typically accessed through
partnerships and managed by external general partners.
The System’s one private equity fund is composed of
primaries, secondaries, and co-investments, split between North America and international markets. Most
investments are sourced from the small-to-mid market
investment universe.
City of Fresno Employees Retirement System l FINANCIAL
Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 41 8 Deposits and Investments
The System’s investment guidelines reflect the duties imposed by an investment standard known as the “prudent expert rule.” The prudent expert rule establishes a standard for all fiduciaries which includes anyone who has discretionary authority with respect to the System’s investments.
Northern Trust serves as custodian of the System’s investments. The System’s asset classes include U.S. Equity, International Equity, Private Equity, Fixed Income, Private Debt/Credit, Real Assets and Multi-Assets. Any class may be held in direct form, pooled form, or both. The System has thirty-one external investment managers, managing thirty-five individual portfolios. Investments as of June 30, 2025 and 2024, consist of the following:
Investments at Fair Value as of June 30, 2025 and 2024
(In Thousands)
2025 2024
Investments at Fair Value
Domestic Equity $ 488,147 $ 441,275
International Equities 384,295 354,893
Private Equity 154,514 131,684
Fixed Income 245,704 224,247
Private Debt/Credit 236,605 243,293
Real Assets 413,795 382,655
Multi-Assets 40,163 29,104
Short-Term Investments 8,833 6,715
Total Investments at Fair Value $ 1,972,056 $ 1,813,866 City of Fresno Employees Retirement System l FINANCIAL
Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 42 The Board, through its Investment Objectives and Policy Statement, provides guidelines for investments and established the following target allocations with a minimum and maximum range for each of the asset classes:
Asset Class Minimum Target and Maximum Allocations
FY 2025 FY 2024
Asset Class Minimum Target Maximum Minimum Target Maximum Equity
Domestic 15.0% 21.0% 36.0% 15.0% 22.5% 36.0%
International 10.0% 18.0% 25.0% 10.0% 18.0% 25.0%
Private 0.0% 8.0% 10.0% 0.0% 6.5% 10.0%
Rates/Credit
Core Fixed Income 5.0% 12.0% 20.0% 5.0% 13.0% 20.0%
Private Debt/Credit 5.0% 14.0% 20.0% 5.0% 14.0% 20.0%
Real Assets
Core Real Estate 2.0% 6.0% 8.0% 5.0% 9.0% 15.0%
Non-Core Real Estate 5.0% 9.0% 15.0% 2.0% 6.0% 8.0%
Infrastructure 2.0% 7.0% 10.0% 2.0% 7.0% 10.0%
Multi-Asset
Alternative Credit 0.0% 4.0% 10.0% 0.0% 4.0% 7.0%
Short-Term Investments 0.0% 1.0% 3.0% 0.0% 0.0% 0.0%
100% 100%
Allowable securities must meet the reporting
requirements of the Securities and Exchange Commission
and must meet a “prudent expert” standard for investing.
In no case may the System have five percent (5%) or
more of System net position invested in any one
organization.
The Board’s investment policies and guidelines permit
investment in numerous specified asset classes to take
advantage of the non-correlated economic behavior of
diverse asset classes. The result is a well-diversified portfolio.
Custodial Credit Risk
Custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, the System will not be able to recover the value of its investment or collateral securities that are in the
possession of another party. The Retirement System’s
investment securities are not exposed to custodial credit risk since all securities are registered in the System’s name and held by the System’s custodial bank.
City of Fresno Employees Retirement System l FINANCIAL
Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 43 Custodial credit risk for deposits is the risk that, in the event of the failure of the depository financial institution, the System will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. Any cash associated with the System’s investment portfolios not invested at the end of a day is temporarily swept overnight to the Northern Trust Collective Short-Term Investment Fund.
That portion of the System’s cash held by the City in a Trust account as part of the City’s cash investment pool totaled $122,744 and $128,510 at June 30, 2025 and
2024, respectively. Accordingly, the System’s
investments in the pool are held in the name of the City and are not specifically identifiable.
Disclosure of the legal and contractual provisions of the City’s investment policy and carrying amounts by type of investments may be found in the notes to the City’s
separate Annual Comprehensive Financial Report for the
fiscal year ended June 30, 2025.
Credit and Interest Rate Risk
Credit risk associated with the System’s debt securities is identified by their ratings in the table below. Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. The
System has no general policy on credit and interest rate risk. The System limits its investments in below
investment grade bonds and monitors the interest rate risk inherent in its portfolio by measuring the duration of its portfolio.
The average duration of the System’s debt portfolios in years is also listed in the following table:
2025 2024
Type of Investment Fair Value
Credit
Quality Duration Fair Value
Credit
Quality Duration
Asset Backed Securities $ 31,381,315 AAA 0.89 $ 24,297,878 AA+ 0.78 Commercial Mortgage-Backed 9,151,494 AAA 4.09 13,369,970 AAA 4.40 Corporate Bonds 66,150,166 BBB+ 4.42 66,541,897 BBB+ 5.04 Fixed Income Derivatives - Futures 27,323,880 — 7.83 22,287,031 — 7.28 Non-Government Backed CMOs 2,118,046 AAA 2.45 1,291,602 AA 2.04 Preferred Stock 834,396 BB+ — 829,989 BB+ —
Government Agencies 3,826,258 BBB+ 6.25 3,268,200 BB- 6.32 Government Bonds 19,283,328 AAA 12.05 17,005,419 AAA 12.75 Gov't Issued Commercial Mortgage-Backed Securities 289,925 AAA 2.74 282,638 AAA 3.96 Government Mortgage-Backed Securities 82,663,963 AAA 6.68 72,943,090 AAA 7.25 Municipal/Provincial Bonds 1,921,698 A+ 7.14 1,573,662 A+ 8.10 Index Linked Government Bonds 759,083 AAA 13.922742 555,234 AAA 14.62 Total Credit Risk Fixed Income $ 245,703,552 $ 224,246,610 City of Fresno Employees Retirement System l FINANCIAL
Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 44 Per Section 3.5.f.i. of the System’s Investment Policy
Statement, no more than 15 percent of an investment
manager’s fixed income portfolio may be invested in
below investment grade rated securities (BB or B rated
bonds). Therefore, at least 85 percent of the manager’s fixed income portfolio must be invested in investment
grade securities. Intermediate Bond portfolios shall
maintain an average credit quality of A+ or better.
High yield fixed income portfolios, in accordance with
Section 3.5.f.ii. of the System’s Investment Policy
Statement, shall maintain an average credit quality rating equal to or higher than that of the Barclays US Corporate High Yield Index. Based on the Barclays US Corporate
High Yield Index, a high yield manager’s portfolio shall have a constraint of the benchmark weight plus five
percent (5%) in bonds rated Caa1/CCC+ or lower with
non-rated bonds being limited to five percent (5%) of the portfolio with both limits subject to maintaining the
average portfolio credit quality requirement of the
Barclays US Corporate High Yield index. No more than
25 percent of a high yield manager’s portfolio may be
invested in foreign securities; within this limit, a manager may allocate up to 20 percent in emerging market
government securities including both non-U.S. dollar
denominated securities and U.S. dollar denominated
Yankee securities and up to 15 percent of the portfolio may be invested in non-U.S. dollar denominated
securities.
High yield bond portfolios may hold up to the benchmark weight plus five percent (5%) of assets in Rule 144A
bond issues with or without registration rights. No more than 10 percent of the high yield manager’s portfolio may be invested in convertibles or preferreds, and no more
than 20 percent may be invested in securitized bank debt.
No single security and/or issuer can represent more than five percent (5%) of the fair value of a portfolio at the time of purchase, and no single industry can represent
more than 25 percent of the fair value of the account at the time of purchase.
Firms that manage fixed income portfolios will
continually monitor the risk associated with their fixed income investments. They will be expected to report, as a component of their quarterly report, a risk/reward analysis of the management decisions relative to their benchmarks.
Statistics that relate performance variance to effective duration decisions will be included in each quarterly
report.
Concentration Risk
The investment portfolio as of June 30, 2025 and 2024,
contained no concentration of investments in any one
entity (other than those issued or guaranteed by the U.S.
Government) that represented five percent (5%) or more
of the total investment portfolio or fiduciary net position.
Foreign Currency Risk
Foreign Currency Risk is the risk that changes in foreign exchange rates will adversely affect the fair value of an investment or deposit. The System has no general
investment policy with respect to foreign currency risk.
The System’s investment policy guidelines allow
international developed and emerging equity managers to hedge their currency risks in foreign countries through the purchase of derivatives. Used as a defensive measure and in an effort to control the risks associated with
international portfolios, international equity investment managers are permitted to invest in forward currency
contracts, swaps, currency futures, and exchanged-traded index futures that represent broad equity exposure to
countries represented in their respective benchmark index.
The positions shown on the following page represent the System’s exposure to foreign currency risk as of June 30, 2025 and 2024.
City of Fresno Employees Retirement System l FINANCIAL
Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 45 Foreign Currency Risk Exposure
As of June 30, 2025
Base Currency Country
Equities /
Fixed Income
Futures &
Forwards
Swaps &
Rights /
Warrants
Cash & Cash
Equivalents Total
AUD Australian Dollar Australia $ 1,001,415 $ — $ — $ — $ 1,001,415 BRL Brazilian Real Brazil 1,547,286 — — (76,854) 1,470,432 CAD Canadian Dollar Canada 12,897,252 — — — 12,897,252 CHF Swiss Franc Switzerland 5,114,556 — — — 5,114,556 CNY Chinese Yuan Renminbi China 2,548,590 — — 2 2,548,592 DKK Danish Krone Denmark 7,193,538 — — — 7,193,538 EUR Euro Europe 60,301,475 — — (107,502) 60,193,973 GBP British Pound Sterling United Kingdom 28,195,629 — — — 28,195,629 HKD Hong Kong Dollar Hong Kong 14,283,028 — — 16,611 14,299,639 IDR Indonesian Rupiah Indonesia 941,822 — — — 941,822 INR Indian Rupee India 6,250,981 — — 50 6,251,031
JPY Japanese Yen Japan 26,292,881 — — — 26,292,881 KRW South Korean Won South Korea 3,960,572 — — — 3,960,572 MXN Mexican Peso Mexico 1,231,679 — — — 1,231,679
RUB Russian Ruble Russia 648,745 — — 98,026 746,771 SEK Swedish Krona Sweden 3,766,887 — — — 3,766,887 SGD Singapore Dollar Singapore 893,836 — — — 893,836 TRY Turkish Lira Turkey 1 — — — 1
TWD New Taiwan Dollar Taiwan 8,573,712 — — (99,505) 8,474,207 USD United States Dollar United States 955,131,771 — 3,736 32,696,802 987,832,309 ZAR South African Rand South Africa 1,852,009 — — — 1,852,009 Total Equities (In USD) $ 1,142,627,665 $ — $ 3,736 $ 32,527,630 $ 1,175,159,031 Total Non-USD Equities (In USD) $ 187,495,894 $ — $ — $ (169,172) $ 187,326,722 City of Fresno Employees Retirement System l FINANCIAL
Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 46 Foreign Currency Risk Exposure
As of June 30, 2024
Base Currency Country
Equities /
Fixed Income
Futures &
Forwards
Swaps &
Rights /
Warrants
Cash & Cash
Equivalents Total
AUD Australian Dollar Australia $ 1,263,997 $ — $ — $ — $ 1,263,997 BRL Brazilian Real Brazil 1,192,777 — 805 2,470 1,196,052 CAD Canadian Dollar Canada 13,205,952 — — — 13,205,952 CHF Swiss Franc Switzerland 4,699,408 — — — 4,699,408 CNY Chinese Yuan Renminbi China 1,407,006 — — — 1,407,006 DKK Danish Krone Denmark 7,154,739 — — — 7,154,739 EUR Euro Europe 52,845,071 — — (84,944) 52,760,127 GBP British Pound Sterling United Kingdom 28,997,503 — — — 28,997,503 HKD Hong Kong Dollar Hong Kong 12,159,839 — — — 12,159,839 IDR Indonesian Rupiah Indonesia 1,416,925 — — — 1,416,925 ILS New Israeli Shekel Israel 426,231 — — — 426,231 INR Indian Rupee India 5,927,089 — — 844 5,927,933 JPY Japanese Yen Japan 30,460,210 — — — 30,460,210 KRW South Korean Won South Korea 7,577,343 — — — 7,577,343 MXN Mexican Peso Mexico 1,381,662 — — 22,786 1,404,448 MYR Malaysian Ringgit Malaysia 113,887 — — — 113,887 NOK Norwegian Krone Norway 236,973 — — — 236,973
RUB Russian Ruble Russia 718,790 — — 58,510 777,300 SEK Swedish Krona Sweden 8,552,500 — — — 8,552,500 SGD Singapore Dollar Singapore 763,512 — — — 763,512 TRY Turkish Lira Turkey 3 — — — 3
TWD New Taiwan Dollar Taiwan 11,467,335 — — — 11,467,335 USD United States Dollar United States 854,571,617 — (104,775) 24,956,578 879,423,420 ZAR South African Rand South Africa 1,022,403 — — — 1,022,403 Total Equities (In USD) $ 1,047,562,772 $ — $ (103,970) $ 24,956,244 $ 1,072,415,046 Total Non-USD Equities (In USD) $ 192,991,155 $ — $ 805 $ (334) $ 192,991,626 City of Fresno Employees Retirement System l FINANCIAL
Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 47 Per Section 3.5.e. of the System’s Investment Objectives and Policy Statement, assets in international equity
portfolios shall consist of liquid, publicly traded equity and equity like securities traded on major stock exchanges as well as cash and cash equivalents as necessary.
Securities will be primarily composed of foreign ordinary shares and depository receipts (American Depository
Receipts (ADR’s) and Global Depository Receipts
(GDR’s) including ADR’s and GDR’s that are 144A
securities). Securities that are 144A securities, including ADR and GDR 144A securities, are authorized
investments which in aggregate cannot exceed 10 percent of the portfolio. Primarily large capitalization securities may be held, although investments in small and mid
capitalization securities are also allowed. Firms will continually monitor their country, currency, sector and security selection risks associated with their international portfolios. All of the risks will be included in the
manager’s quarterly reports and performance attribution based on these factors will also be included.
The System’s complete Investment Objectives and Policy
Statement can be found on the System’s website at
www.CFRS-CA.org or by contacting the Retirement
Office at 2828 Fresno Street, Suite 201, Fresno, CA
93721.
Rate of Return
For the fiscal years ended June 30, 2025 and 2024, the
annual money-weighted rate of return on the assets of the System, net of investment expense, was 10.92 percent and
10.38 percent, respectively. The money-weighted rate of return expresses investment performance, net of
investment expense, adjusted for timing of cash flows and the changing amounts actually invested.
9 Derivatives
The Retirement Board has authorized certain investment
managers to invest in or otherwise enter into transactions involving derivative financial instruments when, in the judgment of management, such transactions are consistent with the investment objectives established for a specific investment manager’s assignment. The acceptable
investment purposes for the use of derivatives are as
follows:
a. Mitigation of risk (or risk reduction).
b. A useful substitute for an existing, traditional
investment. In certain circumstances it may be
cheaper, quicker or easier to invest in a
derivative instrument or security rather than
transacting in cash or in the traditional security
market.
c. To provide investment value to the portfolio
while being consistent with the System’s overall
and specific investment policies.
d. To obtain investment exposure which is
appropriate for the manager’s investment
strategy and the System’s investment guidelines,
but could not be made through traditional
investment securities.
The Retirement Board monitors and reviews each
investment manager’s securities and derivative position as well as the manager’s performance relative to established benchmark rates of return and risk measures. In
management’s opinion, derivative activities must be
evaluated within the context of the overall portfolio
performance and cannot be evaluated in isolation.
City of Fresno Employees Retirement System l FINANCIAL
Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 48 Allowable derivative financial instruments held by the
System include stable and well-structured collateralized mortgage obligations (CMOs); centrally cleared
instruments including, but not limited to, futures, swaps and options; and forwards including currency forwards.
Derivative investments with allocation limits include
mortgage derivatives (interest only and principal only
CMOs); non centrally cleared derivatives; caps and floors; and inverse floating rate notes and bonds. Allocation
limits will be determined and specified in portfolio
guidelines with individual investment managers based on the objectives and risk tolerances of a given strategy.
Cash securities containing derivative features include
callable bonds, structural notes, and collateralized
mortgage obligations (CMOs). These instruments are
generally traded in over-the-counter bond markets.
Financial instruments whose value is dependent upon a
contractual price or rate relative to one or more reference prices or rates, applied to a notional amount, including interest rate futures, options, swaps and caps, and foreign currency futures and forward contracts. Some of these
instruments are exchange-traded and others are traded
over-the-counter (OTC).
Market Risk
Market risk is the risk of change in fair value of an
instrument in response to changes in a market price or
index. While all investments are subject to market risk, derivatives often have a higher degree of market risk than other types of investment instruments. Values of cash
securities containing derivative features are often more susceptible to market risk than other types of fixed
income securities because the amounts and/or timing of
their scheduled cash flows may fluctuate under changing market conditions, according to their contractual terms.
For other types of derivatives, amounts of contractual
cash flows may be either positive or negative depending upon prevailing market conditions relative to the
reference prices or rates, and thus the values of such
instruments may be positive or negative, despite the fact that little or no cash is initially exchanged to enter into such contracts.
Credit Risk
Credit risk of cash securities containing derivative
features is based upon the credit worthiness of the issuers of such securities. The Retirement Board establishes
minimum credit requirements for such securities. The
other derivative instruments described above are subject to credit risk to the extent their value is a positive fair value, and the counterparty to such contract fails to
perform under the terms of the instrument.
Exchange traded derivatives are generally considered to be of lower credit risk than OTC derivatives due to the exchange margin requirements. Equity Index Swaps are
derivatives and represent an agreement between two
parties to swap two sets of equity values. Equity Futures are contracts used to replicate an underlying stock or
stock market index. These futures can be used for
hedging against an existing equity position, or for
speculating on future movement of the index.
City of Fresno Employees Retirement System l FINANCIAL
Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 49 As of June 30, 2025 and 2024, the System held a total fair value of $30,286,000 and $24,748,410, respectively, in
derivative holdings. These holdings consisted of Rights/ Warrants, and Foreign Currency Forwards and Futures
designed to synthetically create equity returns and are held as components of the System’s international equity investments, and a variety of ACWIexUS index related
futures as components of the System’s investments in
ACWIexUS Index Funds. Holdings also consist of
futures – interest rate contracts, options and swaps held as components of the System’s absolute return fixed income strategy. These derivatives are used for the purpose of synthetically creating equity returns, synthetically
creating floating rates and to buy or sell credit protection on the assets.
There is no net counterparty exposure for which there is a positive replacement cost to the fund. The details of these derivative holdings are as follows:
Derivative Type: FY 2025 FY 2024 FY 2025 - FY 2024
Notional Change in Fair
Amount Fair Value Fair Value Value
Foreign Currency Forward $(646,787) $640,512 $280,537 $ 359,975 Future Contracts - Domestic Fixed Income (27,323,880) 27,323,880 22,287,031 5,036,849 Future Contracts - International Equity Index — 2,315,818 2,283,869 31,949 Rights & Warrants — 2,056 1,750 306
Swaps — 3,734 (104,777) 108,511
Total $30,286,000 $24,748,410
Derivative Type: FY 2024 FY 2023 FY 2024 - FY 2023
Notional Change in Fair
Amount Fair Value Fair Value Value
Foreign Currency Forward $(279,302) $280,537 $671,474 $ (390,937) Future Contracts - Domestic Fixed Income (22,287,031) 22,287,031 9,038,418 13,248,613 Future Contracts - International Equity Index — 2,283,869 2,163,658 120,211 Rights & Warrants — 1,750 1,125 625
Swaps — (104,777) (115,800) 11,023
Total $24,748,410 $11,758,875
City of Fresno Employees Retirement System l FINANCIAL
Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 50 10 Securities Lending
The City of Fresno Municipal Code and the Board’s
policies permit the Retirement Boards of the City of
Fresno Fire and Police Retirement System and the City of Fresno Employees Retirement System (the Systems) to
use investments of both Systems to enter into securities lending transactions, i.e., loans of securities to broker- dealers and other entities for collateral with a
simultaneous agreement to return the collateral for the same securities in the future. The Systems have
contracted with Northern Trust, their custodian, to
manage the securities lending program for the Systems
and all securities held in a separately managed account are available for lending. As the securities lending agent, Northern Trust calculates collateral margins and accepts collateral in the form of cash or marketable securities and irrevocable bank letters of credit for all securities lending transactions. Transactions are collateralized at 102
percent of fair value (contract value) for domestic
securities and 105 percent of fair value (contract value) for international securities. Collateral is marked to market daily. When a loan is secured by cash, a rebate is
negotiated and the cash collateral is invested according to the guidelines in the collateral pool.
As designated by the Board, cash collateral is invested in Northern Trust’s Core U.S.A. Collateral Section (short- term investment pool), which, as of June 30, 2025 and
2024, had a weighted average duration of 83 days and 69 days, respectively, an average maturity of 15 days and 22 days, respectively, and an average monthly yield of 4.56 percent and 5.51 percent, respectively. The relationship between the maturities of the investment pool and the
System’s loans is affected by the maturities of the security loans made by other entities that use the Northern Trust Core U.S.A. Collateral Section and a definitive statement of that relationship cannot be formulated by the System.
As of June 30, 2025 and 2024, the Northern Trust CORE
U.S.A. Cash Collateral Fund had zero exposure in below
investment grade long-term securities and there were no known credit risks related to the securities lending
transactions.
As of June 30, 2025, the fair value of the securities on loan was $24.3 million. The fair value of associated
collateral was $24.9 million ($21.7 million of cash
collateral and $3.2 of non-cash collateral). Non-cash
collateral, the collateral which the System does not have the ability to sell unless the borrower defaults, is not reported in the Statement of Fiduciary Net Position. As of June 30, 2024, the fair value of the securities on loan was $27.0 million. The fair value of associated collateral was $27.9 million ($24.7 million of cash collateral and $3.2 of non-cash collateral). Non-cash collateral, the collateral which the System does not have the ability to sell unless the borrower defaults, is not reported in the Statement of Fiduciary Net Position.
Northern Trust will ensure that, in any agreement with a borrower, it retains its absolute right to terminate the agreement without cause, upon short notice and without
any penalty. The System cannot pledge or sell collateral securities received unless the borrower defaults. In the event of a borrower default, Northern Trust indemnifies the System against losses and will replace or reimburse the System for any borrowed securities not replaced. In general, the average term of all System loans is overnight or “on demand." All securities loans can be terminated on demand by either the lender or the borrower, although the average term of the System’s loans were approximately
151 days and 81 days, respectively, as of June 30, 2025 and 2024.
City of Fresno Employees Retirement System l FINANCIAL
Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 51 The System’s securities lending income is as follows:
Securities Lending Income
For Fiscal Years Ended June 30, 2025 and 2024
2025 2024
Gross Income $1,575,137 $1,522,511
Expenses:
Bank Fees 1,472,024 1,358,605
Total Expenses 1,472,024 1,358,605
Net Income from Securities Lending $103,113 $163,906
Fair Value of Loaned Securities
As of June 30, 2025 and 2024
FY 2025 FY 2024
Collateralized by Cash Securities Total Cash Securities Total U.S. Government & Agency $ 7,822,262 $ 309,591 $ 8,131,853 $ 7,786,973 $ 804,454 $ 8,591,427 Domestic Equities 2,658,103 — 2,658,103 3,426,281 12,511 3,438,792 Domestic Fixed 6,925,385 1,491,086 8,416,471 9,714,407 798,843 10,513,250 International Equities 3,847,481 1,249,918 5,097,399 3,054,348 1,404,301 4,458,649 Total Value $ 21,253,231 $ 3,050,595 $ 24,303,826 $ 23,982,009 $ 3,020,109 $ 27,002,118 Fair Value of Collateral Received for Loaned Securities As of June 30, 2025 and 2024
FY 2025 FY 2024
Collateralized by Cash Securities Total Cash Securities Total U.S. Government & Agency $ 7,944,103 $ 317,542 $ 8,261,645 $ 8,008,908 $ 829,601 $ 8,838,509 Domestic Equities 2,696,118 — 2,696,118 3,508,058 12,773 3,520,831 Domestic Fixed 7,046,676 1,523,868 8,570,544 9,984,458 815,481 10,799,939 International Equities 4,057,712 1,333,055 5,390,767 3,236,526 1,488,057 4,724,583 Total Value $ 21,744,609 $ 3,174,465 $ 24,919,074 $ 24,737,950 $ 3,145,912 $ 27,883,862 City of Fresno Employees Retirement System l FINANCIAL
Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 52 11 Administrative Expenses
Section 3-325 of the City of Fresno Municipal Code
provides that all administrative costs of the System shall be a charge against the assets of the System. Per the City of Fresno Municipal Code, the administrative expenses
are a component of the City’s contribution calculation. 12 Post Retirement Supplemental
Benefit (PRSB)
The System is not obligated to provide for or fund any
other post-employment benefits as retirees do not receive paid healthcare benefits from the System. The Post
Retirement Supplemental Benefit (PRSB) Program was
created as a contingent program to provide supplemental distributions to eligible retirees which they could use to pay for various post retirement expenses. The Retirement Board will annually review the actuarial valuation report and declare an actuarial surplus, if available, in
accordance with the procedures in the City of Fresno
Municipal Code Section 3-567.
If an actuarial surplus is declared by the Board, the
surplus is allocated into two components. One component composed of two-thirds of the declared surplus shall be used to reduce or eliminate the City’s pension
contributions. Any unused portion shall be reserved in the City Surplus Reserve and drawn upon in subsequent years if needed. The remaining one-third component shall be
distributed among eligible post retirement supplemental benefit recipients in accordance with procedures in the City of Fresno Municipal Code Section 3-567(f)(4). Any
unused portion shall be reserved in the PRSB Reserve and drawn upon in subsequent years if needed.
For the fiscal years ended June 30, 2025, there was a
surplus (or prefunded actuarial accrued liability) as the System had a valuation value of assets which was in
excess of the actuarial accrued liability. The System’s funded ratio was 114.0 percent and 109.8 percent, for
fiscal years 2025 and 2024, respectively. For fiscal year 2025, the 114.0 percent funded ratio was more than the
110 percent requirement for declaration of a surplus.
Therefore, there was an actuarial surplus available to
reduce a portion of the City’s and members' COLA
contributions for fiscal year 2025, but no surplus to fund new PRSB benefits. For fiscal year 2024, the 109.8
percent funded ratio was below the required 110 percent for declaration of a surplus.
13 Capital Assets
Capital assets are carried at historical cost, net of
accumulated depreciation. Capital assets are any items of equipment or furnishings purchased with a value of or an initial cost of $500 or greater and $5,000 for land,
buildings and infrastructure and an estimated useful life in excess of two years.
Accumulated depreciation shall be summarized and
reflected on the System’s annual financial statements.
Capital assets shall be depreciated over their estimated useful lives using the straight-line depreciation method.
Intangible assets with limited useful lives (e.g., by legal or contractual provisions) should be depreciated over their estimated useful lives. Depreciation of computer software begins when the program is placed into service.
City of Fresno Employees Retirement System l FINANCIAL
Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 53 The System’s major two-year project to program and
install an upgrade to its original pension administration system that was installed in 1997 (the LRS Pension Gold Retirement Solutions’ Version 3 project) includes a
remaining uncapitalized balance of $0 and $132,959
which were capitalized as of June 30, 2025 and 2024,
respectively. The pension administration system was
depreciated over a ten-year useful life period commencing July 1, 2015.
As of June 30, 2025, other capital assets consisting of office furniture and equipment for the System’s
Retirement Offices located at 2828 Fresno Street, Fresno, California, in the amount of $76,145 are capitalized and depreciated over remaining estimated useful lives of 2-15 years.
As of June 30, 2024, capital assets consisting of office furniture and equipment for the System’s Retirement
Offices in the amount of $79,001 were capitalized and
depreciated over remaining estimated useful lives of 2-15 years.
14 Leases
Under the lease agreement with CFRS Realty Holding
Corporation (the Corporation), the holding corporation
formed jointly by the Retirement Boards to take
ownership of the building, effective September 19, 2005, the City of Fresno Employees and City of Fresno Fire and Police Retirement Boards and their staff occupy
approximately 7,900 square feet of the second floor of the renovated building at 2828 Fresno Street, Fresno,
California. The term of the lease is ten years with an option for two additional five-year extensions. The first five (5) year extension was exercised effective September 1, 2015. On March 1, 2020, the Corporation amended the lease with the Retirement Boards. The amended lease
agreement establishes the Retirement Boards as the sole tenant of the second floor, a total of 11,784 rentable
square feet, consisting of 10,426 net square feet in the premises and 1,358 square feet in common area. The
amendment also exercises the second five (5) year lease extension. As of June 30, 2025, the Systems share equally a base rent of $20,808 per month, which is $1.77 per
square foot per month, triple net. As of June 30, 2024, the Systems share equally a base rent of $20,400 per
month, which is $1.73 per square foot per month, triple net.
15 Related Party Transactions
The Retirement System is involved in various business
transactions with the City of Fresno, the primary plan
sponsor. These include reimbursement to the City for the salary and benefits of the System’s Retirement Staff
members paid through the City, reimbursement to the City Personnel Department for personnel consulting services, and reimbursement to the City Information Services
Department for computer and telephone support.
The Retirement Systems lease office space from the
CFRS Realty Holding Corporation, a title holding
company controlled jointly by the City of Fresno
Employees and City of Fresno Fire and Police Retirement Systems. See Note 14 for a description of this
arrangement.
City of Fresno Employees Retirement System l FINANCIAL
Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 54 16 Commitments and Contingencies
The Board, in accordance with its Asset Allocation Plan, has committed capital for investment in Private Debt/Private Credit, Private Real Estate and Private Equity Funds. The following table details the outstanding capital commitments in these investments as of June 30, 2025 and 2024.
Unfunded Commitments
Investment Type FY 2025 FY 2024 Investment Type FY 2025 FY 2024 Private Real Estate Funds Private Debt/Private Credit
Alidade Capital $ 3,323,923 $ 7,152,161 Arcmont $ 18,471,163 $ 22,105,712 Artemis 8,401,479 11,048,099 Cloverlay 9,801,279 9,453,143 Blue Vista 13,939,507 — Monroe Capital 19,303,195 19,299,655 Brookfield 4,671,849 4,493,624 Crescent Capital 17,792,971 17,789,709 The Carlyle Group 7,255,300 11,288,345 PIMCO COF 23,024,773 23,020,552 Grain Communications 9,728,548 8,222,430 Sixth Street/TAO 17,717,372 25,236,602 Kayne Anderson 2,546,445 7,627,035 Total $ 106,110,753 $ 116,905,373 Oaktree Capital Mgt. 1,971,306 1,970,945
PIMC BRAVO III — 10,407,754 Private Equity
PIMCO EDCO 37,067,342 — Asia Alternatives 67,435,187 6,592,393 PCCP, LLC 1,464,953 1,945,062 Ocean Avenue 5,152,445 — Total $ 90,370,652 $ 64,155,455 Pantheon 78,517,759 90,765,473 Volta Energy
Technologies 5,780,692 6,321,474
Total $ 156,886,083 $ 103,679,340
FY 2025 FY 2024
Total Unfunded Commitments $ 353,367,488 $ 284,740,168
17 Date of Management Review
The date to which events occurring after June 30, 2025, have been evaluated for possible adjustments to the financial statements or disclosures is December 3, 2025, which is the date the financial statements were available to be issued.
Except for the pending litigation described in Note 4, Risk Disclosure Related to Contribution Constraint, management has not identified any subsequent events requiring disclosure.
City of Fresno Employees Retirement System l FINANCIAL
Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 55 Schedule of Changes in the Net Pension Liability
(Dollars in Thousands)
For Fiscal Years Ended June 30, 2016-2025
GASB 67 Basis*
Financial Reporting
Change in Net Pension Liability 2025 2024 2023 2022 2021 Total Pension Liability
Service cost $54,669 $44,235 $37,299 $32,383 $30,993
Interest 113,727 105,949 99,304 96,311 93,358
Change of benefit terms — — — — —
Differences between expected and actual experience (8,592) 40,919 35,440 40,833 (12,980) Changes of assumptions 3,434 — — (4,262) —
Benefit Payments (including refunds, excluding PRSB) (89,409) (83,202) (77,873) (71,884) (69,246) Net Change in Total Pension Liability $73,829 $107,901 $94,170 $93,381 $42,125 Total Pension Liability - Beginning $1,674,885 $1,566,984 $1,472,814 $1,379,433 $1,337,308 Total Pension Liability - Ending (a)* $1,748,714 $1,674,885 $1,566,984 $1,472,814 $1,379,433 Plan Fiduciary Net Position
Employee Contributions $31,558 $18,833 $14,894 $15,493 $13,750 Employer Contributions 20,771 28,621 22,236 22,016 20,144 Net Investment Income (Loss) 198,803 169,858 164,014 (132,625) 407,811 Actual Benefit Payments (including Refunds) (89,409) (83,202) (77,873) (71,884) (69,246) Administrative & Professional Expense (2,616) (2,318) (2,145) (2,050) (2,059) Net Change in Plan Fiduciary Net Position $159,107 $131,792 $121,126 $(169,050) $370,400 Plan Fiduciary Net Position - Beginning $1,815,105 $1,683,313 $1,562,187 $1,731,237 $1,360,837 Plan Fiduciary Net Position - Ending (b) $1,974,212 $1,815,105 $1,683,313 $1,562,187 $1,731,237 System Net Pension Liability (Surplus) - (a)-(b) $(225,498) $(140,220) $(116,329) $(89,373) $(351,804) Plan fiduciary net position as a percentage of
total pension liability 112.90% 108.37% 107.42% 106.07% 125.50% Covered Payroll** 235,699 $213,088 $186,219 $164,642 $154,031 Net Pension Liability (Surplus) as a percentage of covered payroll (95.67)% (65.80)% (62.47)% (54.28)% (228.40)% * In accordance with provisions of GASB 67, the data on the next two pages show Total Pension Liability for the reporting periods from June 30, 2016 through June 30, 2025.
** Covered payroll represents pensionable compensation. Only pensionable compensation that would possibly go into the determination of retirement benefits is included.
Note to Schedule:
Changes of Assumptions: The calculations above reflect various assumption changes, including the Board's assumed rate of return of 6.75 percent for use in preparing the June 30, 2025 annual actuarial valuation and other assumption changes based on the triennial experience study for the period from July 1, 2021 through June 30, 2024. The assumed rate of return of 6.75 percent used in preparing the June 30, 2024, 2023, and 2022 annual actuarial valuation and other assumption changes were based on the triennial experience study for the period from July 1, 2018 through June 30, 2021. Assumption changes prior to June 30, 2022, are also reflected including the modification of the Board's assumed rate of return to 7.00 percent for use in preparing the June 30, 2019, 2020 and 2021 annual actuarial valuations and other assumption changes based on the triennial experience study for the period from July 1, 2015 through June 30, 2018. The calculations above also reflect the assumed rate of return of 7.25 percent for use in preparing the June 30, 2016, 2017 and 2018 annual actuarial valuations and other assumption changes based on the triennial experience study for the period from July 1, 2012 through June 30, 2015.
City of Fresno Employees Retirement System l FINANCIAL
Required Supplementary Information
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 56 Schedule of Changes in the Net Pension Liability Continued (Dollars in Thousands)
For Fiscal Years Ended June 30, 2016-2025
GASB 67 Basis*
Financial Reporting
Change in Net Pension Liability 2020 2019 2018 2017 2016 Total Pension Liability
Service cost $28,762 $23,509 $21,275 $18,885 $18,687
Interest 89,222 86,110 82,833 79,266 79,762
Change of benefit terms — — — — —
Differences between expected and actual experience 5,748 (446) (4,164) 5,263 (24,394) Changes of assumptions — 35,773 2,939 — 9,612
Benefit Payments (including refunds, excluding PRSB) (64,520) (62,144) (57,666) (55,550) (52,528) Net Change in Total Pension Liability $59,212 $82,802 $45,217 $47,864 $31,139 Total Pension Liability - Beginning $1,278,096 $1,195,294 $1,150,077 $1,102,213 $1,071,074 Total Pension Liability - Ending (a)* $1,337,308 $1,278,096 $1,195,294 $1,150,077 $1,102,213 Plan Fiduciary Net Position
Employee Contributions $11,028 $10,515 $10,330 $10,181 $9,098 Employer Contributions 16,554 14,627 14,609 15,205 13,060 Net Investment Income (Loss) 20,109 69,389 108,916 162,373 5,089 Actual Benefit Payments (including Refunds) (64,520) (62,144) (57,666) (55,550) (52,529) Administrative & Professional Expense (1,749) (1,663) (1,619) (1,387) (1,346) Net Change in Plan Fiduciary Net Position $(18,578) $30,724 $74,570 $130,822 $(26,628) Plan Fiduciary Net Position - Beginning $1,379,415 $1,348,691 $1,274,121 $1,143,299 $1,169,927 Plan Fiduciary Net Position - Ending (b) $1,360,837 $1,379,415 $1,348,691 $1,274,121 $1,143,299 System Net Pension Liability (Surplus) - (a)-(b) $(23,529) $(101,319) $(153,397) $(124,044) $(41,086) Plan fiduciary net position as a percentage of
total pension liability 101.76% 107.93% 112.83% 110.79% 103.73% Covered Payroll** $149,403 $138,396 $128,461 $119,007 $108,541 Net Pension Liability (Surplus) as a percentage of covered payroll (15.75)% (73.21)% (119.41)% (104.23)% (37.85)% City of Fresno Employees Retirement System l FINANCIAL
Required Supplementary Information Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 57 Schedule of Employer Contributions
Last Ten Fiscal Years
(Dollars in Thousands)
Fiscal Year
Ended June 30
Actuarially
Determined
Contribution (ADC)
Contributions in
Relation to the
ADC
Contribution
Deficiency
(Excess) Covered Payroll
Contributions as a
Percentage
of Covered Payroll
2025 $33,139 $31,558 $1,581 $235,699 13.39%
2024 28,621 28,621 — 213,088 13.43%
2023 22,236 22,236 — 186,219 11.94%
2022 22,017 22,017 — 164,642 13.37%
2021 20,144 20,144 — 154,031 13.08%
2020 16,554 16,554 — 149,403 11.08%
2019 14,627 14,627 — 138,396 10.57%
2018 14,609 14,609 — 128,461 11.37%
2017 15,205 15,205 — 119,007 12.78%
2016 13,060 13,060 — 108,541 12.03%
Schedule of Investment Returns
Last Ten Fiscal Years
Fiscal Year Annual Money-Weighted Rate of Return Annual Money-Weighted Rate of Return Ending June 30 Gross of Investment Expenses Net of Investment Expense 2025 11.07% 10.92%
2024 10.56% 10.38%
2023 9.74% 9.52%
2022 (7.12%) (7.28%)
2021 30.85% 30.43%
2020 1.61% 1.26%
2019 5.54% 5.20%
2018 8.93% 8.57%
2017 14.73% 14.35%
2016 0.82% 0.53%
The Schedule of Investment Returns above shows the annual money-weighted rate of return on the assets of the System, both gross and net of investment expense for ten fiscal years (2016 – 2025). The money-weighted rate of return expresses investment performance adjusted for timing of cash flows and the changing amounts actually invested. These returns differ slightly from the time-weighted rate of returns calculated and reported by the System’s custodian, Northern Trust (shown in the Transmittal Letter on page i and within the Investment Section beginning on page 64) and as independently reported by the System’s investment consulting firm, NEPC, LLC (shown in the Investment Section on pages 69-69). The System’s custodian and investment consulting firm must use time-weighted returns as opposed to money-weighted returns in order to meet Global Investment Performance Standards for the purposes of effectively evaluating and reporting the performance of the System's investment managers.
The time-weighted return method is a measure of the compound rate of return of a portfolio over a stated period of time. It requires a set of sub-period returns to be calculated whenever there is an external cash flow, such as a deposit or withdrawal from the portfolio. In essence, it calculates the geometric total and mean return as opposed to the arithmetic total and mean return. This method does not include or have any distortions created when money is deposited or withdrawn from a portfolio. This is in contrast to the money-weighted returns.
City of Fresno Employees Retirement System l FINANCIAL
Required Supplementary Information Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 58
For Fiscal Years Ended June 30, 2025 and 2024
Actuarial Assumptions
The Segal Company, the System’s actuary, performed the most recent annual actuarial valuation as of June 30, 2025, which computes the contribution requirements (employee and employer contributions rates for fiscal year 2027), and determines the funding status of the plan. The fiscal year 2025 contribution rates and assumptions were based on the actuarial valuation as of June 30, 2023; these assumptions are detailed below.
Valuation Date: Actuarially determined contribution rates are calculated as of June 30, two years prior to the end of the fiscal year in which contributions are reported.
Actuarial Cost Method: Entry Age Actuarial Cost Method
Amortization Method: Level percent of payroll.
Remaining Amortization Period: Effective with the June 30, 2013 valuation, any new UAAL established on each subsequent valuation as a result of actuarial gains or losses or plan amendments are amortized over separate 15-year declining periods (with the exception of temporary retirement incentives which are amortized over its own declining period of up to 5 years). Any new UAAL established as a result of changes in actuarial assumptions or methods at each valuation is amortized over separate 25-year declining periods. Any actuarial surplus (when the funded ratio is over 110%) will be amortized over a non-declining 30-year period.
Asset Valuation Method: Market value of assets less unrecognized returns from each of the last four annual accounting periods. Unrecognized returns are equal to the difference between the actual market return and the expected return on a market value basis and are recognized over a five-year period. The Actuarial Value of Assets is reduced by the value of the non-valuation reserves.
City of Fresno Employees Retirement System l FINANCIAL
Notes to the Required Supplementary Information
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 59 Actuarial Assumptions Continued:
Investment Rate of Return: 6.75%
Inflation Rate: 2.50%
Real Across-the-Board Salary Increase: 0.50%
Projected Salary Increases: Ranges from 3.75 percent to 11.50 percent based on years of service.
Includes inflation at 2.50% of retirement income, plus real across-the- board salary increase of 0.50% plus merit and promotion increases.
Cost-of-Living Adjustments: 2.50 percent of retirement income Other Assumptions: See June 30, 2023 funding valuation report and Section 4 for the service retirement rates after they have been adjusted to treat DROP participation as service retirement.
Post-Retirement Mortality Rates: For healthy members and beneficiaries, Pub-2010 General Healthy Retiree Amount-Weighted Mortality Table (separate tables for males and females) times 105%, projected generationally with the two-dimensional mortality improvement scale MP-2021; For disabled members, Pub-2010 Non- Safety Disabled Retiree Amount-Weighted Mortality Table (separate tables for males and females), projected generationally with the two- dimensional mortality improvement scale MP-2021.
City of Fresno Employees Retirement System l FINANCIAL
Notes to the Required Supplementary Information Continued Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 60 Schedule of Administrative Expenses
For Fiscal Years Ended June 30, 2025 and 2024
2025 2024
Personnel Services
Staff Salaries $ 977,785 $ 914,456
Fringe Benefits 271,137 254,160
Total Personnel Services $ 1,248,922 $ 1,168,616
Professional Services
Actuarial $ 118,155 $ 79,169
Legal Counsel 190,937 121,471
Information Systems Services 95,564 85,729
Specialized Services 72,086 130,297
Total Professional Services $ 476,742 $ 416,666
Communication
Telephone $ 9,655 $ 5,450
Postage 5,167 1,405
Total Communication $ 14,822 $ 6,855
Rentals
Office Rent $ 124,440 $ 122,000
Common Area Maintenance (CAM) Charges 147,949 81,948
Total Rentals $ 272,389 $ 203,948
Other
Education and Conference $ 118,377 $ 77,644
Membership & Dues 9,384 7,703
Subscriptions & Publications 581 831
Office Supplies 3,787 3,429
Computer Equipment 4,752 4,526
Equipment Lease 10,425 22,694
Insurance 91,188 78,239
Miscellaneous 8,816 9,114
Reimbursement to City for Inter-Dept Services 216,205 177,678 Depreciation 140,337 140,135
Total Other $ 603,852 $ 521,993
Total Administrative Expenses $ 2,616,727 $ 2,318,078
City of Fresno Employees Retirement System l FINANCIAL
Other Supplementary Information
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 61 Schedule of Investment Management Expenses
For Fiscal Years Ended June 30, 2025 and 2024
2025 2024
Investment Manager Fees
Equity
Domestic $ 57,009 $ 40,818
International 1,041,165 1,174,071
Private Equity 3,595,019 2,117,305
Fixed Income 352,139 334,207
Private Debt/Credit 15,543,924 20,138,744
Real Assets 8,327,807 7,477,991
Multi-Assets 1,131,828 816,897
Total Investment Manager Fees 30,048,891 32,100,033
Other Investment Expenses
Foreign Income Taxes & Related Services, Charges 1,555,233 1,674,293 Custodial Services 137,505 137,765
Investment Consultant 177,005 184,530
Investment Legal Counsel 80,548 97,381
Analytical Database Service 116,324 111,213
Total Other Investment Expenses 2,066,615 2,205,182
Total Fees & Other Investment Expenses 32,115,506 34,305,215 Securities Lending Expenses
Agent Fees 1,472,024 1,358,605
Total Securities Lending Expenses 1,472,024 1,358,605
Total Investment Expenses $ 33,587,530 $ 35,663,820
Schedule of Payments To Consultants
For Fiscal Years Ended June 30, 2025 and 2024
2025 2024
Actuarial Services $ 118,155 $ 79,169
Audit Services 23,069 22,817
City Information Services 95,564 85,729
Legal Services 190,937 121,471
Medical Consultant 31,700 55,620
Miscellaneous 17,317 51,860
Total Payments to Consultants $ 476,742 $ 416,666
City of Fresno Employees Retirement System l FINANCIAL
Other Supplementary Information Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 62 We promise to carry
out our Mission
through a competent,
professional, impartial
and open decision-
making process. In
providing benefits and
services, all persons
will be treated fairly,
with courtesy and
respect.
INVESTMENT
64 Investment Report from the Retirement Administrator
69 Investment Consultant’s Report
71 Investment Results (Gross and Net of Fees)
73 Target Asset Allocation and Actual Asset Allocation
75 Largest Stock and Bond Holdings
76 Schedule of Commissions
76 Investment Summary
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 63 Investment Report from the
Retirement Administrator
For the Years June 30, 2025 and 2024
Analysis of Our Portfolio in Fiscal Year 2025
The Retirement Board's (the Board) responsibility, as a long-term investor, is to manage in and through the global financial market environments as they unfold. Our Board understands the City of Fresno Employees Retirement
System’s (the System) portfolio requires a sound and
stable strategy for meeting investment goals over the long term with appropriate risk levels and controls.
Fiscal Year 2025 saw a bevy of exogenous factors that
had both positive and negative impacts on our portfolio, as well as the global financial markets. Over the first six months of the fiscal year, markets were fairly complacent as inflation continued its downward trend towards the
Fed’s desired level of 2%. However, after the new
Administration was sworn in, markets initially reacted
positively towards their stated goals until April. Tariffs were applied in a broad and indiscriminate manner to
every country, thereby roiling markets with short- and
medium-term uncertainty. They generated increased
volatility in the portfolio, which, due to the years-long restructuring towards increasing exposures to private
market assets, insulated it as designed.
While the yield curve continued to remain inverted, there is little expectation for a recession or prolonged
slowdown in growth which resulted in higher valuations
for public equities. Private market strategies continue to be challenged due to the lack of distributions and liquidity constraints due to a slowdown in transactions. Some
pockets, such as private debt, have seen an explosion in growth and popularity due to the current macro
environments globally. The United States Dollar
experienced significant weakness against a basket of peers over the last six months, which generated the worst period of performance in several decades. The Board approved a new Strategic Asset Allocation (SAA), that went into
effect on July 1, 2025, and included a new asset class
called ‘Opportunistic’ that is expected to produce
volatility dampening at the total fund level across
medium-term thematic investments.
From an investment perspective, infrastructure and private debt provided hedges to inflation while public equities rallied more than 15%. From a profit and loss
perspective, the total fund increased by $340 million. The strategic asset allocation that went into effect July 1, 2021 continued to diversify the portfolio over the long-term as all major asset class groupings continue to be defined by their respective ‘beta group’ for risk management
purposes.
The System generated a net return of 10.9% and
outperformed its policy benchmark by 0.3% in Fiscal
Year 2025, as reported by its custodian Northern Trust.
The System outperformed its assumed rate of return for
the fiscal year by more than 4%, and across longer
investment horizons, also outperformed its assumed rate of return and policy benchmark.
Public equities, led by a ‘risk-on’ sentiment, experienced another prosperous year but remained overweight by
6.1%. Existing and new commitments in Private Real
Estate, Infrastructure, Private Equity, and Opportunistic continue to be funded. All strategies earned positive
absolute performance. The System completed three
searches across Real Estate (Asian and European),
Opportunistic, and Private Equity.
City of Fresno Employees Retirement System l INVESTMENT Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 64 Investment Performance
The System earned a gross return of 11.08%. The table
below highlights the performance of each major asset
class provided by the System's custodian, Northern Trust.
These returns may differ slightly from the performance
reported by the System's investment consultant due to
rounding:
Asset Class Gross Return Net Return
Total Fund 11.08% 10.93%
Domestic Equity 15.26% 15.25%
International Equity 18.03% 17.67%
Private Equity 8.58% 8.58%
Rates/Credit 7.49% 7.40%
Real Assets 5.61% 5.31%
Multi-Assets 10.67% 10.67%
Fiscal Year-End Fund
Value $1,974,211,816
The System’s 10, 15 and 20-year long-term gross returns of 8.27, 9.30, and 7.57 percent, respectively, illustrate the System’s ability to achieve our long-term objectives over extended periods. Meanwhile, the System remains highly funded and well positioned to serve our members and
retirees.
The principal goals of the System’s Board in managing
the System’s Investment Portfolio are the following:
1) To fund the System’s benefit payments;
2) To assume a prudent risk posture to minimize the
cost of meeting the obligations of the System;
3) To comply with legal statutes and regulations; and
4) To maintain a fully funded pension status.
Presented in the graph below are the System’s Total Fund returns versus NEPC, LLC’s InvestorForce (IF) Public
Funds Universe (Gross of Fees), for plans with $1 billion or more in assets:
Period Ending June 30
Percentage %
City of Fresno Retirement Systems
Fiscal Year Total Fund and Median Fund Annual Returns
Fresno Total Fund (Gross of Fees) Weighted Benchmark Indexes IF Median Public Pension Fund
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
-10%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
City of Fresno Employees Retirement System l INVESTMENT Investment Report from the Retirement Administrator Continued Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 65 Summary of Portfolio Results
The fiscal year ended June 30, 2025, was marked by
increased volatility and uncertainty. The System
experienced a total gross return of 11.08 percent for the fiscal year ended June 30, 2025, outperforming the
System’s actuarial interest rate assumption of 6.75 percent by 4.33 percent and outperforming the System’s policy
benchmark (a weighted average of the fund’s asset classes and their respective benchmarks) return of 10.62 percent by 0.46 percent. The System’s ten-year annualized
returns averaged 8.27 percent, outperforming its policy benchmark return of 7.49 percent for the period by 0.78 percent. Over the longer term, our investment results
remain sound with annualized returns of 7.57 percent and
6.87 percent, respectively, over the past twenty and
twenty-five years. After paying all benefits and expenses of the System, the year-end value of the System reached $1.974 billion.
General Information
The System’s investment assets are managed by external
investment management firms. Professional investment
consultants, along with staff, closely monitor the activity of these managers and assist the Board with the
implementation of investment policies and long-term
strategies. The System’s goal is to fund benefit payments, while assuming a risk posture that is consistent with the Board’s risk tolerance, protecting against loss of
purchasing power by achieving rates of return above
inflation, and to maintain a fully funded pension status.
Summary of General Investment
Guidelines, Policies and Procedures
The Board, having the sole and exclusive authority and
fiduciary responsibility for the administration of the
System and its assets, has adopted an Investment Policy Statement which reflects the Board’s policies for
management of the System’s investments. The Board
reserves the right to amend, supplement or rescind this statement at any time. This Investment Policy Statement establishes the investment program goals and policies,
asset allocation policies, and beliefs. It also defines the principal duties of the Board, staff, investment managers, master custodian and consultants.
An integral part of the overall investment policy is the strategic asset allocation policy. This allocation mix is designed to provide return expectations that reflect
expected risk. This emphasizes a maximum
diversification of the portfolio that protects the System from declines that a particular asset class may experience in a given period. Both traditional assets (equities and fixed income) and non-traditional assets (real estate,
infrastructure, midstream energy, private equity, and
private debt) are included in the mix.
Total portfolio return, over the long-term, is directed toward achieving and maintaining a fully funded status
for the System. Prudent risk taking is warranted within the context of overall portfolio diversification to meet this objective. All activities will be conducted so as to serve the best interests of the System’s members and
beneficiaries.
City of Fresno Employees Retirement System l INVESTMENT Investment Report from the Retirement Administrator Continued Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 66 Summary of Proxy Voting Guidelines and
Procedures
In recognition of its duty to manage retirement plan assets in the best interest of the plan participants, the Board has established proxy voting guidelines and procedures which are intended to assist in the faithful discharge of the Board’s duty to vote proxies on behalf of plan
participants. These guidelines consist of preferences with respect to specific, recurring proxy-voting issues followed by a general statement of voting policies. The System
will at all times strive to cast proxy votes so as to advance the overall good of the System.
Specific Investment Results by Asset
Classification
As of June 30, 2025, the System’s portfolio was slightly over-weight in total equities, with 52.7 percent in total equities versus the target of 47.0 percent. Domestic
equities were slightly over-weight with 25.0 percent
versus the target of 21.0 percent, and international
equities with 20.0 percent were slightly over-weight of the international equities target of 18.0 percent. Private equity was slightly under-weight of the target of 8.0%
with 7.7%. Rates/Credit with 23.2 percent was under-
weight of its target of 26.0 percent, and real assets at 20.7 percent was 1.3 percent under-weight of its target of 22.0 percent. Multi-Asset investments represented 2.0 percent of the System's portfolio, which is 2.0 percent under-
weight of its target of 4.0 percent. Short-Term
investments represented 1.4% of the total portfolio, 0.4% over its target of 1.0%.
The investments were further diversified into the following asset classes and target percentages:
Asset Classification Actual Target
Equities
Domestic 25.0% 21.0%
International 20.0% 18.0%
Private 7.7% 8.0%
Rates/Credit
Core Fixed Income 11.4% 12.0%
Private Debt/Credit 11.8% 14.0%
Real Assets
Core Real Estate 9.2% 6.0%
Non-Core Real Estate 5.5% 9.0%
Infrastructure 6.0% 7.0%
Multi-Asset
Alternative Credit 2.0% 4.0%
Short-Term Investments 1.4% 1.0%
Total 100.0% 100.0%
City of Fresno Employees Retirement System l INVESTMENT Investment Report from the Retirement Administrator Continued Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 67 City of Fresno Employees Retirement System l INVESTMENT Investment Report from the Retirement Administrator Continued This asset class diversification allows the Joint Boards to monitor and adjust their risk in accordance with the Investment Policy Statement. The investment returns presented herein are based on the modified Dietz rate of return methodology. As Fiscal Year 2025 wrapped up, tariffs were top of mind for all investors globally. Domestic inflation remained sticky, above the Federal Reserve’s mandated level, the U.S. dollar had the worst start to a year in nearly half a century, and uncertainty gripped consumers and businesses alike. Even with all of these events, the U.S. economy has been far more resilient than expected relative to peers and the global stock markets continue to reach new highs. The System earned positive relative and absolute returns, with continued diversification across strategies and regions.
Respectfully submitted,
Robert T. Theller
Robert T. Theller, Esq.
Retirement Administrator
December 3, 2025
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 68 Investment Consultant’s Report
City of Fresno Employees Retirement System l INVESTMENT Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 69 City of Fresno Employees Retirement System l INVESTMENT Investment Consultant's Report Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 70 Investment Results (Gross of Fees)
Gross of Fees Ending June 30, 2025
Fair Value ($) % of Portfolio 1 Yr (%) 3 Yrs (%) 5 Yrs (%) 10 Yrs (%) Total Fund 4,317,906,747 100.00 11.20 10.50 10.39 8.28
Policy Index 11.00 9.81 9.61 7.53
InvMetrics Public DB > $1 Billion Median 10.29 9.27 8.98 7.36 Total Equity Composite 2,278,979,698 52.78 15.34 15.79 12.52 9.80 MSCI AC World All Cap Index (Net) 15.92 16.74 13.37 9.66 InvMetrics Public DB Global Equity Median 15.23 15.55 13.13 — Domestic Equity Composite 1,080,887,602 25.03 15.27 19.11 15.92 12.58 Domestic Equity Index 15.30 19.08 16.74 12.65
InvMetrics Public DB US Equity Median 13.85 17.63 15.44 12.08 Private Equity 333,712,589 7.73 8.59 5.91 15.63 —
Private Equity Index 7.90 7.91 16.74 —
International Equity Composite 864,379,507 20.02 18.12 15.01 8.97 7.01 International Equity Index 18.38 14.59 10.91 6.72
InvMetrics Public DB Global ex-US Equity Median 17.59 14.18 10.21 6.72 Total Rates/Credit Composite 1,084,118,797 25.11 7.66 7.49 5.63 5.13 Fixed Income Index 6.72 6.12 3.23 3.94
Blmbg. U.S. Aggregate Index 6.08 2.55 -0.73 1.76
InvMetrics Public DB Fixed Income Median 7.00 4.14 1.22 2.93 Public Fixed Income 491,034,852 11.37 7.12 4.34 0.82 2.81 Blmbg. U.S. Aggregate Index 6.08 2.55 -0.73 1.76
InvMetrics Public DB US Fixed Income Median 6.62 3.75 0.78 2.77 Private Credit 593,083,945 13.74 8.12 10.20 12.13 —
Private Credit Index 8.79 9.84 5.76 —
Real Assets 894,692,186 20.72 5.72 1.41 8.86 7.19
Real Estate Index 2.95 -5.96 2.81 4.75
InvMetrics Public DB Real Estate Public & Private Median 3.55 -4.66 3.87 5.28 Private Real Estate Composite 238,488,036 5.52 5.44 2.66 10.21 10.41 NCREIF ODCE 3.54 -5.43 3.42 5.35
Infrastructure 259,107,486 6.00 9.19 8.66 8.11 —
CPI + 4% (Unadjusted) 6.78 6.98 8.77 —
Cash & Equivalents Composite 60,116,066 1.39 4.51 2.31 3.34 2.27 90 Day U.S. Treasury Bill 4.68 4.56 2.76 1.96
Calculations are prepared by NEPC, LLC using a time-weighted rate of return based on fair values.
City of Fresno Employees Retirement System l INVESTMENT Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 71 Investment Results (Net of Fees)
Net of Fees Ending June 30, 2025
Fair Value ($) % of Portfolio 1 Yr (%) 3 Yrs (%) 5 Yrs (%) 10 Yrs (%) Total Fund $ 4,317,906,747 100.00 11.10 10.37 10.21 8.01 Policy Index 11.00 9.81 9.61 7.53
InvMetrics Public DB > $1 Billion Median 10.25 9.17 8.88 7.16 Total Equity Composite 2,278,979,698 52.78 15.24 15.65 12.42 9.74 MSCI AC World All Cap Index (Net) 15.92 16.74 13.37 9.66 InvMetrics Public DB Global Equity Median 14.66 14.97 12.24 8.30 Domestic Equity Composite 1,080,887,602 25.03 15.26 19.10 15.85 12.41 Domestic Equity Index 15.30 19.08 16.74 12.65
InvMetrics Public DB US Equity Median 13.76 17.45 15.26 11.61 Private Equity 333,712,589 7.73 8.59 5.91 15.63 —
Private Equity Index 7.90 7.91 16.74 —
International Equity Composite 864,379,507 20.02 17.86 14.68 8.64 6.66 International Equity Index 18.38 14.59 10.91 6.72
InvMetrics Public DB Global ex-US Equity Median 17.57 13.98 9.89 6.40 Total Rates/Credit Composite 1,084,118,797 25.11 7.57 7.40 5.56 5.09 Fixed Income Index 6.72 6.12 3.23 3.94
Blmbg. U.S. Aggregate Index 6.08 2.55 -0.73 1.76
InvMetrics Public DB Fixed Income Median 6.82 4.07 1.04 2.73 Public Fixed Income 491,034,852 11.37 6.91 4.17 0.67 2.66 Blmbg. U.S. Aggregate Index 6.08 2.55 -0.73 1.76
InvMetrics Public DB US Fixed Income Median 6.52 3.60 0.67 2.66 Private Credit 593,083,945 13.74 8.12 10.20 12.13 —
Private Credit Index 8.79 9.84 5.76 —
Real Assets 894,692,186 20.72 5.61 1.24 8.73 7.12
Real Estate Index 2.95 -5.96 2.81 4.75
InvMetrics Public DB Real Estate Public & Private Median 2.68 -4.98 3.62 4.75 Private Real Estate Composite 238,488,036 5.52 5.42 2.65 10.21 10.31 NCREIF ODCE 3.54 -5.43 3.42 5.35
Infrastructure 259,107,486 6.00 9.19 8.47 7.95 —
CPI + 4% (Unadjusted) 6.78 6.98 8.77 —
Cash & Equivalents Composite 60,116,066 1.39 4.50 2.31 3.33 2.27 90 Day U.S. Treasury Bill 4.68 4.56 2.76 1.96
Calculations are prepared by NEPC, LLC using a time-weighted rate of return based on fair values.
City of Fresno Employees Retirement System l INVESTMENT Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 72 Target and Actual Asset Allocation
As of June 30, 2025
Asset Class Current Target Allocation Range Actual
Domestic Equities 21.0% 15.0% - 36.0% 25.0%
International Equities 18.0% 10.0% - 25.0% 20.0%
Private Equity 8.0% 0.0% - 10.0% 7.7%
Core Fixed Income 12.0% 5.0% - 20.0% 11.4%
Private Debt/Credit 14.0% 5.0% - 20.0% 11.8%
Core Real Estate 6.0% 2.0% - 8.0% 9.2%
Non-Core Real Estate 9.0% 5.0% - 15.0% 5.5%
Infrastructure 7.0% 2.0% - 10.0% 6.0%
Alternative Credit 4.0% 0.0% - 10.0% 2.0%
Short-Term Investments 1.0% 0.0% - 3.0% 1.4%
Target Asset Allocation
As of June 30, 2025
Domestic Equities
21.0%
International Equities
18.0%
Private Equity
8.0%
Core Fixed Income
12.0%
Private Debt/Credit
14.0%
Core Real Estate
6.0%
Non-Core Real Estate
9.0%
Infrastructure
7.0%
Alternative Credit
4.0%
Short-Term Investments
1.0%
City of Fresno Employees Retirement System l INVESTMENT Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 73 Actual Asset Allocation
As of June 30, 2025
Domestic Equities
25.0%
International Equities
20.0%
Private Equity
7.7%
Core Fixed Income
11.4%
Private Debt/Credit
11.8%
Core Real Estate
9.2%
Non-Core Real Estate
5.5%
Infrastructure
6.0%
Alternative Credit
2.0%
Short-Term
Investments
1.4%
City of Fresno Employees Retirement System l INVESTMENT Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 74 Largest Stock Holdings (by Fair Value)
As of June 30, 2025
Shares Stock Holding Fair Value
1) 222,647 TAIWAN SEMICONDUCTOR MANUFACTURING TWD10 $ 8,079,070 2) 95,427 TENCENT HOLDINGS LIMITED HKD0.00002 6,114,595 3) 1,932 MERCADOLIBRE INC COM STK 5,050,755
4) 449,178 AIA GROUP LIMITED NPV 4,028,296
5) 43,792 CRH PLC EQUITY 4,027,888
6) 89,384 SAMSUNG ELECTRONICS CO KRW100 3,960,572
7) 4,474 ASML HOLDING NV EUR0.09 (POST SPLIT) 3,558,755 8) 33,329 NINTENDO CO JPY50 3,202,678
9) 87,156 DEUTSCHE TELEKOM AG NPV(REGD) 3,168,469
10) 51,579 UNILEVER PLC ORD GBP0.031111 3,127,628
Total Largest Stock Holdings $ 44,318,706
Largest Bond Holdings (by Fair Value)
As of June 30, 2025
Share/Par Coupon Maturity
Value Bond Holding Rate Date Fair Value
1) 3,466,157 UNITED STATES OF AMER TREAS BONDS DTD 4.125% 2053/08/15 $ 3,096,118 2) 3,039,910 FEDERAL HOME LN MTG CORP POOL #SD7526 2.500% 2050/10/01 2,563,557 3) 3,114,570 FNMA POOL #FM8308 2.0% DUE 07-01-2051 2.000% 2051/07/01 2,504,059 4) 2,579,918 FEDERAL HOME LN MTG CORP POOL #SD8244 4.000% 2052/09/01 2,403,880 5) 2,429,633 FEDERAL HOME LN MTG CORP POOL #RA7194 3.500% 2052/04/01 2,201,681 6) 2,372,033 FNMA 3.5% 04-01-2052 3.500% 2052/04/01 2,156,762 7) 2,225,432 FNMA POOL #FM7599 3.5% DUE 01-01-2051 3.500% 2051/01/01 2,026,360 8) 2,406,207 FEDERAL HOME LN MTG CORP POOL #SD1581 2.500% 2052/09/01 1,996,621 9) 1,915,306 UNITED STATES OF AMER TREAS BONDS 4.5% 4.500% 2044/02/15 1,850,664 10) 1,977,970 FNMA POOL #CB3594 3.5% DUE 05-01-2052 3.500% 2052/05/01 1,792,535 Total Largest Bond Holdings $ 22,592,237
A complete list of portfolio holdings is available upon request.
City of Fresno Employees Retirement System l INVESTMENT Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 75 Schedule of Commissions
For The Fiscal Year Ended June 30, 2025
Total Number of Commission
Brokerage Firm Commissions Shares Cost/Share
MORGAN STANLEY AND CO. INTRNTNAL PLC $ 6,626 1,357,806 $ 0.0049 BARCLAYS CAPITAL 5,304 20,847,365 0.0003
GOLDMAN SACHS INTERNATIONAL 3,959 17,913,490 0.0002
NOMURA SECURITIES NEW YORK 3,825 3,787,040 0.0010
MORGAN STANLEY AND CO., LLC 3,342 34,625,876 0.0001
JEFFERIES INTERNATIONAL LTD 2,994 580,279 0.0052
UBS AG LONDON BRANCH 2,925 169,041 0.0173
CITIGROUP GLOBAL MARKETS EUROPE AG 2,719 65,324 0.0416 GOLDMAN, SACHS AND CO. 2,537 32,933,847 0.0001
MERRILL LYNCH INTERNATIONAL LIMITED 2,422 341,026 0.0071 $ 36,653 112,621,094 $ 0.0003
All Other Brokerage Firms 41,641 1,106,035,494 0.00004 TOTAL $ 78,294 1,218,656,588 $ 0.0001
Investment Summary
For The Fiscal Year Ended June 30, 2025
Investment Value Percent of Fund
Investment
Management Fees
Equity
Domestic $ 488,146,784 24.8% $ 57,009
International 384,295,334 19.5% 1,041,165
Private Equity 154,513,736 7.8% 3,595,019
Fixed Income 245,703,554 12.5% 352,139
Private Debt/Credit 236,605,223 12.0% 15,543,924
Real Assets 413,794,591 21.0% 8,327,807
Multi-Assets 40,163,759 2.0% 1,131,828
Short-Term Investments 8,832,858 0.4% —
Total $ 1,972,055,839 100.0% $ 30,048,891
City of Fresno Employees Retirement System l INVESTMENT Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 76 Assets will be invested
and administered to
balance the need to
control risk with
superior performance.
We expect excellence
in all activities. We
will also be
accountable and act in
accordance with the
law.
ACTUARIAL
78 Actuarial Certification Letter
82 Summary of Actuarial Assumptions and Funding Method
84 Probabilities of Separation Prior to Retirement
85 Schedule of Active Member Valuation Data
86 Schedule of Retirees and Beneficiaries Added to or
Removed from Rolls
87 Solvency Test
88 Actuarial Analysis of Financial Experience
88 Schedule of Funding Progress
89 Major Benefit Provisions of the Retirement System
90 History of Employer Net Contribution Rates
City of Fresno Employees Retirement System l ACTUARIAL
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 77 Actuarial Certification Letter
City of Fresno Employees Retirement System l ACTUARIAL
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 78
City of Fresno Employees Retirement System l ACTUARIAL
Actuarial Certification Letter Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 79 City of Fresno Employees Retirement System l ACTUARIAL
Actuarial Certification Letter Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 80 City of Fresno Employees Retirement System l ACTUARIAL
Actuarial Certification Letter Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 81 Summary of Actuarial Assumptions and Funding Method
These actuarial assumptions and methods based on June 30, 2025 data were adopted by the City of Fresno Employees Retirement System (the System) Retirement Board on November 26, 2025, and are effective July 1, 2026.
Assumptions
Valuation Interest Rate: 6.75%
Inflation: 2.50%
Post-Retirement Mortality
(a) Service Retirement
Pub-2016 General Healthy Retiree Amount-Weighted
Above-Median Mortality Table (separate tables for
males and females) with rates increased by 10%,
projected generationally with the two-dimensional
mortality improvement scale MP-2021.
(b) Beneficiaries
Beneficiaries not currently in Pay Status • Pub-2016
General Healthy Retiree Amount-Weighted Above-
Median Mortality Table (separate tables for males
and females) with rates increased by 10%, projected
generationally with the two-dimensional mortality
improvement scale MP-2021.
Beneficiaries in Pay Status • Pub-2016 General
Contingent Survivor Amount-Weighted Above-
Median Mortality Table (separate tables for males
and females) with rates increased by 10%, projected
generationally with the two-dimensional mortality
improvement scale MP-2021.
(c) Disability Retirement
Pub-2016 Non-Safety Disabled Retiree Amount-
Weighted Mortality Table (separate tables for males
and females), projected generationally with the two-
dimensional mortality improvement scale MP-2021.
The Pub-2016 mortality tables and adjustments as shown
above reasonably reflect the mortality experience as of the measurement date. These mortality tables were adjusted
to future years using the generational projection to reflect future mortality improvement between the measurement
date and those years.
Pre-Retirement Mortality
Based upon the Analysis of Actuarial Experience during
the period July 1, 2021 through June 30, 2024.
Withdrawal Rates
Based upon the Analysis of Actuarial Experience during
the period July 1, 2021 through June 30, 2024.
Disability Rates
Based upon the Analysis of Actuarial Experience during
the period July 1, 2021 through June 30, 2024.
Service Retirement Rates
Based upon the Analysis of Actuarial Experience during
the period July 1, 2021 through June 30, 2024.
Assets
Five-year smoothed recognition of realized and unrealized capital gains and losses greater or lesser than the actuarial assumed rate of return.
City of Fresno Employees Retirement System l ACTUARIAL
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 82 Summary of Actuarial Assumptions and Funding Method Continued Funding Method
The System’s liability is being funded on the Entry Age Normal Actuarial Cost method. Entry age is the age of the member on their hire date. Normal Cost and Actuarial
Accrued Liability are compensation, as if the current
benefit formulas have always been in effect (i.e.,
“replacement life”).
The System’s funding policy for determining Total
Pension Liability (for funding purposes) uses a version of the Entry Age method whereby the Actuarial Accrued
Liability is fully accrued when a member retires from
employment after participating in DROP (Deferred
Retirement Option Program). While for financial
reporting purposes only, in accordance with
Governmental Accounting Standards Board (GASB)
Statement No. 67 (GASB 67) provisions, for determining
Total Pension Liability, the Actuarial Accrued Liability is fully accrued when a member either enters DROP or is
expected to elect DROP (See page 30 of the Financial
Section and pages 59 and 60 of the Required
Supplementary Information on the different actuarial
assumptions used for financial reporting versus funding progress).
DROP Member Assumed Retirement Rates
(%) by Years of Service
Age 10-15 15-20 20-25 25 & Over
50 0.00 1.00 2.00 2.00
55 8.00 30.00 35.00 50.00
60 4.00 18.00 25.00 10.00
65 4.00 5.00 20.00 10.00
70 4.00 5.00 5.00 10.00
Members are assumed to remain in DROP for seven
years.
Marriage Rates
It is assumed that 75% of all male members and 55% of
all female members will be married at retirement.
Age of Spouse
Male members are three years older than their spouses.
Female members are two years younger than their
spouses.
Cost-of-Living Adjustment (COLA)
Assumption
2.50% per year; Retiree COLA increases due to
Consumer Price Index (CPI) are limited to maximum at
3.00% per year.
Ultimate Salary Scale
Salary Scale is made up of merit and longevity, and
inflation components. The inflation component is equal to
2.50%; plus 0.50% real across-the-board salary increase.
The merit and promotion component varies by service and is illustrated below:
Years of Service
Merit and Promotion
Assumption (%)
< 1 year 10.00%
1 - 2 years 6.50%
2 - 3 years 5.50%
3 - 4 years 5.00%
4 - 5 years 4.00%
5 - 6 years 3.00%
6 - 10 years 2.25%
10 - 15 years 1.75%
15 - 20 years 1.50%
20 & Over 1.00%
City of Fresno Employees Retirement System l ACTUARIAL
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 83 Probabilities of Separation Prior to Retirement
Mortality
Rate (%)
Age Male Female
20 0.02 0.01
25 0.03 0.01
30 0.03 0.01
35 0.04 0.02
40 0.05 0.04
45 0.08 0.05
50 0.12 0.08
55 0.18 0.12
60 0.28 0.18
65 0.42 0.28
70 0.65 0.43
All pre-retirement deaths are assumed to be non-service connected.
Disability
Rate (%)
Age All Members
20 0.00
25 0.00
30 0.00
35 0.12
40 0.20
45 0.26
50 0.42
55 0.98
60 2.38
65 3.10
70 5.02
All disabilities are assumed to be non-service connected.
Applied only to actives with more than 10 years of service.
Termination
Rate (%)
Years of Service
Age Less than 1 1 - 2 2 - 3 3 - 4 4 - 5 5 & Above
20 17.00 15.00 14.00 12.00 12.00 12.00
25 15.00 11.00 11.00 9.00 8.00 9.00
30 15.00 9.00 8.00 7.00 7.00 6.00
35 14.00 8.00 6.00 6.00 5.00 5.00
40 14.00 7.00 6.00 5.00 4.00 4.00
45 13.00 6.00 6.00 5.00 3.00 3.00
50+ 13.00 5.00 5.00 5.00 2.00 0.00
Members with less than five years of service: 85% of are assumed to elect a withdrawal of contributions.
The remaining members are assumed to elect a deferred vested benefit. No termination is assumed after a member is assumed to retire.
Members with five or more years of service : 35% of are assumed to elect a withdrawal of contributions.
The remaining members are assumed to elect a deferred vested benefit. No termination is assumed after a member is assumed to retire.
City of Fresno Employees Retirement System l ACTUARIAL
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 84 Schedule of Active Member Valuation Data
% Increase
Valuation Annual Annual (Decrease)
Date Active/DROP Number Payroll Average Pay in Average Pay June 30, 2025 Active Members 2,848 $ 234,475,449 $ 82,330 3.3% DROP Participants 201 18,405,683 91,571 1.3%
Totals 3,049 $ 252,881,132 $ 82,939
June 30, 2024 Active Members 2,759 $ 219,934,550 $ 79,715 9.8% DROP Participants 204 18,432,604 90,356 11.2%
Totals 2,963 $ 238,367,154 $ 80,448
June 30, 2023 Active Members 2,447 $ 177,732,502 $ 72,633 4.0% DROP Participants 247 20,074,374 81,273 6.2%
Totals 2,694 $ 197,806,876 $ 73,425
June 30, 2022 Active Members 2,157 $ 150,701,875 $ 69,866 1.6% DROP Participants 274 20,973,759 76,547 4.6%
Totals 2,431 $ 171,675,634 $ 70,619
June 30, 2021 Active Members 2,009 $ 138,130,869 $ 68,756 1.6% DROP Participants 304 22,241,215 73,162 1.6%
Totals 2,313 $ 160,372,084 $ 69,335
June 30, 2020 Active Members 1,952 $ 132,156,485 $ 67,703 4.6% DROP Participants 336 24,198,036 72,018 5.4%
Totals 2,288 $ 156,354,521 $ 68,337
June 30, 2019 Active Members 1,890 $ 122,353,908 $ 64,738 4.9% DROP Participants 338 23,103,904 68,355 3.9%
Totals 2,228 $ 145,457,812 $ 65,286
June 30, 2018 Active Members 1,812 $ 111,852,669 $ 61,729 3.4% DROP Participants 351 23,093,533 65,794 3.3%
Totals 2,163 $ 134,946,202 $ 62,388
June 30, 2017 Active Members 1,715 $ 102,354,521 $ 59,682 4.4% DROP Participants 370 23,560,592 63,677 3.9%
Totals 2,085 $ 125,915,113 $ 60,391
June 30, 2016 Active Members 1,592 $ 91,007,785 $ 57,166 (1.1%) DROP Participants 366 22,428,051 61,279 1.3%
Totals 1,958 $ 113,435,836 $ 57,935
City of Fresno Employees Retirement System l ACTUARIAL
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 85 Schedule of Retirees and Beneficiaries Added to
or Removed from Rolls
Added to Rolls Removed from Rolls Rolls at Fiscal Year-End Fiscal Year
Ended June 30 Number
Annual
Allowance Number
Annual
Allowance Number
Annual
Allowance
Average
Annual
Allowance
% Increase /
(Decrease)
in Retiree
Allowance
June 30, 2025 116 $1,936,426 (75) $(1,141,509) 2,344 $87,217,530 $37,209 5.07 June 30, 2024 146 $1,978,905 (69) $(982,834) 2,303 $81,555,616 $35,413 3.69 June 30, 2023 135 $1,745,057 (76) $(957,058) 2,226 $76,024,703 $34,153 5.37 June 30, 2022 130 $1,999,381 (92) $(837,691) 2,167 $70,239,143 $32,413 2.24 June 30, 2021 106 $1,787,137 (53) $(897,401) 2,129 $67,497,485 $31,704 3.50 June 30, 2020 95 $1,796,078 (54) $(655,652) 2,076 $63,591,967 $30,632 2.50 June 30, 2019 120 $1,905,246 (55) $(672,253) 2,035 $60,814,434 $29,884 4.68 June 30, 2018 114 $1,570,066 (60) $(834,397) 1,970 $56,241,911 $28,549 0.64 June 30, 2017 135 $1,458,929 (68) $(786,272) 1,916 $54,350,851 $28,367 2.44 June 30, 2016 123 $1,578,451 (64) $(898,105) 1,849 $51,198,523 $27,690 1.00 City of Fresno Employees Retirement System l ACTUARIAL
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 86 Solvency Test (In thousands)
Portion of Accrued Liabilities
Aggregate Accrued Liabilities for Covered by Reported Asset Valuation
Date As Of
June 30
Active Member
Contributions
Retirees and
Beneficiaries
(Includes
Deferred Vested)
Active Members
(Employer
Financed Portion)
Actuarial
Valuation
Value of
Assets
Active
Member
Contributions
Retirees and
Beneficiaries
(Includes
Deferred
Vested)
Active
Members
(Employer
Financed
Portion)
6/30/2025 $139,163 $1,072,229 $309,049 $1,732,580 100% 100% 100% 6/30/2024 127,682 1,032,718 297,347 1,600,473 100% 100% 100% 6/30/2023 113,940 993,305 250,969 1,509,532 100% 100% 100% 6/30/2022 107,780 931,923 232,059 1,449,730 100% 100% 100% 6/30/2021 102,090 870,147 217,743 1,380,265 100% 100% 100% 6/30/2020 97,041 847,631 210,388 1,269,173 100% 100% 100% 6/30/2019 92,076 819,374 195,210 1,238,651 100% 100% 100% 6/30/2018 87,404 798,382 161,906 1,202,691 100% 100% 100% 6/30/2017 84,476 768,142 161,066 1,145,061 100% 100% 100% 6/30/2016 84,142 736,665 156,102 1,087,125 100% 100% 100% City of Fresno Employees Retirement System l ACTUARIAL
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 87 Actuarial Analysis of Financial Experience
(Dollars in Millions)
Plan Years
2025 2024 2023 2022 2021 2020 2019 2018 2017 2016
Prior Valuation Actuarial Accrued Liability $1,458 $1,358 $1,272 $1,190 $1,155 $1,107 $1,048 $1,014 $977 $960 Expected Increase from Prior Valuation — — — — — — — — — — Salary Increase (Greater) Less than Expected (11) 21 8 4 (3) 3 5 1 5 (7) Asset Return (Less) Greater than Expected — — — — — — — — — — COLA Increase Greater (Less) than Expected 3 8 29 40 (9) (3) (8) (6) (7) (18) Other Experience 12 18 3 3 3 6 3 (2) 3 (6)
Economic Assumption Changes (5) — — (10) — — 21 3 — 8
Noneconomic Assumption Changes — — — — — — — — — —
Normal Cost 55 45 39 34 33 31 26 24 21 22
Interest 97 90 85 82 80 76 74 72 70 71
Payments (89) (83) (78) (71) (69) (65) (62) (58) (55) (52) Change in Valuation Programs and Methods — — — — — — — — — (1) Ending Actuarial Accrued Liability $1,520 $1,457 $1,358 $1,272 $1,190 $1,155 $1,107 $1,048 $1,014 $977 Schedule of Funding Progress
(Dollars in Millions)
(6)
(1) (2) (4) Prefunded /
Actuarial Actuarial (3) Prefunded / (5) (Unfunded AAL)
Actuarial Valuation Accrued Percentage (Unfunded Annual Percentage of Valuation Value of Liability Funded AAL) Covered Covered Payroll As of June 30 Assets (AAL) (1) / (2) (2) - (1) Payroll [(2) - (1)] / (5) 2025 $1,733 $1,520 114.0% $212 $253 83.90%
2024 $1,600 $1,458 109.8% $143 $238 59.90%
2023 $1,510 $1,358 111.1% $151 $198 76.50%
2022 $1,450 $1,272 114.0% $178 $172 103.70%
2021 $1,380 $1,190 116.0% $190 $160 118.70%
2020 $1,269 $1155 109.9% $114 $156 73.00%
2019 $1,239 $1107 111.9% $132 $145 90.70%
2018 $1,203 $1048 114.8% $155 $135 114.90%
2017 $1,145 $1014 113.0% $131 $126 104.30%
2016 $1,087 $977 111.3% $110 $113 97.20%
City of Fresno Employees Retirement System l ACTUARIAL
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 88 Major Benefit Provisions of the Retirement System
ELIGIBLE EMPLOYEES
All non-Fire and Police employees who enter service after July 1, 1952, and are certified from a civil service list for permanent employment.
FINAL AVERAGE SALARY (FAS)
Highest three consecutive-year average using the rate of pay in effect at the time of retirement.
NORMAL RETIREMENT
Requirement: age 55 and 5 years of service.
Benefit: Sum of (1) and (2) times (3)
(1) 2% of FAS times years of service, not-to-exceed
25 years
(2) 1% of FAS times years of service in excess of 25
years
(3) RETIREMENT AGE FACTOR TABLE
Age Factor Age Factor
55 1.000 61 1.140
56 1.020 62 1.180
57 1.040 63 1.220
58 1.060 64 1.260
59 1.080 65 1.300
60 1.100 Add .01 for every
quarter after age 65
EARLY RETIREMENT PROVISION
An employee who is age 50 with 5 years of continuous service may elect an early retirement and shall have his or her retirement allowance reduced by the early retirement actuarial adjustment factor.
DEFERRED RETIREMENT OPTION PROGRAM (DROP)
An employee who is age 55 with 5 years of service may enter DROP. The eligibility age may be reduced to age 50 with 5 years of service if the employee elects an early retirement.
Retirement amount is calculated and monthly deposits are made to the employee’s DROP account while the employee continues to work up to maximum of 10 years.
DISABILITY RETIREMENT
Requirement: 10 years of service.
Benefit: 1.8 percent times FAS times years of service, if exceeds 1/3 of FAS; or 33-1/3%, or service retirement, if higher.
MEMBER CONTRIBUTIONS RATES
Basic rates are based on a formula reflecting the age at entry into the System. The rates are such as to provide an average annuity, at age 55, of 1/150 of FAS for each of the first 25 years of service, plus 1/300 of FAS for each year of service after 25.
Member cost-of-living rates are designed to pay for one-half of the future cost-of-living increases.
DEATH BEFORE RETIREMENT
A. Before eligible to retire for disability (less than 5 years):
(1) One month's salary for each year of service, not-
to-exceed six months.
(2) Return of contributions with interest.
B. While eligible for service retirement:
Fifty percent (50%) of service retirement benefit to
eligible beneficiary.
C. With 5 or more years:
Fifty percent (50%) of service retirement benefit formula at age 55, based on years of service at death.
DEATH AFTER RETIREMENT
Fifty percent (50%) of the member’s allowance continued to eligible spouse for life.
WITHDRAWAL OF BENEFITS
If less than five years of service, return of contributions. If more than five years of service, right to have vested deferred retirement benefit at normal retirement date.
POST RETIREMENT SUPPLEMENTAL BENEFIT (PRSB)
On August 27, 1998, the City Council adopted the Post
Retirement Supplemental Benefit (PRSB) Program which is intended to provide assistance to retirees to pay for various post- retirement expenses. Annually, after an actuarial study has been performed, the Retirement Board will review the availability of surplus earnings in the System and determine whether a benefit can be paid to eligible PRSB recipients. If a surplus is declared by the Board, PRSB benefit payments will be calculated for eligible recipients and payments for the following calendar year will begin in January.
COST-OF-LIVING BENEFITS
Based on the percentage change in Consumer Price Index (U.S. city-average for urban wage earners and clerical works –all items), limited to a five percent (5%) maximum change per year each July 1.
City of Fresno Employees Retirement System l ACTUARIAL
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 89 History of Employer Actuarial Determined Net Contribution Rates Employer Normal Employer Net Contribution
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
Fiscal Year Ending June 30 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Employer Normal 12.06 % 12.26 % 11.69 % 11.66 % 11.70 % 13.37 % 13.33 % 13.23 % 14.15 % 14.09 % Surplus Offset/Contribution Adjustment (0.02) % 0.51 % (0.30) % (1.08) % (0.59) % (0.34) % 0.02% (1.26) % (0.77) % (0.03) % Employer Net Contribution 12.04 % 12.77 % 11.39 % 10.58 % 11.11 % 13.03 % 13.35 % 11.97 % 13.38 % 14.06 % City of Fresno Employees Retirement System l ACTUARIAL
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 90 To create an environment
in which Board Members
can maximize their
performance as trustees.
To improve business
processes and our delivery
of services provided to
members and retirees.
To improve
communications with
members, retirees and the
employer.
STATISTICAL
92 Statistical Section Review
93 Schedule of Changes in Fiduciary Net Position
94 Schedule and Graph of Additions by Source
95 Schedule and Graph of Deductions by Type
96 Membership Information
City of Fresno Employees Retirement System l STATISTICAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 91 Statistical Section Review
This section provides additional historical perspective, context, and detail in order to provide a more comprehensive understanding of this year’s financial statements, note disclosures, and supplementary information which covers the benefits provided by the City of Fresno Employees Retirement System (System).
It also provides multi-year trend of financial and operation information to facilitate comprehensive understanding of how the organization’s financial position and performance has changed over time.
More specifically, the financial and operating information provides contextual data for the System’s net position, benefits, refunds, contribution rates and different types of retirement benefits.
The financial and operating trend information is located on the following pages.
City of Fresno Employees Retirement System l STATISTICAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 92 Schedule of Changes in Fiduciary Net Position
Last Ten Fiscal Years 2016 - 2025
(Dollars in Millions)
2025 2024 2022 2022 2021
Additions
Employer Contributions $ 31.6 $ 28.6 $ 22.2 $ 22.0 $ 20.1 Employee Contributions 20.8 18.8 14.9 15.5 13.7
Net Investment Income (Loss) 198.7 169.9 164.0 (132.6) 407.9 Total Additions 251.1 217.3 201.1 (95.1) 441.7
Deductions
Benefit Payments $ 87.2 $ 81.6 $ 76.0 $ 70.2 $ 67.5
Post Retirement Supplemental Benefits — — — — —
Refunds 2.2 1.7 1.8 1.6 1.7
Administrative 2.6 2.3 2.1 2.0 2.1
Total Deductions 92.0 85.6 79.9 73.8 71.3
Change in Fiduciary Net Position $ 159.1 $ 131.7 $ 121.2 $ (168.9) $ 370.4 2020 2019 2018 2017 2016
Additions
Employer Contributions $ 16.6 $ 14.6 $ 14.6 $ 15.2 $ 13.1 Employee Contributions 11.0 10.5 10.3 10.2 9.1
Net Investment Income (Loss) 20.1 69.4 109.0 162.4 5.0 Total Additions 47.7 94.5 133.9 187.8 27.2
Deductions
Benefit Payments $ 63.6 $ 60.8 $ 56.2 $ 54.4 $ 51.2
Post Retirement Supplemental Benefits — — — — —
Refunds 0.9 1.3 1.4 1.2 1.3
Administrative 1.7 1.7 1.6 1.4 1.3
Total Deductions 66.2 63.8 59.2 57.0 53.8
Change in Fiduciary Net Position $ (18.5) $ 30.7 $ 74.7 $ 130.8 $ (26.6) City of Fresno Employees Retirement System l STATISTICAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 93 Schedule and Graph of Additions by Source (In Thousands) Last Ten Fiscal Years 2016 - 2025
EMPLOYER CONTRIBUTIONS EMPLOYEE CONTRIBUTIONS
NET INVESTMENT INCOME (LOSS)
2016 2017 2018 2019 2020 2021 2022 2022 2024 2025
$-200,000
$-100,000
$0
$100,000
$200,000
$300,000
$400,000
$500,000
2016 2017 2018 2019 2020 2021 2022 2022 2024 2025
EMPLOYER CONTRIBUTIONS $ 13,060 $ 15,205 $ 14,609 $ 14,627 $ 16,554 $ 20,144 $ 22,017 $ 22,236 $ 28,621 $ 31,558 EMPLOYEE CONTRIBUTIONS 9,098 10,181 10,329 10,516 11,028 13,750 15,493 14,894 18,833 20,771 NET INVESTMENT INCOME (LOSS) 5,089 162,376 108,916 69,389 20,108 407,811 (132,626) 164,015 169,858 198,804 TOTAL $ 27,247 $ 187,762 $ 133,854 $ 94,532 $ 47,690 $ 441,705 $ (95,116) $ 201,145 $ 217,312 $ 251,133 City of Fresno Employees Retirement System l STATISTICAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 94 Schedule and Graph of Deductions by Type (In Thousands) Last Ten Fiscal Years 2016 - 2025
PROFESSIONAL & ADMINISTRATIVE REFUNDS
SURVIVORS NON-SERVICE DISABILITY
SERVICE DISABILITY SERVICE RETIREMENTS
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
$0
$20,000
$40,000
$60,000
$80,000
$100,000
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
SERVICE RETIREMENTS $ 42,031 $ 44,883 $ 46,548 $ 50,237 $ 52,798 $ 55,989 $ 58,624 $ 64,393 $ 68,999 $ 74,114 SERVICE DISABILITY 2,625 2,915 3,027 2,913 3,098 3,888 3,551 3,662 3,890 3,942 NON-SERVICE DISABILITY 1,744 1,602 1,654 1,344 1,370 1,304 1,731 1,313 1,320 1,309 SURVIVORS 4,799 4,951 5,013 6,320 6,326 6,316 6,333 6,657 7,347 7,853 REFUNDS 1,330 1,199 1,424 1,330 928 1,749 1,645 1,849 1,647 2,192
PROFESSIONAL &
ADMINISTRATIVE 1,346 1,389 1,619 1,663 1,748 2,058 2,050 2,145 2,317 2,616 TOTAL $ 53,875 $ 56,939 $ 59,285 $ 63,807 $ 66,268 $ 71,304 $ 73,934 $ 80,019 $ 85,520 $ 92,026 City of Fresno Employees Retirement System l STATISTICAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 95 Schedule of Average Benefit Payments
Years of Credited Service Fiscal Year
Average/
New
Retirement Effective Dates 5-10 10-15 15-20 20-25 25-30 30+ Retirees Period 7/1/24 to 6/30/25*
Average Monthly Pension Benefits $ 1,410 $ 1,969 $ 2,539 $ 3,200 $ 3,657 $ 4,218 $ 2,832 Average Monthly DROP Payment 154 48 1,758 3,092 2,594 1,063 1,452 Average Final Average Salary 8,067 7,026 6,061 5,057 4,625 5,752 6,098 Number of New Retired Members 18 11 27 15 12 4 87 Period 7/1/23 to 6/30/24*
Average Monthly Pension Benefits $ 1,493 $ 1,923 $ 2,657 $ 2,753 $ 3,565 $ 4,539 $ 2,822 Average Monthly DROP Payment — 93 1,410 1,547 1,953 2,538 1,257 Average Final Average Salary 7,451 6,308 6,174 5,119 6,108 5,885 6,174 Number of New Retired Members 13 18 37 16 18 5 107 Period 7/1/22 to 6/30/23*
Average Monthly Pension Benefits $ 879 $ 1,676 $ 2,515 $ 2,712 $ 2,899 $ 2,824 $ 2,251 Average Monthly DROP Payment — 1,029 1,269 1,599 1,931 2,173 1,334 Average Final Average Salary 5,888 5,224 5,787 5,356 4,766 3,412 5,072 Number of New Retired Members 19 24 28 21 14 3 109 Period 7/1/21 to 6/30/22*
Average Monthly Pension Benefits $ 1,474 $ 1,542 $ 2,188 $ 2,845 $ 3,631 $ 4,746 $ 2,738 Average Monthly DROP Payment — 271 935 1,377 2,207 2,213 1,167 Average Final Average Salary 9,611 4,978 5,427 5,677 6,344 6,956 6,499 Number of New Retired Members 15 15 26 23 14 8 101 Period 7/1/20 to 6/30/21*
Average Monthly Pension Benefits $ 1,387 $ 1,932 $ 2,079 $ 2,836 $ 3,198 $ 4,063 $ 2,583 Average Monthly DROP Payment — 860 924 2,006 2,471 2,756 1,503 Average Final Average Salary 8,449 5,748 5,524 5,500 5,205 6,514 6,157 Number of New Retired Members 11 17 24 22 12 11 97 *The Schedule of Average Benefit Payments includes information in accordance with GASB Statement No. 44 for the periods from July 1, 2016 through June 30, 2025.
City of Fresno Employees Retirement System l STATISTICAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 96 Schedule of Average Benefit Payments (Continued)
Years of Credited Service Fiscal Year
Average/
New
Retirement Effective Dates 5-10 10-15 15-20 20-25 25-30 30+ Retirees Period 7/1/19 to 6/30/20*
Average Monthly Pension Benefits $ 1,142 $ 1,630 $ 2,054 $ 2,627 $ 3,123 $ 3,234 $ 2,302 Average Monthly DROP Payment 214 321 1,041 2,048 2,685 3,223 1,589 Average Final Average Salary 7,385 5,322 5,029 5,727 5,243 5,238 5,657 Number of New Retired Members 8 25 21 14 6 5 79
Period 7/1/18 to 6/30/19*
Average Monthly Pension Benefits $ 1,477 $ 1,791 $ 1,927 $ 2,611 $ 3,447 $ 3,267 $ 2,420 Average Monthly DROP Payment — 218 539 1,627 2,323 2,389 1,183 Average Final Average Salary 5,817 6,114 4,750 5,114 6,243 4,825 5,477 Number of New Retired Members 8 29 22 16 13 11 99 Period 7/1/17 to 6/30/18*
Average Monthly Pension Benefits $ 822 $ 1,492 $ 1,777 $ 2,820 $ 2,462 $ 3,560 $ 2,156 Average Monthly DROP Payment — 277 594 1,549 1,569 2,473 1,077 Average Final Average Salary 5,746 5,217 4,478 6,058 4,559 5,679 5,290 Number of New Retired Members 7 18 22 22 10 10 89 Period 7/1/16 to 6/30/17*
Average Monthly Pension Benefits $ 976 $ 1,446 $ 2,448 $ 2,624 $ 2,851 $ 3,648 $ 2,332 Average Monthly DROP Payment 0 153 901 1,590 1,989 1,718 1,059 Average Final Average Salary 5,707 4,938 5,905 5,403 4,333 5,531 5,303 Number of New Retired Members 12 26 23 20 8 9 98
Period 7/1/15 to 6/30/16*
Average Monthly Pension Benefits $ 938 $ 1,567 $ 1,847 $ 2,606 $ 2,596 $ 2,402 $ 1,993 Average Monthly DROP Payment 108 227 542 1,698 1,263 1,476 886 Average Final Average Salary 5,576 5,480 5,048 5,325 4,961 4,395 5,131 Number of New Retired Members 14 23 24 16 20 11 108 *The Schedule of Average Benefit Payments includes information in accordance with GASB Statement No. 44 for the periods from July 1, 2016 through June 30, 2025.
City of Fresno Employees Retirement System l STATISTICAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 97 Retirees by Type of Benefit
As of June 30, 2025
Amount of Number of Type of Retirement*
Monthly Benefit Retirees 1 2 3
$1 - $1,000 284 221 1 62
$1,001 - $2,000 563 368 59 136
$2,001 - $3,000 506 381 57 68
$3,001 - $4,000 362 298 24 40
$4,001 - $5,000 228 195 9 24
$5,001 - $6,000 170 150 4 16
$6,001 - $7,000 92 78 6 8.00
> $7,000 139 134 1.00 4
Total 2,344 1,825 161 358
*Type of Retirement
1 - Service Retiree
2 - Disability Retiree
3 - Beneficiary/Continuant/Survivor
Amount of Number of Option Selected**
Monthly Benefit Retirees Unmodified Option 1 Option 2 Option 3 $1 - $1,000 284 147 63 60 14
$1,001 - $2,000 563 255 158 112 38
$2,001 - $3,000 506 210 116 129 51
$3,001 - $4,000 362 163 91 86 22
$4,001 - $5,000 228 84 58 64 22
$5,001 - $6,000 170 54 53 43 20
$6,001 - $7,000 92 37 25 23 7
> $7,000 139 54 24 46 15
Total 2,344 1,004 588 563 189
**Option Selected
Unmodified - Beneficiary receives 50% of the member's allowance Option 1 - Beneficiary receives lump sum of member's unused contributions Option 2 - Beneficiary receives 100% of member's reduced monthly benefit Option 3 - Beneficiary receives 75% of member's reduced monthly benefit City of Fresno Employees Retirement System l STATISTICAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 98 Schedule and Graph of Pension Benefit Payments
Deductions by Type
Last Ten Fiscal Years 2016 - 2025
(Dollars in Millions)
Service Retiree Benefits Disability Retiree Benefits Separation Death Benefits Misc
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Service Retiree Benefits $46.8 $49.9 $51.5 $56.6 $59.1 $62.3 $65.0 $71.0 $76.4 $82.0 Disability Retiree Benefits 4.4 4.5 4.7 4.2 4.5 5.2 5.3 5.0 5.2 5.2 Separation 1.1 1.1 1.4 1.2 0.8 1.3 1.2 1.8 1.5 2.1
Death Benefits 0.2 — — 0.1 0.1 0.4 0.4 0.1 0.1 0.1
Misc — — — — — — — — — —
Total Benefit Deductions $52.5 $55.5 $57.6 $62.1 $64.5 $69.2 $71.9 $77.9 $83.2 $89.4 City of Fresno Employees Retirement System l STATISTICAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 99 Schedule and Graph of Active Vested, Active Non-Vested and Deferred Membership History
Last Ten Fiscal Years 2016 - 2025
ACTIVE VESTED ACTIVE NON-VESTED DEFERRED
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
0 250
500
750
1000
1250
1500
1750
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
ACTIVE VESTED 1,462 1,405 1,285 1,266 1,295 1,319 1,384 1,410 1,458 1,461 ACTIVE NON-VESTED 492 674 887 965 993 994 1,051 1,284 1,509 1,591 DEFERRED 261 251 251 247 243 248 202 213 240 253
TOTAL 2,215 2,330 2,423 2,478 2,531 2,561 2,637 2,907 3,207 3,305 City of Fresno Employees Retirement System l STATISTICAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 100 Schedule and Graph of Retirees Pension Benefit Payments by Type of Benefit
Last Ten Fiscal Years 2016 - 2025
SERVICE RETIREMENTS SERVICE DISABILITY
NON-SERVICE DISABILITY SURVIVORS
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
0 100
200
300
400
500
600
700
800
900
1000
1100
1200
1300
1400
1500
1600
1700
1800
1900
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
SERVICE RETIREMENTS 1,398 1,454 1,498 1,551 1,583 1,633 1,673 1,730 1,791 1,825 SERVICE DISABILITY 82 89 92 95 99 104 105 109 111 110
NON-SERVICE DISABILITY 67 63 63 65 62 61 57 55 53 51
SURVIVORS 302 310 317 324 332 331 332 332 348 358
TOTAL 1,849 1,916 1,970 2,035 2,076 2,129 2,167 2,226 2,303 2,344 City of Fresno Employees Retirement System l STATISTICAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 101 Summary of Active Participants
NUMBER OF PENSIONABLE ANNUAL NET CHANGE IN
YEAR MEMBERS PAYROLL AVERAGE SALARY AVERAGE SALARY
2025 3,052 $235,698,611 $77,228 7.53%
2024 2,967 $213,088,002 $71,819 3.90%
2023 2,694 $186,218,911 $69,124 2.23%
2022 2,435 $164,642,390 $67,615 1.53%
2021 2,313 $154,030,657 $66,593 1.98%
2020 2,288 $149,402,670 $65,298 5.26%
2019 2,231 $138,395,785 $62,033 4.88%
2018 2,172 $128,461,461 $59,144 3.32%
2017 2,079 $119,006,918 $57,242 3.05%
2016 1,954 $108,541,068 $55,548 (0.63%)
Summary of Retirees
ANNUAL NET CHANGE
ANNUAL AVERAGE IN BENEFITS
NUMBER BENEFITS TO ALLOWANCE TO
YEAR OF RETIREES PARTICIPANTS (INDIVIDUAL) PARTICIPANTS 2025 2,344 $87,217,530 $37,209 5.07%
2024 2,303 $81,555,616 $35,413 3.69%
2023 2,226 $76,024,703 $34,153 5.37%
2022 2,167 $70,239,143 $32,413 2.24%
2021 2,129 $67,497,485 $31,704 3.50%
2020 2,076 $63,591,967 $30,632 2.50%
2019 2,035 $60,814,434 $29,884 4.68%
2018 1,970 $56,241,911 $28,549 0.64%
2017 1,916 $54,350,851 $28,367 2.44%
2016 1,849 $51,198,523 $27,690 0.61%
City of Fresno Employees Retirement System l STATISTICAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 102 Member and City Contribution Rates
Last Ten Fiscal Years 2016 - 2025
Member Rates City Contribution Rates
As of June 30 Basic at Entry Age Total
City Rate
Less
Prefunded Actuarial
Accrued Liability
(PAAL)
Net City
Contribution
RateFiscal Year Valuation Date 20 25 30 Basic COLA
June 30, 2025 June 30, 2023 6.37% 7.42% 8.86% 11.33% 2.76% 14.09% (0.033%) 14.06% June 30, 2024 June 30, 2022 5.9% 6.88% 8.21% 11.4% 2.75% 14.15% (0.77%) 13.38% June 30, 2023 June 30, 2021 5.21% 6.11% 7.33% 10.41% 2.82% 13.23% (1.26%) 11.97% June 30, 2022 June 30, 2020 6.09% 7.15% 8.57% 10.51% 2.82% 13.33% 0.02% 13.35% June 30, 2021 June 30, 2019 5.78% 6.79% 8.13% 10.55% 2.82% 13.37% (0.34%) 13.03% June 30, 2020 June 30, 2018 4.7% 5.56% 6.7% 9.09% 2.61% 11.70% (0.59%) 11.11% June 30, 2019 June 30, 2017 4.84% 5.72% 6.89% 9.14% 2.52% 11.66% (1.08%) 10.58% June 30, 2018 June 30, 2016 5.12% 6.05% 7.29% 9.18% 2.51% 11.69% (0.3%) 11.39% June 30, 2017 June 30, 2015 5.69% 6.69% 7.99% 9.5% 2.76% 12.26% 0.51% 12.77% June 30, 2016 June 30, 2014 5.69% 6.68% 7.98% 9.31% 2.75% 12.06% (0.02%) 12.04% Data Source: Annual Actuarial Valuation Reports
Economic Assumptions and Funding Method
Last Ten Fiscal Years 2016 - 2025
Valuation Date
as of Salary Cost-of-Living Inflation Funding
June 30 Interest Scale Adjustment (COLA) Component Method June 30, 2025 6.75% 1.0 - 10.0% 2.50% 2.50% Entry Age Normal June 30, 2024 6.75% .75- 8.5% 2.50% 2.50% Entry Age Normal June 30, 2023 6.75% .75 - 8.5% 2.50% 2.50% Entry Age Normal June 30, 2022 6.75% .75 - 8.5% 2.50% 2.50% Entry Age Normal June 30, 2021 7.00% .50 - 8.0% 2.75% 2.75% Entry Age Normal June 30, 2020 7.00% .50 - 8.0% 2.75% 2.75% Entry Age Normal June 30, 2019 7.00% .50 - 8.0% 2.75% 2.75% Entry Age Normal June 30, 2018 7.25% .25 - 8.0% 3.00% 3.00% Entry Age Normal June 30, 2017 7.25% .25 - 8.0% 3.00% 3.00% Entry Age Normal June 30, 2016 7.25% .25 - 8.0% 3.00% 3.00% Entry Age Normal Source: The Segal Company June 30, 2025, Actuarial Valuation Report City of Fresno Employees Retirement System l STATISTICAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 103 Benefits and Withdrawals Paid
Last Ten Fiscal Years 2016 - 2025
(In Thousands)
BENEFITS PRSB WITHDRAWALS
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
$0
$10000
$20000
$30000
$40000
$50000
$60000
$70000
$80000
$90000
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
BENEFITS $ 51,199 $ 54,351 $ 56,242 $ 60,814 $ 63,592 $ 67,497 $ 70,239 $ 76,025 $ 81,556 $ 87,218 PRSB — — — — — — — — — —
WITHDRAWALS 1,330 1,199 1,424 1,330 927 1,749 1,645 1,848 1,646 2,191 TOTAL $ 52,529 $ 55,550 $ 57,666 $ 62,144 $ 64,519 $ 69,246 $ 71,884 $ 77,873 $ 83,202 $ 89,409 City of Fresno Employees Retirement System l STATISTICAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 104 Average Monthly Benefits to Retirees
Last Ten Fiscal Years 2016 - 2025
(In Thousands)
Average Monthly Benefit Average Monthly PRSB
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
$0
$500
$1000
$1500
$2000
$2500
$3000
$3500
Average Monthly 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Benefit $2,307 $2,364 $2,379 $2,490 $2,553 $2,642 $2,701 $2,846 $2,951 $3,101 PRSB — — — — — — — — — —
Total Average Monthly $2,307 $2,364 $2,379 $2,490 $2,553 $2,642 $2,701 $2,846 $2,951 $3,101 City of Fresno Employees Retirement System l STATISTICAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 105
EXPECTATION OF LIFE
(Age and Service Retirees)
Years of Age
Male Female
20 25 30 35 40 45 50 55 60 65 70
0.00 0.20
0.40 0.60
0.80 Separation Rates Prior to Retirement
Due to Death*
Rate %
Age Male Female
20 0.02 0.01
25 0.03 0.01
30 0.03 0.01
35 0.04 0.02
40 0.05 0.04
45 0.08 0.05
50 0.12 0.08
55 0.18 0.12
60 0.28 0.18
65 0.42 0.28
70 0.65 0.43
*All pre-retirement deaths are assumed to be non-
service connected.
EXPECTATION OF LIFE
(Disabled Retirees)
Years of Age
20.00 25 30 35 40 45 50 55 60 65 70
0.00 2.00
4.00 6.00
Separation Rates Prior to Retirement
Due to Disability
Rate %
Age Rate (%)
20 0.00
25 0.00
30 0.00
35 0.12
40 0.20
45 0.26
50 0.42
55 0.98
60 2.38
65 3.10
70 5.02
City of Fresno Employees Retirement System l STATISTICAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 106 To attract, develop and
retain competent and
professional staff.
To achieve and
maintain superior
investment
performance on a risk
controlled basis
measured by the
Public Fund Universe.
COMPLIANCE
108 Independent Auditor’s Report on Internal Control Over Financial Reporting and On Compliance and Other Matters Based on an Audit of Financial Statements Performed in
Accordance with Government Auditing Standards
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 107 Independent Auditor’s Internal Control Letter
City of Fresno Employees Retirement System l COMPLIANCE Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 108 Independent Auditor’s Internal Control Letter Continued City of Fresno Employees Retirement System l COMPLIANCE Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 109