City of Fresno Fire and Police 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 Fire and Police 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 ......................................................................................................................................................... . 19 Statement of Changes in Fiduciary Net Position ....................................................................................................................................... 20 Notes to the Basic Financial Statements ................................................................................................................................................... . 21 Required Supplementary Information
Schedule of Changes in the Net Pension Liability ............................................................................................................................... 60 Schedule of Employer Contributions ................................................................................................................................................... 62 Schedule of Investment Returns .......................................................................................................................................................... . 62 Notes to the Required Supplementary Information ............................................................................................................................. . 63 Other Supplementary Information
Schedule of Administrative Expenses .................................................................................................................................................. 65 Schedule of Investment Management Expenses .................................................................................................................................. 66 Schedule of Payments to Consultants .................................................................................................................................................. . 66 Investment Section
Investment Report from the Retirement Administrator ............................................................................................................................. 68 Investment Consultant’s Report ................................................................................................................................................................ 74 Investment Results (Gross and Net of Fees) ............................................................................................................................................. 76 Target Asset Allocation and Actual Asset Allocation ............................................................................................................................... 78 Largest Stock and Bond Holdings ............................................................................................................................................................. 80 Schedule of Commissions ......................................................................................................................................................................... 81 Investment Summary ................................................................................................................................................................................. 81 City of Fresno Fire and Police Retirement System
Actuarial Section
Actuarial Certification Letter .................................................................................................................................................................... . 83 Summary of Actuarial Assumptions and Funding Method ....................................................................................................................... 87 Probabilities of Separation Prior to Retirement ........................................................................................................................................ . 89 Schedule of Active Member Valuation Data ............................................................................................................................................. 90 Schedule of Retirees and Beneficiaries Added to or Removed from Rolls ............................................................................................... 91 Solvency Test ............................................................................................................................................................................................ 92 Actuarial Analysis of Financial Experience .............................................................................................................................................. 93 Schedule of Funding Progress ................................................................................................................................................................... 93 Major Benefit Provisions of the Retirement System ................................................................................................................................. 94 History of Employer Actuarially Determined Net Contribution Rates ..................................................................................................... 96 Statistical Section
Statistical Section Review.......................................................................................................................................................................... 99 Schedule of Changes in Fiduciary Net Position ........................................................................................................................................ 100 Schedule and Graph of Additions by Source ............................................................................................................................................. 101 Schedule and Graph of Deductions by Type ............................................................................................................................................. 102 Membership Information
Schedule of Average Benefit Payments ............................................................................................................................................... 103 Retirees by Type of Benefit .................................................................................................................................................................. 105 Schedule and Graph of Pension Benefit Payments Deductions by Type ............................................................................................. 106 Schedule and Graph of Active Vested, Active Non-Vested and Deferred Membership History ......................................................... 107 Schedule and Graph of Retirees Pension Benefit Payments by Type of Benefit ................................................................................. 108 Summary of Active Participants and Retirees ...................................................................................................................................... 109 Member and City Contribution Rates .................................................................................................................................................. 110 Economic Assumptions and Funding Method ..................................................................................................................................... 111 Benefits and Withdrawals Paid ............................................................................................................................................................ 112 Average Monthly Benefits to Retirees ................................................................................................................................................. 113 Expectation of Life (Age and Service Retirees) .................................................................................................................................. 114 Expectation of Life (Disabled Retirees) ............................................................................................................................................... 114 Compliance Section
Independent Auditor’s Report on Internal Control .................................................................................................................................... 116 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 Fire and Police 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 Fire and Police Retirement System
The Fire and Police
Retirement System was
established on July 1,
1955 and is maintained
and governed by Articles 3
and 4 of the Fresno
Municipal Code.
The Fire and Police
Retirement System (the
System) provides
retirement allowances to
all full-time sworn safety
members employed by the
City of Fresno.
INTRODUCTION
i Letter of Transmittal
ix City of Fresno Fire and Police 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 Members and System Members:
As Retirement Administrator of the City of Fresno Fire and Police 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 120.9 percent and 116.2 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 Fire and Police 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 each 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, 9.3 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 safety pension defined benefit plan in California.
The Annual Comprehensive Financial Report (ACFR)
The Annual Comprehensive Financial Report (ACFR) of the City of Fresno Fire and Police 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 Fire and Police 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 Fire and Police 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 FIRE AND POLICE RETIREMENT SYSTEM AND ITS SERVICES
The Fire and Police Retirement System was established on July 1, 1955, under Charter Section 910 and is governed by Articles 3 and 4 of Chapter 3 of the City of Fresno Municipal Code. Effective August 27, 1990, the City of Fresno (the City) added a Second Tier that includes all full-time sworn Fire, Police, and Airport Safety personnel hired on or after that date.
The System provides retirement allowances to all full-time sworn safety members employed by the City of Fresno. In accordance with the provisions of the City of Fresno Municipal Code, the System provides lifetime retirement, disability, and death benefits to its safety members.
The Fire and Police 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 Articles 3 and 4 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 Fire and Police 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 sworn Fire Department members of the System, and one (1) employee who is elected by the Police and Airport Safety Officers of the System; both elected members serve a four-year term. The fifth and final member of the Board shall be 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 City of Fresno Municipal Code and the Board’s Rules, Regulations and Policies.
Major Initiatives
The Board, jointly with the City of Fresno Employees 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 Fire and Police 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 Fire and Police 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 Fire and Police 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 Fire and Police Retirement System is presented in this ACFR. As of June 30, 2025, the funded ratio of the Fire and Police Retirement System was 116.2 percent. The ratio of the valuation value of assets to actuarial accrued liabilities was 114.9 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 120.9 percent and 118.0 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 $1,850,523,000; the actuarial valuation value of assets amounted to $2,150,961,046; and the fair value of assets (including non-valuation reserves) amounted to $2,395,605,595. At June 30, 2024, the actuarial valuation value of assets amounted to $1,991,116,988; the fair value of assets (including non-valuation reserves) amounted to $2,203,370,816.
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 $295,151,681; while on an actuarial funding basis the valuation value of assets basis reflects a surplus of $300,438,046 and a funding ratio of 116.2 percent. At June 30, 2024, the net pension liability of the System indicated a surplus of $207,368,598 and a funding ratio of 114.9 percent. For financial reporting purposes, the Plan Fiduciary Net Position as a percentage of the Total Pension Liability is 114.05% and 110.39% 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 Fire and Police 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 Fire and Police 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 Fire and Police 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
Jonathan Lusk
Re-Elected June 2022
Term Expires June 2026
Represents Fire Members
Vice Chair
Donald Gross
Appointed May 2019
Term Continuous
Appointed by the Mayor and Confirmed by the Fresno City Council Lynn Bennink
Appointed June 2017
Term Continuous
Outside Member Appointed by the Retirement Board
Chris Cooper
Elected June 30, 2024
Term expires June 30, 2028
Represents Police Members
Lawrence French
Appointed November 2023
Term Continuous
Appointed by the Mayor and Confirmed by the Fresno City Council City of Fresno Fire and Police 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 Fire and Police 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 Fire and Police 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 81 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 Fire and Police Retirement System l INTRODUCTION Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 xi Organizational Structure
City of Fresno Fire and Police 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 Fire and Police 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 Fire and Police Retirement System l INTRODUCTION Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 xiv City of Fresno Fire and Police 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
19 Basic Financial Statements
21 Notes to the Basic Financial Statements
60 Required Supplementary Information
65 Other Supplementary Information
Independent Auditor’s Report
City of Fresno Fire and Police Retirement System l FINANCIAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 2 City of Fresno Fire and Police Retirement System l FINANCIAL Independent Auditor's Report Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 3 City of Fresno Fire and Police Retirement System l FINANCIAL Independent Auditor's Report Continued
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 Fire and Police 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 $2,395,605,595; as of fiscal year-end 2024, the assets of the System exceeded its liabilities by $2,203,370,816; and as of fiscal year-end 2023, the assets of the System exceeded its liabilities by $2,045,836,887.
The System’s net position restricted for pension benefits increased by $192,234,779 or 8.72 percent for fiscal year 2025; for the prior fiscal year 2024, total net position increased by $157,533,929 or 7.70 percent; and for the
prior fiscal year 2023, total net position increased by $154,759,691 or 8.18 percent, all primarily as a result of the performance of the domestic and global 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 116.2
percent. In general, this indicates that for every dollar of benefits due, we have approximately $1.16 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 114.9 percent; and as of June 30, 2023, the date of the previous annual actuarial valuation, the funded ratio for the System was 116.7 percent.
Additions to Fiduciary Net Position
Additions for the fiscal year 2025 increased $36,568,480 or 14.62 percent over the prior year from $250,211,125 to $286,779,605, which includes member contributions of
$13,580,439, employer contributions of $31,778,983, a
net investment income of $241,294,975 and net securities lending income of $125,208. The increase in additions for fiscal year 2025 was primarily driven by strong
performance in domestic and global investment markets.
Investment income rose by $34,952,067, representing
95.6 percent of the total increase in additions of
$36,568,480.
City of Fresno Fire and Police Retirement System l FINANCIAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 5 Fiscal year 2024 additions increased $12,113,501 or 5.09 percent over the prior year from $238,097,624 to
$250,211,125, which included member contributions of
$13,107,833, employer contributions of $30,635,176, a
net investment income of $206,269,024 and net securities lending income of $199,092. The increase in additions for fiscal year 2024 was primarily driven by strong
performance in domestic and global investment markets.
Net investment income rose by $7,492,114, representing
61.8 percent of the total increase in additions of
12,113,501.
For fiscal year 2023 additions increased $360,086,148 or 295.18 percent over the prior year from $-121,988,524 to $238,097,624, which included member contributions of
$12,053,687, employer contributions of $27,067,935, a
net investment income of $198,614,230 and net securities lending income of $361,772. Additions in fiscal year 2023 were almost entirely driven by an increase in net
investment income. Strong performance in the investment markets contributed $359,493,287 to the increase in
additions from the prior year, while combined employer
and employee contributions increased by $592,861
compared to the previous year.
Deductions from Fiduciary Net Position
Deductions for the fiscal year 2025 increased $1,867,630 or 2.02 percent over the prior fiscal year from
$92,677,196 to $94,544,826. Total deductions for fiscal year 2025 increased almost entirely due to retiree benefits.
Retiree benefits increased by $2,143,863 primarily due to an increase in the number of retirees
Fiscal year 2024 deductions increased $9,339,263 or
11.21 percent over the prior fiscal year from $83,337,933 to $92,677,196. In fiscal year 2024, the rise in deductions was almost entirely attributed to an increase in the retiree population and the associated benefit payments.
Retirement benefits grew by $9,019,285.
Fiscal year 2023 deductions increased $6,033,530 or 7.80 percent over the prior fiscal year from $77,304,403 to
$83,337,933. The primary driver for the increase
deductions in fiscal year 2023 was the growth in
retirement benefit payments, which totaled $4,876,846
over the previous fiscal year. This reflects the impact of a growing retiree population and the benefits paid during the previous fiscal year.
City of Fresno Fire and Police 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 $ 27,068 $ 30,635 $ 31,779
Employee Contributions 12,054 13,108 13,580
Net Investment Income (Loss) $ 198,976 206,468 241,421
TOTAL $ 238,098 $ 250,211 286,780
Employer Contributions Employee Contributions
Net Investment Income (Loss)
2023 2024 2025
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
City of Fresno Fire and Police 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 $ 77,662 $ 86,681 $ 88,825
PRSB 2,653 2,515 2,005
Refunds of Contributions 622 1,024 941
Administrative Expenses 2,401 2,457 2,774
TOTAL $ 83,338 $ 92,677 $ 94,545
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 Fire and Police 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 Fire and Police 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 116.2
percent, which means the System’s fund has
approximately $1.16 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 $2,395,605,595. All of the net position restricted for pension benefits is available 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 8.72 percent due to strong performance of the investment markets;
while in 2024, the System’s restricted fiduciary net
position increased by 7.70 percent due to strong
performance of the global investment markets; and also, due to strong investment performance in 2023, the
System’s restricted fiduciary net position increased by
8.18 percent (See Table 1).
In order to determine whether the $2.396 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 Fire and Police 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 – Fire and Police 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 $ 40,261,039 $ 39,651,135 $ 609,904 1.54% Investments at Fair Value 2,393,817,429 2,202,503,341 191,314,088 8.69% Total Assets $ 2,434,078,468 $ 2,242,154,476 $ 191,923,992 8.56% Total Liabilities 38,472,873 38,783,660 (310,787) (0.80%) Net Position Restricted for Pension Benefits $ 2,395,605,595 $ 2,203,370,816 $ 192,234,779 8.72% FY 2024 FY 2024
FY 2024 FY 2023
Increase/
(Decrease)
Amount
Increase/
(Decrease)
Percent
Current and Other Assets $ 39,651,135 $ 57,678,144 $ (18,027,009) (31.25%) Investments at Fair Value 2,202,503,341 2,047,638,561 154,864,780 7.56% Total Assets $ 2,242,154,476 $ 2,105,316,705 $ 136,837,771 6.50% Total Liabilities 38,783,660 59,479,818 (20,696,158) (34.80%) Net Position Restricted for Pension Benefits $ 2,203,370,816 $ 2,045,836,887 $ 157,533,929 7.70% 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
$2,500,000,000
City of Fresno Fire and Police 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 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 beginning on page 57.
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 3-353. 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.
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 3-354. PRSB is a supplemental benefit distributed to eligible participants in accordance with the City of Fresno Municipal Code
Section 3-354, 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.
City of Fresno Fire and Police Retirement System l FINANCIAL Management's Discussion and Analysis Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 12 City Surplus (Deficit) Reserves represent the 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 the City of Fresno Municipal Code Section 3-354 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 balance was negative for the fiscal years 2025, 2024 and fiscal year 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 Fire and Police 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 – Fire and Police Retirement System’s Reserves
As of June 30, 2025, 2024, and 2023 (In Thousands)
FY 2025 FY 2024 FY 2023
Employer Advance/Retired Reserves $ 2,006,204 $ 1,812,431 $ 1,665,409 Active Member (Employee) Reserves 230,286 231,916 219,157 DROP Reserves 160,658 157,476 158,724
PRSB Reserves 1,616 2,159 2,672
City Surplus (Deficit) Reserves (3,158) (611) (125)
Net Position Restricted for Pension Benefits $ 2,395,606 $ 2,203,371 $ 2,045,837
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
$2,000,000
$2,250,000
City of Fresno Fire and Police 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 $192,234,779 for the fiscal year 2025, resulting in an 8.72 percent increase in the fiduciary net position restricted for pension benefits for the fiscal year ended June 30, 2025. Primarily attributable to the growth in the global financial markets in fiscal year 2024, the System’s fiduciary net position increased
$157,533,929 for the fiscal year, resulting in a 7.70
percent increase in the fiduciary net position restricted for pension benefits for the fiscal year ended June 30, 2024; the System’s fiduciary net position increased
$154,759,691 in fiscal year 2023 resulting in an 8.18
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 for the fiscal year ended June 30, 2025 totaled $286,779,605.
For the fiscal year ended June 30, 2025, overall additions had increased by $36,568,480 or 14.62 percent primarily due to the performance of the investment markets; for
fiscal year 2024, overall additions had increased by
$12,113,501 or 5.09 percent primarily due to the
performance of the investment markets; for fiscal year
2023, overall additions had increased by $360,086,148 or 295.18 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 $94,544,826, which
was an increase of $1,867,630 or 2.02 percent over the prior fiscal year 2024. Deductions from the fiduciary net position for the fiscal year ended June 30, 2024, totaled $92,677,196 which was an increase of $9,339,263 or
11.21 percent over the prior fiscal year 2023. The fiscal year ended June 30, 2023 had deductions from the
fiduciary net position totaling $83,337,933, which was an increase of $6,033,530 or 7.80 percent over the prior
fiscal year 2022. The current year increase in benefits paid resulted primarily from the growing retiree
population and the resulting benefits paid during the fiscal year 2025.
The System’s increases in total expenses have closely
paralleled inflation and the growth in the membership and services provided. The System has consistently met its Administrative Expense Budget. There are no material
variances between planned expenses and actual expenses.
City of Fresno Fire and Police 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 $ 31,778,983 $ 30,635,176 $ 1,143,807 3.73% Employee Contributions 13,580,439 13,107,833 472,606 3.61% Net Investment Income (Loss)* 241,420,183 206,468,116 34,952,067 16.93% Total Additions $ 286,779,605 $ 250,211,125 $ 36,568,480 14.62% Deductions:
Retiree Benefit Payments $ 88,825,126 $ 86,681,263 $ 2,143,863 2.47% Post Retirement Supplemental Benefit (PRSB) 2,004,658 2,514,579 (509,921) (20.28%) Refunds of Contributions 940,648 1,023,545 (82,897) (8.10%) Administrative Expenses 2,774,394 2,457,809 316,585 12.88% Total Deductions $ 94,544,826 $ 92,677,196 $ 1,867,630 2.02% Changes in Net Position 192,234,779 157,533,929 34,700,850 22.03% Net Position Restricted for Pension Benefits
Beginning of the Year 2,203,370,816 2,045,836,887 157,533,929 7.70% End of the Year $ 2,395,605,595 $ 2,203,370,816 $ 192,234,779 8.72% * Net of investment expense of $40,722,556 and $43,237,508 for June 30, 2025 and 2024, respectively.
FY 2024 FY 2024
Increase/
(Decrease)
Increase/
(Decrease)
FY 2024 FY 2023 Amount Percent
Additions:
Employer Contributions $ 30,635,176 $ 27,067,935 $ 3,567,241 13.18% Employee Contributions 13,107,833 12,053,687 1,054,146 8.75% Net Investment Income (Loss)* 206,468,116 198,976,002 7,492,114 3.77% Total Additions $ 250,211,125 $ 238,097,624 $ 12,113,501 5.09% Deductions:
Retiree Benefit Payments $ 86,681,263 $ 77,661,978 $ 9,019,285 11.61% Post Retirement Supplemental Benefit (PRSB) 2,514,579 2,652,886 (138,307) (5.21%) Refunds of Contributions 1,023,545 622,026 401,519 64.55% Administrative Expenses 2,457,809 2,401,043 56,766 2.36% Total Deductions $ 92,677,196 $ 83,337,933 $ 9,339,263 11.21% Changes in Net Position 157,533,929 154,759,691 2,774,238 1.79% Net Position Restricted for Pension Benefits
Beginning of the Year 2,045,836,887 1,891,077,196 154,759,691 8.18% End of the Year $ 2,203,370,816 $ 2,045,836,887 $ 157,533,929 7.70% * Net of investment expense of $43,237,508 and $32,378,625 for June 30, 2024 and 2023, respectively.
City of Fresno Fire and Police 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 Fire and Police 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 Fire and Police 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 Fire and Police 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
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Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 18 Basic Financial Statements
Statement of Fiduciary Net Position
As of June 30, 2025 and 2024
2025 2024
ASSETS
Cash (Note 8) $ 795,879 $ 745,730
Collateral Held for Securities Lent (Note 10) 26,403,774 30,048,536 Receivables
Receivables for Investments Sold 9,482,083 5,404,168
Interest and Dividends 2,262,501 2,269,391
Other Receivables 1,189,550 866,235
Total Receivables $ 12,934,134 $ 8,539,794
Prepaid Expenses — —
Total Current Assets $ 40,133,787 $ 39,334,060
Investments at Fair Value and NAV (Note 7 and Note 8)
Domestic Equities 592,740,818 536,005,210
International Equities 466,637,369 431,079,331
Private Equity 187,621,022 159,953,529
Fixed Income 298,349,862 272,386,444
Private Debt/Credit 287,302,054 295,521,248
Real Assets 501,672,606 464,049,233
Multi-Assets 48,769,549 35,351,984
Short-Term Investments 10,724,149 8,156,362
Total Investments $ 2,393,817,429 $ 2,202,503,341
Capital Assets Net of Accumulated Depreciation (Note 13) 76,145 211,960 Other Assets 51,107 105,115
Total Assets $ 2,434,078,468 $ 2,242,154,476
LIABILITIES
Collateral Held for Securities Lent (Note 10) 26,403,774 30,048,536 Payable for Investments Purchased 9,599,417 6,856,051 Other Liabilities 1,272,750 1,014,224
Payable for Foreign Currency Purchased 1,196,932 864,849 Total Liabilities $ 38,472,873 $ 38,783,660
Net Position Restricted for Pension Benefits (Note 6) $ 2,395,605,595 $ 2,203,370,816 The accompanying notes to the basic financial statements on pages 21 - 59 are an integral part of this statement.
City of Fresno Fire and Police Retirement System l FINANCIAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 19 Statement of Changes in Fiduciary Net Position
For Fiscal Years Ended June 30, 2025 and 2024
2025 2024
ADDITIONS
Contributions (Note 3)
Employer $ 31,778,983 $ 30,635,176
Employee 13,580,439 13,107,833
Total Contributions $ 45,359,422 $ 43,743,009
Investment Income (Loss)
Net Appreciation/(Depreciation) in Fair Value of Investments 261,612,993 229,711,380 Interest 11,173,861 10,374,725
Dividends 7,360,021 7,616,102
Other Investment Related Income 83,226 154,063
Total Investment Income (Loss) 280,230,101 247,856,270 Less: Investment Expense (38,935,126) (41,587,246)
Total Net Investment Income (Loss) $ 241,294,975 $ 206,269,024 Securities Lending Income
Securities Lending Earnings (Note 10) 1,912,638 1,849,354 Less: Securities Lending Expense (1,787,430) (1,650,262) Total Net Securities Lending Income $ 125,208 $ 199,092 Total Additions $ 286,779,605 $ 250,211,125
DEDUCTIONS
Benefit Payments 88,825,126 86,681,263
Post Retirement Supplemental Benefits (Note 12) 2,004,658 2,514,579 Refunds of Contributions 940,648 1,023,545
Administrative Expense 2,774,394 2,457,809
Total Deductions $ 94,544,826 $ 92,677,196
Changes in Net Position $ 192,234,779 $ 157,533,929
NET POSITION RESTRICTED FOR PENSION BENEFITS
BEGINNING OF YEAR $ 2,203,370,816 $ 2,045,836,887
END OF THE YEAR $ 2,395,605,595 $ 2,203,370,816
The accompanying notes to the basic financial statements on pages 21 - 59 are an integral part of this statement.
City of Fresno Fire and Police Retirement System l FINANCIAL Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 20 Notes to the Basic Financial Statements
1 Significant Provisions of the
Retirement System
The City of Fresno Fire and Police Retirement System
(the System) was established on July 1, 1955, under
provisions of the City of Fresno Ordinance Number 4611, and Charter Section 910, and is maintained and governed by Articles 3 and 4 of Chapter 3 of the Municipal Code of the City of Fresno (the City) but not under the control of the City Council. The System is a single-employer,
contributory, defined benefit pension plan. The System is a public employee retirement system that provides
lifetime retirement, disability, and death benefits to the safety members employed by the City of Fresno, which
includes all full time sworn fire, police and airport safety personnel.
The System is administered by the Fire and Police
Retirement Board (Board) which operates under the
authority vested in Articles 3 and 4 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 Fire and Police 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 Fire and Police 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 sworn
Fire Department members of the System, and one (1)
employee who is elected by the Police and Airport Safety Officers 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 Employees 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 Fire and Police Retirement System l FINANCIAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 21 Membership and Benefit Eligibility
The Fire and Police Retirement System is one System
with two tiers. Effective August 27, 1990, the City of Fresno (the City) added the Fire and Police Second Tier for all full time sworn fire, police and airport safety personnel hired on or after that date (and closed the Fire and Police First Tier to new entrants). Both tiers are governed by the City of Fresno Municipal Code. The
provisions of Tier 1 are set forth in Article 3 of Chapter 3, while the Tier 2 provisions are stated in Article 4.
All permanent sworn Fire, Police and Airport Safety
personnel of the City of Fresno are eligible to participate in the plan. Temporary Public Safety employees are not
eligible to participate in the plan. Employees become
eligible for membership on their first day of full-time regular employment, and members become fully vested
after earning 5 (Tier 2) or 10 (Tier 1) years of service credit.
Total participants of the System were comprised
of the following at June 30, 2025 and 2024:
2025 2024
Active Members
Vested 834 843
Non-Vested 385 383
Total Active Members 1,219 1,226
Retirees and Beneficiaries of Deceased
Retirees, Currently Receiving Benefits 1,246 1,220
Inactive Vested Members 65 71
Total Retirees, Beneficiaries,
and Inactive Members 1,311 1,291
Grand Total 2,530 2,517
Benefit Provisions
The System provides lifetime retirement, disability, and death benefits to all eligible permanent sworn Fire, Police and Airport personnel 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, tier and the option selected by the participant. Death and
disability benefits are additionally based upon whether the disability was service-connected and whether the death
occurred before or after retirement.
Members' contributions, including interest, are 100
percent vested at all times. Employer contributions do not become vested until completion of 10 years of credited
service under the First Tier and five years of credited service under the Second Tier when they become 100
percent vested, but are not payable until the member
attains the age of 50 under both tiers. Contributions are made by the members and the employer at rates
recommended by the System’s actuary and adopted by the
Retirement Board.
Member Retirement Benefits
Members of Tier 1, hired prior to August 27, 1990, are
eligible to retire once they attain the age of 65 regardless of service or at age 50 and have acquired 10 or more years of retirement service credit. The Tier 1 benefit is
calculated pursuant to the provisions of Section 3-333 of the City of Fresno Municipal Code. The monthly
allowance for a member with at least 20 years of service who retires from active status is equal to 55 percent of final compensation plus 2 percent of final compensation for each year of service in excess of 20 years completed after age 50. For Tier 1, final average compensation
consists of the final highest consecutive 36 months of
compensation earnable, calculated using the rate of pay actually earned by the member in effect at the time of
retirement. Some members can elect to have their final
compensation based on a rank average.
City of Fresno Fire and Police 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 Members of Tier 2, hired on or after August 27, 1990, are eligible to retire once they attain the age of 65 regardless of service or at age 50 and have acquired 5 or more years of retirement service credit. The Tier 2 benefit is
calculated pursuant to the provisions of Section 3-411 of the City of Fresno Municipal Code. The monthly
allowance for a member who is age 55 or older is equal to
2.70 percent of final compensation times years of accrued retirement service credit. The maximum monthly
retirement allowance is 75 percent of final compensation.
For Tier 2, final average compensation consists of the
highest consecutive 36 months of compensation earnable
during any 36 months of service before the date 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 66 2/3 percent continuance to an
eligible surviving spouse or domestic partner. An eligible 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.
The City of Fresno contributes to the retirement plan
based upon actuarially determined contribution rates
adopted by the Board. Employer contribution rates are
adopted annually based upon recommendations received
from the Retirement System’s actuary after the
completion of the annual actuarial valuation. The adopted average employer contribution rate as of June 30, 2025
for 2024-2025 (based on the June 30, 2023 valuation) was
23.09 percent of compensation.
All members are required to make contributions to the
Retirement System. The average member contribution
rate as of June 30, 2025 for 2024-2025 (based on the June 30, 2023 valuation) was 8.98 percent of compensation.
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.
City of Fresno Fire and Police 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 Eligibility: Any member who is eligible for a service
retirement and is age 50 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 his or her DROP account
from the options provided.
DROP Reserves, which represent funds reserved for
DROP benefits accumulated by active members and
retirees, were $160,657,764 and $157,476,331 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 final average salary, years of credited service and whether the member is over or under age 50 and whether
the permanent incapacity is found to be service-connected (caused by the job) or ordinary (injury or illness not
caused by their job) disability. There is no minimum
service requirement before benefits are payable for
service-connected disability. However, in order to receive ordinary disability benefits, the member must have
completed at least 10 years of service.
Cost-of-Living Benefits
Cost-of-living adjustment (COLA) increases for the Tier 1 retirees are determined by the increases attached to ranks of active safety employees for those having retired under the rank-average option. For those retired under the 3- year average, COLA increases are based on the
percentage of change in the weighted mean average
monthly compensation attached to all ranks of members,
as compared with the prior fiscal year and limited to a maximum of 5 percent per year.
City of Fresno Fire and Police 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 Tier 1 cost-of-living adjustments (COLA) depend on the
type of method chosen by the employee at retirement. If the employee chose the Career Rank method, the COLA
is a recalculation of his/her retirement based on the new salaries adopted for the current year. If the method chosen by the retiree is the final 3-year method, the COLA is
based on the change in the weighted mean average
compensation attached to all ranks in the department with a cap of five percent (5%) per year. Any excess over the 5% is banked for use in years when the COLA calculation is less than 5%.
Cost-of-Living Adjustment (COLA) increases for the Tier 2 retirees will be determined by the change in the
Consumer Price Index (CPI) with a maximum of 3
percent per year. Provisions for the COLA increases are outlined in the City of Fresno Municipal Code and
changes may be made only by code amendment.
Tier 2 COLAs are based on the change in the CPI (for all Urban Wage Earners and all Clerical Workers – U.S. City Average) as provided in the City of Fresno Municipal
Code. Retirement staff research the percentage change in CPI and propose that percent to the Fire and Police
Retirement Board as the COLA to be adopted for the
following fiscal year. This procedure must be completed by the end of April each year for implementation in
January of the following calendar year. The COLA is
limited to a three percent (3%) maximum change per year and any excess over 3 percent is banked for the retiree for use in a year where the percent of CPI change is less than 3 percent.
The Board adopted the annual COLA adjustments,
pursuant to Section 3-411, of 3.00 percent, January 1,
2025; 3.0 percent, January 1, 2024; and 3.0 percent,
effective January 1, 2023.
2 Summary of Significant
Accounting Policies
Reporting Entity
The City of Fresno Fire and Police Retirement System
(the System) was established on July 1, 1955, under
provisions of the City of Fresno Ordinance Number 4611, and Charter Section 910, and is maintained and governed by Articles 3 and 4 of Chapter 3 of the Municipal Code of the City of Fresno (the City) but not under the control of the City Council. The System is a single-employer,
contributory, defined benefit pension plan. The sole
employer and primary government of the plan is the City of Fresno. All safety members employed by the City of
Fresno, which includes all full time sworn fire, police and airport safety 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
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, City of Fresno Fire and Police 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 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 and per Sections 3-322 and 3-324 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 Statement No. 28, cash received as collateral on securities lending
transactions and investments made with that cash are
reported as assets and liabilities resulting from these transactions and are both 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 City of Fresno 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 national or international
exchanges 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 Employees 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 Fire and Police 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 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 below.
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 Fire and Police 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 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 3-319, 3-324, and 3-405.
Contributions are made by the members and the employer
at rates recommended by the System’s independent
actuary and adopted by the Board. All active members
are required to make contributions to the System.
Employee contribution rates historically varied in Tier 1 according to entry age and were designed to provide
funding for approximately one-third of the retirement
benefits. As of June 30, 2025, there were no Tier 1
employee contributions made in fiscal year 2025, as there are no longer any active Tier 1 members. There will be no further Tier 1 employee contributions. The Tier 1
average member contribution rate as of June 30, 2024 for 2023-2024 (based on the June 30, 2022 valuation) was
6.22% of compensation.
Employee contribution rates in Tier 2 are established at nine percent (9%) of pensionable base pay.
The City’s contribution rates are designed to provide
funding for the remaining regular retirement and cost-of- living benefits, as well as all disability and survivors’ benefits. The aggregate actuarially determined employer contribution rate adopted by the Board as of June 30,
2025 for 2024-2025 (based on the June 30, 2023
valuation) was 23.09% of compensation. The aggregate
employer contribution rate as of June 30, 2024 for
2023-2024 (based on the June 30, 2022 valuation) was
21.08% 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
Comprehensive Actuarial Funding Policy and Actuarial
Cost Methodology for Funding Purposes
The Board adopted a Comprehensive Actuarial Funding
Policy on November 7, 2012. For the Fire & Police
Retirement System, that policy included a change in
actuarial cost methodology from the aggregate Entry Age Normal funding method used for funding purposes to the
individual Entry Age Normal (EAN) method as this
individual 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 revises 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 Fire and Police 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 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., when 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 the City of Fresno
Municipal Code Sections relating to the amortization
period used in the calculation of the Post Retirement
Supplement 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. For the fiscal year ended June 30, 2025, the actuarial value of assets was $2.151 billion with a funded percentage of
116.2 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 93.
City of Fresno Fire and Police 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 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. 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 to the System for fiscal year 2025
totaled $45,359,422. Employees (members in both tiers) contributed $13,580,439 and the City made (basic and
cost-of-living adjustments (COLA)) contributions of
$31,778,983. For fiscal year 2024, total contributions to the system totaled $43,743,009. Employees (members in
both tiers) contributed $13,107,833 and the City made
(basic and cost-of-living adjustments (COLA))
contributions of $30,635,176.
First Tier
For fiscal year 2025, the Tier 1 employer contribution
normal cost rate was set at 29.92 percent; this was further increased by 0.46 percent, reflecting the difference
between actual and projected contributions for the fiscal year ended June 30, 2022, and decreased by 2.73 percent resulting from the application of the surplus offset, the resulting net required employer contribution rate was
23.09 percent. There were no Tier 1 contributions made in fiscal year 2025, as there are no longer any active Tier 1 members. There will be no further Tier 1 contributions.
Contributions aggregating $-41,040 ($-54,098 net
employer and $13,058 employee) 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. For fiscal year 2024, the employer contribution rate was set at 30.25 percent; however, only a cash contribution of $-54,098 was required from the City due to the difference between actual and the estimated
June 30, 2022 surplus allocated to the City in the June 30, 2021 valuation for offsetting the City’s contributions for the 2022/2023 plan year. Based on the June 30, 2022
actuarial valuation, employer and employee contributions represented 21.08 percent and 0.00 percent, respectively, of the fiscal year 2024 covered payroll.
City of Fresno Fire and Police 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 Second Tier
Contributions aggregating $45,359,422 ($31,778,983 net
employer and $13,580,439 employee) were made in fiscal
year 2025, based on an actuarial valuation determined as of June 30, 2023, which became effective for the year
ended June 30, 2025. For fiscal year 2025, the Tier 2
employer contribution normal cost rate was set at 25.34 percent; this was further offset by an increase of 0.46 percent, reflecting the difference between actual and
projected contributions for the fiscal year ended June 30, 2022, and a reduction of 2.73 percent resulting from the application of the surplus offset, the resulting net required employer contribution rate was 23.09 percent. The
required employee contributions were set at 9.00 percent of the fiscal year 2025 covered payroll. For the fiscal year ended June 30, 2025, the Board adopted an employer
contribution rate of 23.09%. (The employee contribution for Tier 2 members is set at the fixed rate of 9.00% as required by the municipal code.) The City elected to
implement a contribution rate of 21.08%, lower than the actuarially determined contribution rate adopted by the Board.
Contributions aggregating $43,784,049 ($30,689,274 net
employer and $13,094,775 employee) 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. For fiscal year 2024, the employer contribution rate was set at 25.47 percent; however, only a cash contribution of $30,689,274 was required from the
City due to the difference between actual and the
estimated June 30, 2022 surplus allocated to the City in the June 30, 2021 valuation for offsetting the City’s
contributions for the 2022/2023 plan year. Employer and employee contributions represented 21.08 percent and
9.00 percent, respectively, of the fiscal year 2024 covered payroll.
Contributions Required and Contributions
Made
The approved normal contributions to the Fire and Police Retirement System for 2025 were estimated in accordance with actuarially determined requirements computed
through an actuarial valuation performed as of June 30, 2023, and are shown on the following page:
City of Fresno Fire and Police 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 Actuarial Normal Cost Rates as a Percentage of Pensionable Payroll Effective Effective
FY 25 FY 24
Employer Normal Cost Rate (First Tier) 29.92% 30.25%
Employer Normal Cost Rate (Second Tier) 25.34% 25.47%
Employee and Employer Contributions
FY 2025
Tier 2 Total
Employee Contributions $ 13,580,439 $ 13,580,439
Employee Contribution Rate 9.00%
Employer Contributions $ 31,778,983 $ 31,778,983
Net Employer Contribution Rate Implemented 21.08%
Pensionable Payroll $ 151,195,533 $ 151,195,533
FY 2024
Tier 1 Tier 2 Total
Employee Contributions $ 13,058 $ 13,094,775 $ 13,107,833 Employee Contribution Rate 9.00% 9.00%
Employer Contributions $ -54,098 $ 30,689,274 $ 30,635,176 Net Employer Contribution Rate 21.08% 21.08%
Pensionable Payroll $ 210,041 $ 145,458,703 $ 145,668,744 City of Fresno Fire and Police 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 4 Risk Disclosure Related to
Contribution Constraint
The City of Fresno Fire and Police 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 ended June 30, 2025, the Board
adopted an employer contribution rate of 23.09%. (The
employee contribution for Tier 2 members is set at the
fixed rate of 9.00% as required by the municipal code.) The City elected to implement a contribution rate of
21.08%, lower than the actuarially determined
contribution rate 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.
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 $2,100,454 $1,996,002
Plan Fiduciary Net Position ($2,395,606) ($2,203,371)
Net Pension Liability/(Surplus) ($295,152) ($207,369)
Plan Fiduciary Net Position as a percentage of the total pension liability 114.05% 110.39% 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 Fire and Police 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 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: 4.25% to 14.00%, 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 Safety Healthy Retiree Amount-Weighted Above-Median Mortality Table (separate tables for males and females), 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 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 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 Fire and Police 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 1 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. 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 4.25% to 14.00%
(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 table on the following page.
The actual asset class target allocations from the Board’s current 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 for the June
30, 2025 and June 30, 2024 Actuarial Valuations.
City of Fresno Fire and Police 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 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, the Pub-2016 Safety Healthy Retiree Amount-
Weighted Above-Median Mortality Table (separate tables
for males and females) is used, projected generationally with the two-dimensional mortality improvement scale
MP-2021. For 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 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.
City of Fresno Fire and Police 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 Discount Rate
The discount rate used to measure the total pension
liability was 6.75 percent as of June 30, 2025 and 2024.
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 ($2,697) ($295,152) ($530,331)
1% Current 1%
Decrease Discount Rate Increase
Net Pension Liability/(Surplus) 5.75% 6.75% 7.75%
June 30, 2024 $69,861 ($207,369) ($430,418)
City of Fresno Fire and Police 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 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.
EMPLOYER ADVANCE/RETIRED RESERVES
represent the total accumulated employer contributions
for future retirement payments to current active members 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 participants in accordance with the City of Fresno Municipal Code Section 3-354 Post-Retirement
Supplemental Benefit.
City of Fresno Fire and Police 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 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 the City of Fresno Municipal Code
Section 3-354 Post-Retirement Supplemental Benefit. In
addition, these reserves also include the negative balance that reflects shortfalls in employer contributions. These shortfalls arise when the City adopts contribution rates below the board-approved, actuarially determined 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 the years ended 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 $ 2,006,204 $ 1,812,431 Active Member (Employee) Reserves 230,286 231,916
DROP Reserves 160,658 157,476
PRSB Reserves 1,616 2,159
City Surplus (Deficit) Reserves (3,158) (611)
Net Position Restricted for Pension Benefits $ 2,395,606 $ 2,203,371 City of Fresno Fire and Police 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 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 Fire and Police 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 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 $ 38,105,314 $ — $ 37,553,736 $ 551,578 Commercial Mortgage-Backed 11,112,363 — 11,112,363 — Corporate Bonds 80,324,003 — 79,948,492 375,511
Government Agencies 4,646,101 — 4,646,101 —
Government Bonds 23,415,120 — 23,415,120 —
Government Mortgage-Backed Securities 100,376,171 — 100,376,171 — Gov't-Issued Commercial Mortgage-Backed 352,047 — 352,047 — Index Linked Government Bonds 921,730 — 921,730 —
Municipal/Provincial Bonds 2,333,456 — 2,333,456 —
Non-Government Backed CMOs 2,571,875 — 2,571,875 —
Total Debt Securities 264,158,180 — 263,231,091 927,089 Equity Securities
Consumer Discretionary 36,964,173 36,964,173 — —
Consumer Staples 11,938,401 11,938,401 — —
Energy 7,493,944 7,320,360 — 173,584
Financials 54,412,935 54,232,307 — 180,628
Health Care 22,541,189 22,541,189 — —
Industrials 41,177,119 41,177,119 — —
Information Technology 41,176,072 41,176,072 — —
Materials 13,950,548 13,517,001 — 433,547
Miscellaneous — — — —
Real Estate — — — —
Telecommunication Services 24,832,623 24,832,623 — — Utilities 1,308,814 1,308,814 — —
Total Equity Securities 255,795,818 255,008,059 — 787,759 Securities Lending 26,403,774 26,403,774 — —
Short-Term Investments 10,724,149 10,724,149 — —
Private Real Estate Holdings 3,662,500 — 3,662,500 —
Total Investments by Fair Value Level $ 560,744,421
Investments Measured at the Net Asset Value (NAV)
Commingled Fund - Equities $ 804,595,545
Commingled Fund - Real Estate 175,418,855
Commingled Fund - Infrastructure 134,551,310
Private Real Estate Funds 188,039,941
Private Debt/Private Credit 336,071,604
Private Equity 187,621,022
Total Investments Measured at NAV 1,826,298,277
Total Investments Measured at Fair Value and NAV $ 2,387,042,698 Investment Derivative Instruments*
Debt Securities - Futures $ 33,178,502 $ 33,178,502 $ — $ — Rights/Warrants 3 3 — —
Total Investment Derivative Instruments $ 33,178,505 $ 33,178,505 $ — $ — * Short-term derivative instruments included on page 54 are excluded here.
City of Fresno Fire and Police 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 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 $ 29,513,992 $ — $ 29,513,992 $ — Commercial Mortgage-Backed 16,240,150 — 16,240,150 — Corporate Bonds 80,826,688 — 80,826,688 —
Corporate Convertible Bonds — — — —
Government Agencies 3,969,796 — 3,969,796 —
Government Bonds 20,656,034 — 20,656,034 —
Government Mortgage-Backed Securities 88,602,048 — 88,602,048 — Gov't-Issued Commercial Mortgage-Backed 343,313 — 343,313 — Index Linked Government Bonds 674,428 — 674,428 —
Municipal/Provincial Bonds 1,911,486 — 1,911,486 —
Non-Government Backed CMOs 1,568,874 — 1,568,874 —
Total Debt Securities 244,306,809 — 244,306,809 —
Equity Securities
Consumer Discretionary 32,817,717 32,817,717 — —
Consumer Staples 14,751,297 14,751,297 — —
Energy 9,197,466 9,197,466 — —
Financials 51,902,209 51,902,209 — —
Health Care 17,852,740 17,852,740 — —
Industrials 44,495,769 44,495,769 — —
Information Technology 52,294,418 52,294,418 — —
Materials 13,376,387 13,376,379 — 8
Real Estate 235,934 235,934 — —
Telecommunication Services 20,415,094 20,415,094 — — Utilities 848,824 848,824 — —
Total Equity Securities 258,187,855 258,187,847 — 8
Securities Lending 30,048,536 30,048,536 — —
Short-Term Investments 8,156,362 8,156,362 — —
Private Real Estate Holdings 3,500,000 — 3,500,000 —
Total Investments by Fair Value Level $ 544,199,562
Investments Measured at the Net Asset Value (NAV)
Commingled Fund - Equities $ 709,903,872
Commingled Fund - Real Estate 185,661,457
Commingled Fund - Infrastructure 126,869,414
Private Real Estate Funds 148,018,363
Private Debt/Private Credit 330,873,231
Private Equity 159,953,529
Total Investments Measured at NAV 1,661,279,866
Total Investments Measured at Fair Value and NAV $ 2,205,479,428 Investment Derivative Instruments*
Debt Securities - Futures $ 27,071,469 $ 27,071,469 $ — $ — Rights/Warrants 980 980 — —
Total Investment Derivative Instruments $ 27,072,449 $ 27,072,449 $ — $ — * Short-term derivative instruments included on page 54 are excluded here.
City of Fresno Fire and Police 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 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 Fire and Police 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 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 Fire and Police 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 $ 804,595,545 $ — Daily None Commingled Fund - Real Estate 175,418,855 — Quarterly 45-90 Days Commingled Fund - Infrastructure 134,551,310 — Not Eligible N/A Private Real Estate Funds 188,039,941 109,734,154 Not Eligible N/A Private Debt/Private Credit 336,071,604 128,846,848 Not Eligible N/A Private Equity 187,621,022 190,501,686 Not Eligible N/A Total investments measured at the NAV $ 1,826,298,277 $ 429,082,688 City Of Fresno Fire and Police 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 $ 709,903,872 $ — Daily None Commingled Fund - Real Estate 185,661,457 — Quarterly 45-90 Days Commingled Fund - Infrastructure 126,869,414 — Not Eligible N/A Private Real Estate Funds 148,018,363 77,927,940 Not Eligible N/A Private Debt/Private Credit 330,873,231 142,001,874 Not Eligible N/A Private Equity 159,953,529 125,936,560 Not Eligible N/A Total investments measured at the NAV $ 1,661,279,866 $ 345,866,374 On the following page is an explanation of the investment types listed above.
City of Fresno Fire and Police 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 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 Fire and Police 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 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 Equities $ 592,741 $ 536,005
International Equities 466,637 431,079
Private Equity 187,621 159,954
Fixed Income 298,350 272,387
Private Debt/Credit 287,302 295,521
Real Assets 501,673 464,049
Multi-Assets 48,769 35,352
Short-Term Investments 10,724 8,156
Total Investments at Fair Value $ 2,393,817 $ 2,202,503 City of Fresno Fire and Police 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 The Board, through its Investment Policy Statement, provides guidelines for investments and established the following target allocations with a minimum and maximum range for each of these 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 Retirement 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.
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.
City of Fresno Fire and Police 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 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 $222,367 and $314,526 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 $ 38,105,314 AAA 0.89 $ 29,513,992 AA+ 0.78 Commercial Mortgage-Backed 11,112,363 AAA 4.09 16,240,150 AAA 4.40 Corporate Bonds 80,324,003 BBB+ 4.42 80,826,688 BBB+ 5.04 Fixed Income Derivatives - Futures 33,178,502 — 7.83 27,071,469 — 7.28 Non-Government Backed CMOs 2,571,875 AAA 2.45 1,568,874 AA 2.04 Preferred Stock 1,013,180 BB+ — 1,008,166 BB+ —
Government Agencies 4,646,101 BBB+ 6.25 3,969,796 BB- 6.32 Government Bonds 23,415,120 AAA 12.05 20,656,034 AAA 12.75 Gov't Issued Commercial Mortgage-Backed Securities 352,047 AAA 2.74 343,313 AAA 3.96 Government Mortgage-Backed Securities 100,376,171 AAA 6.68 88,602,048 AAA 7.25 Municipal/Provincial Bonds 2,333,456 A+ 7.14 1,911,486 A+ 8.10 Index Linked Government Bonds 921,730 AAA 13.92 674,428 AAA 14.62 Total Credit Risk Fixed Income $ 298,349,862 $ 272,386,444 City of Fresno Fire and Police 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 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 Fire and Police 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 Foreign Currency Risk Exposure
As of June 30, 2025
Base Currency Country
Equities /
Fixed Income
Futures -
Domestic
Fixed
Income
Options &
Swaps
Cash & Cash
Equivalents Total
AUD Australian Dollar Australia $ 1,215,986 $ — $ — $ — $ 1,215,986 BRL Brazilian Real Brazil 1,878,819 — — (93,322) 1,785,497 CAD Canadian Dollar Canada 15,660,715 — — — 15,660,715 CHF Swiss Franc Switzerland 6,210,440 — — — 6,210,440 CNY Chinese Yuan Renminbi China 3,094,670 — — 3 3,094,673 DKK Danish Krone Denmark 8,734,881 — — — 8,734,881 EUR Euro Europe 73,222,127 — — (130,536) 73,091,591 GBP British Pound Sterling United Kingdom 34,237,038 — — — 34,237,038 HKD Hong Kong Dollar Hong Kong 17,343,417 — — 20,170 17,363,587 IDR Indonesian Rupiah Indonesia 1,143,624 — — — 1,143,624 INR Indian Rupee India 7,590,364 — — 60 7,590,424
JPY Japanese Yen Japan 31,926,594 — — — 31,926,594 KRW South Korean Won South Korea 4,809,194 — — — 4,809,194 MXN Mexican Peso Mexico 1,495,588 — — — 1,495,588
RUB Russian Ruble Russia 787,750 — — 119,029 906,779 SEK Swedish Krona Sweden 4,574,009 — — — 4,574,009 SGD Singapore Dollar Singapore 1,085,356 — — — 1,085,356 TRY Turkish Lira Turkey 2 — — — 2
TWD New Taiwan Dollar Taiwan 10,410,781 — — (120,825) 10,289,956 USD United States Dollar United States 1,159,785,552 — 4,536 39,702,666 1,199,492,754 ZAR South African Rand South Africa 2,248,835 — — — 2,248,835 Total Equities (In USD) $ 1,387,455,742 $ — $ 4,536 $ 39,497,245 $ 1,426,957,523 Total Non-USD Equities (In USD) $ 227,670,190 $ — $ — $ (205,421) $ 227,464,769 City of Fresno Fire and Police 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 Foreign Currency Risk Exposure
As of June 30, 2024
Base Currency Country
Equities /
Fixed Income
Futures -
Domestic
Fixed
Income
Options &
Swaps
Cash & Cash
Equivalents Total
AUD Australian Dollar Australia $ 1,535,344 $ — $ — $ — $ 1,535,344 BRL Brazilian Real Brazil 1,448,835 — 978 3,000 1,452,813 CAD Canadian Dollar Canada 16,040,921 — — — 16,040,921 CHF Swiss Franc Switzerland 5,708,247 — — — 5,708,247 CNY Chinese Yuan Renminbi China 1,709,053 — — — 1,709,053 DKK Danish Krone Denmark 8,690,673 — — — 8,690,673 EUR Euro Europe 64,189,514 — — (103,180) 64,086,334 GBP British Pound Sterling United Kingdom 35,222,503 — — — 35,222,503 HKD Hong Kong Dollar Hong Kong 14,770,235 — — — 14,770,235 IDR Indonesian Rupiah Indonesia 1,721,102 — — — 1,721,102 ILS New Israeli Shekel Israel 517,731 — — — 517,731 INR Indian Rupee India 7,199,478 — — 1,025 7,200,503 JPY Japanese Yen Japan 36,999,213 — — — 36,999,213 KRW South Korean Won South Korea 9,203,999 — — — 9,203,999 MXN Mexican Peso Mexico 1,678,269 — — 27,678 1,705,947 MYR Malaysian Ringgit Malaysia 138,335 — — — 138,335 NOK Norwegian Krone Norway 287,845 — — — 287,845
RUB Russian Ruble Russia 873,095 — — 71,071 944,166 SEK Swedish Krona Sweden 10,388,497 — — — 10,388,497 SGD Singapore Dollar Singapore 927,418 — — — 927,418 TRY Turkish Lira Turkey 3 — — — 3
TWD New Taiwan Dollar Taiwan 13,929,070 — — — 13,929,070 USD United States Dollar United States 1,038,025,609 — (127,267) 30,314,097 1,068,212,439 ZAR South African Rand South Africa 1,241,886 — — — 1,241,886 Total Equities (In USD) $ 1,272,446,875 $ — $ (126,289) $ 30,313,691 $ 1,302,634,277 Total Non-USD Equities (In USD) $ 234,421,266 $ — $ 978 $ (406) $ 234,421,838 City of Fresno Fire and Police 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 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 (ADRs) and Global Depository Receipts (GDRs)
including ADRs and GDRs 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 Fire and Police 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 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 Fire and Police 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 As of June 30, 2025 and 2024, the System held a total fair value of $36,775,307 and $30,061,243, 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 $(785,372) $777,753 $340,762 $ 436,991 Future Contracts - Domestic Fixed Income (33,178,502) 33,178,502 27,071,469 6,107,033 Future Contracts - International Equity Index — 2,812,022 2,774,156 37,866 Rights & Warrants — 2,496 2,126 370
Swaps — 4,534 (127,270) 131,804
Total $36,775,307 $30,061,243
Derivative Type: FY 2024 FY 2023 FY 2024 - FY 2023
Notional Change in Fair
Amount Fair Value Fair Value Value
Foreign Currency Forward $(339,260) $340,762 $816,502 $ (475,740) Future Contracts - Domestic Fixed Income (27,071,469) 27,071,469 10,990,566 16,080,903 Future Contracts - International Equity Index — 2,774,156 2,630,972 143,184 Rights & Warrants — 2,126 1,367 759
Swaps — (127,270) (140,811) 13,541
Total $30,061,243 $14,298,596
City of Fresno Fire and Police 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 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 $29.5 million. The fair value of associated
collateral was $30.3 million ($26.4 million of cash
collateral and $3.9 million 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 $32.8 million. The fair value of associated collateral was $33.9 million ($30 million of cash collateral and $3.9
million 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 was approximately
151 days and 81 days, respectively, as of June 30, 2025 and 2024.
City of Fresno Fire and Police 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 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 $1,912,638 $1,849,354
Expenses:
Bank Fees 1,787,430 1,650,262
Total Expenses 1,787,430 1,650,262
Net Income from Securities Lending $125,208 $199,092
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 $ 9,498,320 $ 375,926 $ 9,874,246 $ 9,458,631 $ 977,149 $ 10,435,780 Domestic Equities 3,227,649 — 3,227,649 4,161,813 15,197 4,177,010 Domestic Fixed 8,409,270 1,810,577 10,219,847 11,799,835 970,333 12,770,168 International Equities 4,671,871 1,517,735 6,189,606 3,710,036 1,705,767 5,415,803 Total Value $ 25,807,110 $ 3,704,238 $ 29,511,348 $ 29,130,315 $ 3,668,446 $ 32,798,761 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 $ 9,646,267 $ 385,581 $ 10,031,848 $ 9,728,209 $ 1,007,695 $ 10,735,904 Domestic Equities 3,273,809 — 3,273,809 4,261,145 15,516 4,276,661 Domestic Fixed 8,556,550 1,850,383 10,406,933 12,127,858 990,543 13,118,401 International Equities 4,927,148 1,618,686 6,545,834 3,931,323 1,807,504 5,738,827 Total Value $ 26,403,774 $ 3,854,650 $ 30,258,424 $ 30,048,535 $ 3,821,258 $ 33,869,793 City of Fresno Fire and Police Retirement System l FINANCIAL Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 56 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 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 3-354.
If an actuarial surplus is declared, 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 3-354(f)(4). Any unused portion shall be reserved in the PRSB Reserve and drawn upon in subsequent years if needed.
For the fiscal year ended June 30, 2025, the System
distributed PRSB benefits in the total amount of
$2,160,523 to eligible recipients (including $2,004,658 to retirees and $155,865 to DROP participants). As of June 30, 2025, the City Surplus Reserve balance was
$-3,158,704 and the PRSB Reserve balance was
$1,616,365. As of June, 30, 2024, the City Surplus
Reserve balance was $-611,272 and the PRSB Reserve
balance was $2,158,561.
For the fiscal years ended June 30, 2025 and 2024, there was a surplus (or prefunded actuarial accrued liability) as the System has a valuation value of assets which is in
excess of the actuarial accrued liability. The System’s funded ratio was 116.2 percent and 114.9 percent,
respectively, which was above the required 110 percent
for declaration of a surplus, thus a 6.2 percent and 4.9 percent actuarial surplus was available to reduce the
City’s contributions and to fund new PRSB benefits for
the years ended June 30, 2025 and 2024, respectively.
The June 30, 2025 PRSB portion of the surplus is
$2,127,353, of which 80 percent will be allocated in the 2026 calendar year to retirees at $136.35 per month
commencing January 1, 2026. For June 30, 2024 the
PRSB portion of the surplus was $1,568,567, of which 80 percent was allocated in the 2025 calendar year to retirees at $135.4 per month commencing January 1, 2025.
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 Fire and Police Retirement System l FINANCIAL Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 57 The System’s major two-year project to program and
install an upgrade to our 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 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. For the fiscal year ended June 30, 2024, the Systems equally shared 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 Fire and Police Retirement System l FINANCIAL Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 58 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 $ 4,036,131 $ 8,687,542 Arcmont $ 22,428,935 $ 26,851,225 Artemis 10,201,644 13,419,834 Cloverlay 11,901,376 11,482,483 Blue Vista 16,926,291 — Crescent Capital 23,439,243 23,442,782 Brookfield 5,672,876 5,458,287 Monroe Capital 21,605,429 21,608,691 The Carlyle Group 8,809,876 13,711,655 PIMCO COF 27,958,235 27,962,457 Grain Communications 11,813,060 9,987,569 Sixth Street 21,513,630 30,654,236 Kayne Anderson 3,092,066 9,264,358 Total $ 128,846,848 $ 142,001,874 Oaktree Capital Mgt. 2,393,694 2,394,055
PCCP, LLC 45,009,671 12,642,024
PIMCO BRAVO III — 2,362,616 Private Equity
PIMCO EDCO 1,778,845 — Asia Alternatives $ 81,884,362 $ 8,007,607 Tristan Capital Partners — — Ocean Avenue 6,256,446 — Total $ 109,734,154 $ 77,927,940 Pantheon 95,341,570 110,250,426 Volta Energy
Technologies 7,019,308 7,678,527
Total $ 190,501,686 $ 125,936,560
FY 2025 FY 2024
Total Unfunded Commitments $ 429,082,688 $ 345,866,374
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 Fire and Police Retirement System l FINANCIAL Notes to the Basic Financial Statements Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 59 Required Supplementary Information
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 $51,410 $45,611 $41,190 $38,322 $37,563
Interest 135,103 125,971 117,305 114,608 109,739
Change of benefit terms — — — — —
Differences between expected and actual experience (20,437) 48,898 51,061 22,225 (5,449) Changes of assumptions 30,146 — — 624 0
Benefit Payments (including refunds, excluding PRSB) (91,770) (90,219) (80,937) (75,178) (70,963) Net Change in Total Pension Liability $104,452 $130,261 $128,619 $100,601 $70,890 Total Pension Liability - Beginning $1,996,002 $1,865,741 $1,737,122 $1,636,521 $1,565,631 Total Pension Liability - Ending (a)* $2,100,454 $1,996,002 $1,865,741 $1,737,122 $1,636,521 Plan Fiduciary Net Position
Employee Contributions $31,779 $13,108 $12,054 $10,973 $10,256 Employer Contributions 13,580 30,635 27,068 27,555 26,315 Net Investment Income (Loss) 241,420 206,468 198,976 (160,517) 491,744 Actual Benefit Payments (including Refunds, PRSB) (91,770) (90,219) (80,937) (75,178) (70,963) Administrative & Professional Expense (2,774) (2,458) (2,401) (2,126) (2,282) Net Change in Plan Fiduciary Net Position $192,235 $157,534 $154,760 $(199,293) $455,070 Plan Fiduciary Net Position - Beginning $2,203,371 $2,045,837 $1,891,077 $2,090,370 $1,635,300 Plan Fiduciary Net Position - Ending (b) $2,395,606 $2,203,371 $2,045,837 $1,891,077 $2,090,370 System Net Pension Liability (Surplus) - (a) - (b) $(295,152) $(207,369) $(180,096) $(153,955) $(453,849) Plan fiduciary net position as a percentage of
total pension liability 114.05% 110.39% 109.65% 108.86% 127.73% Covered Payroll** 151,196 $145,669 $134,252 $122,634 $115,341 Net Pension Liability (Surplus) as a percentage of covered payroll (195.21)% (142.36)% (134.15)% (125.54)% (393.48)% * 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 Fire and Police Retirement System l FINANCIAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 60 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 $37,619 $33,211 $30,298 $28,838 $26,569
Interest 105,570 100,609 95,274 90,184 88,363
Change of benefit terms — — — — —
Differences between expected and actual experience 260 (7,067) 6,723 10,896 (42,953) Changes of assumptions (14,745) 55,856 2,891 — 49,427
Benefit Payments (including refunds, excluding PRSB) (67,202) (65,962) (63,071) (59,272) (56,581) Net Change in Total Pension Liability $61,502 $116,647 $72,115 $70,646 $64,825 Total Pension Liability - Beginning $1,504,129 $1,387,482 $1,315,367 $1,244,721 $1,179,896 Total Pension Liability - Ending (a)* $1,565,631 $1,504,129 $1,387,482 $1,315,367 $1,244,721 Plan Fiduciary Net Position
Employee Contributions $10,012 $9,597 $8,964 $8,169 $7,748 Employer Contributions 22,324 20,604 19,697 18,543 18,738 Net Investment Income (Loss) 24,205 82,872 129,163 192,315 6,063 Actual Benefit Payments (including Refunds, PRSB) (67,202) (65,962) (63,071) (59,273) (56,581) Administrative & Professional Expense (1,839) (1,897) (1,710) (1,500) (1,397) Net Change in Plan Fiduciary Net Position ($12,500) $45,214 $93,043 $158,254 $(25,429) Plan Fiduciary Net Position - Beginning $1,647,800 $1,602,586 $1,509,543 $1,351,289 $1,376,718 Plan Fiduciary Net Position - Ending (b) $1,635,300 $1,647,800 $1,602,586 $1,509,543 $1,351,289 System Net Pension Liability (Surplus) - (a) - (b) $(69,669) $(143,671) $(215,104) $(194,176) $(106,568) Plan fiduciary net position as a percentage of
total pension liability 104.45% 109.55% 115.50% 114.76% 108.56% Covered Payroll** $113,843 $109,803 $103,934 $97,369 $94,266 Net Pension Liability (Surplus) as a percentage of covered payroll (61.20)% (130.84)% (206.96)% (199.42)% (113.05)% City of Fresno Fire and Police Retirement System l FINANCIAL Required Supplementary Information Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 61 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 $34,817 $31,779 $3,038 $151,196 21.02%
2024 30,635 30,635 — 145,669 21.03%
2023 27,068 27,068 — 134,252 20.16%
2022 27,556 27,556 — 122,634 22.47%
2021 26,315 26,315 — 115,341 22.81%
2020 22,324 22,324 — 113,843 19.61%
2019 20,604 20,604 — 109,803 18.76%
2018 19,697 19,697 — 103,934 18.95%
2017 18,543 18,543 — 97,369 19.04%
2016 18,738 18,738 — 94,266 19.88%
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 68) and as independently reported by the System’s investment consulting firm, NEPC, LLC (shown in the Investment Section on pages 74-74). 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 money-weighted returns.
City of Fresno Fire and Police Retirement System l FINANCIAL Required Supplementary Information Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 62
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 Fire and Police Retirement System l FINANCIAL Notes to the Required Supplementary Information
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 63 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 4.00 percent to 13.00 percent based on years of service.
Includes inflation at 2.50% plus real across-the-board salary increase of
0.50% plus merit and promotion increases.
Cost-of-Living Adjustments: 3.00% of Tier 1 retirement income and 2.50% of Tier 2 retirement income.
Other Assumptions: See June 30, 2023 funding valuation report, 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, Pub-2010 Safety Healthy Retiree Amount- Weighted Mortality Table (separate tables for males and females), projected generationally with the two-dimensional mortality improvement scale MP-2021. For 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 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 Fire and Police Retirement System l FINANCIAL Notes to the Required Supplementary Information Continued Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 64 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 $ 136,527 $ 123,808
Legal Counsel 195,326 121,194
Information Systems Services 95,564 85,729
Specialized Services 139,722 132,641
Total Professional Services $ 567,139 $ 463,372
Communication
Telephone $ 9,655 $ 5,450
Postage 2,346 1,405
Total Communication $ 12,001 $ 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 $ 134,965 $ 98,853
Membership & Dues 9,274 7,592
Subscriptions & Publications 581 831
Office Supplies 3,787 3,430
Computer Equipment 4,752 4,526
Equipment Lease 10,425 28,792
Insurance 91,188 78,239
Miscellaneous 8,171 9,193
Reimbursement to City for Inter-Dept Services 270,463 243,427 Depreciation 140,337 140,135
Total Other $ 673,943 $ 615,018
Total Administrative Expenses $ 2,774,394 $ 2,457,809
City of Fresno Fire and Police Retirement System l FINANCIAL Other Supplementary Information
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 65 Schedule of Investment Management Expenses
For Fiscal Years Ended June 30, 2025 and 2024
2025 2024
Investment Manager Fees
Equity
Domestic $ 69,252 $ 49,612
International 1,264,602 1,426,779
Private Equity 4,365,315 2,571,834
Fixed Income 427,696 406,131
Private Debt/Credit 18,874,484 24,462,002
Real Assets 10,112,435 9,083,714
Multi-Assets 1,374,342 992,264
Total Investment Manager Fees 36,488,126 38,992,336
Other Investment Expenses
Foreign Income Taxes & Related Services, Charges 1,888,702 2,034,344 Custodial Services 167,027 167,442
Investment Consultant 194,399 184,530
Investment Legal Counsel 80,548 97,381
Analytical Database Service 116,324 111,213
Total Other Investment Expenses 2,447,000 2,594,910
Total Fees & Other Investment Expenses 38,935,126 41,587,246 Securities Lending Expenses
Agent Fees 1,787,430 1,650,262
Total Securities Lending Expenses 1,787,430 1,650,262
Total Investment Expenses $ 40,722,556 $ 43,237,508
Schedule of Payments To Consultants
For Fiscal Years Ended June 30, 2025 and 2024
2025 2024
Actuarial Services $ 136,527 $ 123,808
Audit Services 23,069 21,193
City Information Services 95,564 85,729
Legal Services 195,326 121,194
Medical Consultant 102,939 59,588
Miscellaneous 13,714 51,860
Total Payments to Consultants $ 567,139 $ 463,372
City of Fresno Fire and Police Retirement System l FINANCIAL Other Supplementary Information Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 66 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
68 Investment Report from the Retirement Administrator
74 Investment Consultant’s Report
76 Investment Results (Gross and Net of Fees)
78 Target Asset Allocation and Actual Asset Allocation
80 Largest Stock and Bond Holdings
81 Schedule of Commissions
81 Investment Summary
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 67 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 Fire and Police 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.
City of Fresno Fire and Police Retirement System l INVESTMENT Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 68 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.
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 $2,395,605,595
The System’s 10, 15, and 20-year long-term gross returns of 8.27, 9.3, 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.
City of Fresno Fire and Police Retirement System l INVESTMENT Investment Report from the Retirement Administrator Continued Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 69 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%
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 $2.396 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.
City of Fresno Fire and Police Retirement System l INVESTMENT Investment Report from the Retirement Administrator Continued Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 70 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.
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.
City of Fresno Fire and Police Retirement System l INVESTMENT Investment Report from the Retirement Administrator Continued Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 71 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 developed 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 Fire and Police Retirement System l INVESTMENT Investment Report from the Retirement Administrator Continued Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 72 City of Fresno Fire and Police 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 73 Investment Consultant’s Report
City of Fresno Fire and Police Retirement System l INVESTMENT Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 74 City of Fresno Fire and Police Retirement System l INVESTMENT Investment Consultant's Report Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 75 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 > $1 Billion Median 10.29 9.27 8.98 7.36 Total Equity Composite 2,278,979,698 52.78 15.34 15.79 12.52 9.80 MSCI AC World All Cap Index (Net) 15.92 16.74 13.37 9.66 InvMetrics Public DB Global Equity Median 15.23 15.55 13.13 — Domestic Equity Composite 1,080,887,602 25.03 15.27 19.11 15.92 12.58 Domestic Equity Index 15.30 19.08 16.74 12.65
InvMetrics Public DB US Equity Median 13.85 17.63 15.44 12.08 Private Equity 333,712,589 7.73 8.59 5.91 15.63 —
Private Equity Index 7.90 7.91 16.74 —
International Equity Composite 864,379,507 20.02 18.12 15.01 8.97 7.01 International Equity Index 18.38 14.59 10.91 6.72
InvMetrics Public DB Global ex-US Equity Median 17.59 14.18 10.21 6.72 Total Rates/Credit Composite 1,084,118,797 25.11 7.66 7.49 5.63 5.13 Fixed Income Index 6.72 6.12 3.23 3.94
Blmbg. U.S. Aggregate Index 6.08 2.55 -0.73 1.76
InvMetrics Public DB Fixed Income Median 7.00 4.14 1.22 2.93 Public Fixed Income 491,034,852 11.37 7.12 4.34 0.82 2.81 Blmbg. U.S. Aggregate Index 6.08 2.55 -0.73 1.76
InvMetrics Public DB US Fixed Income Median 6.62 3.75 0.78 2.77 Private Credit 593,083,945 13.74 8.12 10.20 12.13 —
Private Credit Index 8.79 9.84 5.76 —
Real Assets 894,692,186 20.72 5.72 1.41 8.86 7.19
Real Estate Index 2.95 -5.96 2.81 4.75
InvMetrics Public DB Real Estate Public & Private Median 3.55 -4.66 3.87 5.28 Private Real Estate Composite 238,488,036 5.52 5.44 2.66 10.21 10.41 NCREIF ODCE 3.54 -5.43 3.42 5.35
Infrastructure 259,107,486 6.00 9.19 8.66 8.11 —
CPI + 4% (Unadjusted) 6.78 6.98 8.77 —
Cash & Equivalents Composite 60,116,066 1.39 4.51 2.31 3.34 2.27 90 Day U.S. Treasury Bill 4.68 4.56 2.76 1.96
Calculations are prepared by NEPC, LLC using a time-weighted rate of return based on fair values.
City of Fresno Fire and Police Retirement System l INVESTMENT Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 76 Investment Results (Net of Fees)
Net of Fees Ending June 30, 2025
Fair Value ($) % 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 Fire and Police Retirement System l INVESTMENT Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 77 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% -1 0.0% 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 Fire and Police Retirement System l INVESTMENT Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 78 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 Fire and Police Retirement System l INVESTMENT Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 79 Largest Stock Holdings (by Fair Value)
As of June 30, 2025
Shares Stock Holding Fair Value
1) 270,353 TAIWAN SEMICONDUCTOR MANUFACTURING TWD10 $ 9,810,153 2) 115,873 TENCENT HOLDINGS LIMITED HKD0.00002 7,424,755 3) 2,347 MERCADOLIBRE INC COM STK 6,132,968
4) 545,422 AIA GROUP LIMITED NPV 4,891,429
5) 53,175 CRH PLC EQUITY 4,890,933
6) 108,537 SAMSUNG ELECTRONICS CO KRW100 4,809,194
7) 5,433 ASML HOLDING NV EUR0.09 (POST SPLIT) 4,321,281 8) 40,471 NINTENDO CO JPY50 3,888,908
9) 105,830 DEUTSCHE TELEKOM AG NPV(REGD) 3,847,370
10) 62,630 UNILEVER PLC ORD GBP0.031111 3,797,777
Total Largest Stock Holdings $ 53,814,768
Largest Bond Holdings (by Fair Value)
As of June 30, 2025
Share/Par Coupon Maturity
Value Bond Holding Rate Date Fair Value
1) 4,208,843 UNITED STATES OF AMER TREAS BONDS DTD 4.125% 2053/08/15 $ 3,759,516 2) 3,691,264 FEDERAL HOME LN MTG CORP POOL #SD7526 2.500% 2050/10/01 3,112,844 3) 3,781,921 FNMA POOL #FM8308 2.0% DUE 07-01-2051 2.000% 2051/07/01 3,040,597 4) 3,132,711 FEDERAL HOME LN MTG CORP POOL #SD8244 4.000% 2052/09/01 2,918,954 5) 2,950,225 FEDERAL HOME LN MTG CORP POOL #RA7194 3.500% 2052/04/01 2,673,430 6) 2,880,283 FNMA 3.5% 04-01-2052 3.500% 2052/04/01 2,618,886 7) 2,702,270 FNMA POOL #FM7599 3.5% DUE 01-01-2051 3.500% 2051/01/01 2,460,544 8) 2,921,779 FEDERAL HOME LN MTG CORP POOL #SD1581 2.500% 2052/09/01 2,424,432 9) 2,325,694 UNITED STATES OF AMER TREAS BONDS 4.5% 4.500% 2044/02/15 2,247,202 10) 2,401,785 FNMA POOL #CB3594 3.5% DUE 05-01-2052 3.500% 2052/05/01 2,176,617 Total Largest Bond Holdings $ 27,433,022
A complete list of portfolio holdings is available upon request.
City of Fresno Fire and Police Retirement System l INVESTMENT Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 80 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 $ 8,046 1,648,740 $ 0.0049 BARCLAYS CAPITAL 6,440 25,314,280 0.0003
GOLDMAN SACHS INTERNATIONAL 4,807 21,751,770 0.0002
NOMURA SECURITIES NEW YORK 4,645 4,598,480 0.0010
MORGAN STANLEY AND CO., LLC 4,058 42,045,079 0.0001
JEFFERIES INTERNATIONAL LTD 3,636 704,615 0.0052
UBS AG LONDON BRANCH 3,552 205,261 0.0173
CITIGROUP GLOBAL MARKETS EUROPE AG 3,302 79,320 0.0416 GOLDMAN, SACHS AND CO. 3,081 39,990,503 0.0001
MERRILL LYNCH INTERNATIONAL LIMITED 2,941 414,096 0.0071 $ 44,508 136,752,144 $ 0.0003
All Other Brokerage Firms 50,564 1,343,023,053 0.00004 TOTAL $ 95,072 1,479,775,197 $ 0.0001
Investment Summary
For The Fiscal Year Ended June 30, 2025
Investment Value Percent of Fund
Investment
Management Fees
Equity
Domestic $ 592,740,818 24.8% $ 69,252
International 466,637,369 19.4% 1,264,602
Private Equity 187,621,022 7.8% 4,365,315
Fixed Income 298,349,862 12.5% 427,696
Private Debt/Credit 287,302,054 12.0% 18,874,484
Real Assets 501,672,606 21.0% 10,112,435
Multi-Assets 48,769,549 2.0% 1,374,342
Short-Term Investments 10,724,149 0.5% —
Total $ 2,393,817,429 100.0% $ 36,488,126
City of Fresno Fire and Police Retirement System l INVESTMENT Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 81 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
83 Actuarial Certification Letter
87 Summary of Actuarial Assumptions and Funding Method
89 Probabilities of Separation Prior to Retirement
90 Schedule of Active Member Valuation Data
91 Schedule of Retirees and Beneficiaries Added to or
Removed from Rolls
92 Solvency Test
93 Actuarial Analysis of Financial Experience
93 Schedule of Funding Progress
94 Major Benefit Provisions of the Retirement System
96 History of Employer Net Contribution Rates
City of Fresno Fire and Police Retirement System l ACTUARIAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 82 Actuarial Certification Letter
City of Fresno Fire and Police Retirement System l ACTUARIAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 83
City of Fresno Fire and Police Retirement System l ACTUARIAL Actuarial Certification Letter Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 84 City of Fresno Fire and Police Retirement System l ACTUARIAL Actuarial Certification Letter Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 85 City of Fresno Fire and Police Retirement System l ACTUARIAL Actuarial Certification Letter Continued
Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 86 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 Fire and Police System (the System) Retirement Board on November 26, 2025, and are effective for July 1, 2026.
Assumptions
Valuation Interest Rate 6.75%
Inflation: 2.50%
Post-Retirement Mortality
(a) Service Retirement
Pub-2016 Safety Healthy Retiree Amount-Weighted
Above-Median Mortality Table (separate tables for
males and females), 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 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 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 Fire and Police Retirement System l ACTUARIAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 87 Summary of Actuarial Assumptions and Funding Method Continued Funding Method
The System’s liability is being funded on the Entry Age Normal Cost method with the Unfunded Actuarial
Accrued Liability (UAAL) amortized as a level
percentage of payroll. There is no UAAL as of June 30, 2025.
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 33 of the Financial
Section and pages 63 and 64 of the Required
Supplementary Information on the different actuarial
assumptions used for financial reporting versus funding progress.)
Cost-of-Living Adjustment (COLA)
Assumption
The annual cost-of-living adjustment (COLA) is 2.50%
for Tier 2 members and 3.00% for Tier 1 members and
retirees who have retired with the final average formula, or with the career average formula.
DROP Member Assumed Retirement Rates
(%) by Years of Service - Tier 2
Age 5-14 15-19 20 & Over
50 0.00 1.00 5.00
55 0.00 35.00 70.00
60 0.00 20.00 20.00
63 & Over 0.00 0.00 0.00
Members are assumed to remain in the Deferred
Retirement Option Program (DROP) for six years.
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 11.00%
1 - 2 years 10.50%
2 - 3 years 5.00%
3 - 6 years 4.00%
6 - 7 years 3.00%
7 - 10 years 2.00%
10 - 20 years 1.50%
20 and over 1.25%
City of Fresno Fire and Police Retirement System l ACTUARIAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 88 Probabilities of Separation Prior to Retirement
Mortality
Rate (%)
Tier 2
Age Male Female
20 0.02 0.01
25 0.03 0.01
30 0.04 0.02
35 0.04 0.03
40 0.05 0.04
45 0.07 0.06
50 0.10 0.09
55 0.16 0.13
60 0.27 0.20
65 0.45 0.32
70 0.84 0.5
All pre-retirement deaths are assumed to be duty.
Disability
Rate (%)
Tier 2
Age Duty Non-Duty
20 0.06 0.00
25 0.10 0.01
30 0.34 0.01
35 0.68 0.03
40 0.98 0.14
45 1.34 0.23
50 1.68 0.16
55 4.62 0.00
60 12.50 0.00
65 0.00 0.00
Total Termination
(Less Than 5 years of service)
Total Termination
(5 or more years of service)
Rate (%) Rate (%)
Service Tier 2 Age Tier 2
0 – 1 10.00 20 2.00
1 – 2 6.00 25 2.00
2 – 3 4.00 30 2.00
3 – 4 3.00 35 2.00
4 – 5 2.00 40 1.50
45 1.50
100% of members are assumed to elect a
withdrawal of contributions. No
termination is assumed after a member is
assumed to retire.
50 0.00
25% of Tier 2 members with 5+ years of service 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 Fire and Police Retirement System l ACTUARIAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 89 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 1,108 $ 142,343,483 $ 128,469 1.1% DROP Participants 110 17,371,242 157,920 1.5%
Totals 1,218 $ 159,714,725 $ 286,389
June 30, 2024 Active Members 1,148 $ 145,885,780 $ 127,078 9.4% DROP Participants 77 11,983,885 155,635 11.7%
Totals 1,225 $ 157,869,665 $ 282,713
June 30, 2023 Active Members 1,111 $ 129,017,259 $ 116,127 4.7% DROP Participants 92 12,823,477 139,386 4.1%
Totals 1,203 $ 141,840,736 $ 255,513
June 30, 2022 Active Members 1,045 $ 115,913,278 $ 110,922 1.3% DROP Participants 89 11,912,877 133,853 5.3%
Totals 1,134 $ 127,826,155 $ 244,775
June 30, 2021 Active Members 987 $ 108,105,135 $ 109,529 3.5% DROP Participants 95 12,071,386 127,067 0.8%
Totals 1,082 $ 120,176,521 $ 236,596
June 30, 2020 Active Members 999 $ 105,679,917 $ 105,786 5.2% DROP Participants 97 12,222,365 126,004 1.6%
Totals 1,096 $ 117,902,282 $ 231,790
June 30, 2019 Active Members 1,033 $ 103,910,274 $ 100,591 4.6% DROP Participants 90 11,163,174 124,035 4.3%
Totals 1,123 $ 115,073,448 $ 224,626
June 30, 2018 Active Members 1,043 $ 100,270,371 $ 96,137 3.6% DROP Participants 90 10,701,563 118,906 5.4%
Totals 1,133 $ 110,971,934 $ 215,043
June 30, 2017 Active Members 990 $ 91,850,923 $ 92,779 1.1% DROP Participants 96 10,828,198 112,794 1.1%
Totals 1,086 $ 102,679,121 $ 205,573
June 30, 2016 Active Members 947 $ 86,884,960 $ 91,748 0.8% DROP Participants 107 11,932,935 111,523 2.3%
Totals 1,054 $ 98,817,895 $ 203,271
City of Fresno Fire and Police Retirement System l ACTUARIAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 90 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
2025 57 $1,756,230 (31) ($1,155,784) 1,246 $90,829,784 $72,897 (0.29) 2024 69 $2,607,161 (36) ($1,131,426) 1,220 $89,195,842 $73,111 8.05 2023 53 $1,969,110 (20) ($503,250) 1,187 $80,314,864 $67,662 4.37 2022 63 $2,682,320 (34) ($918,250) 1,154 $74,809,611 $64,826 4.62 2021 44 $1,429,318 (25) ($672,017) 1,125 $69,707,525 $61,962 2.31 2020 51 $1,341,603 (30) ($1,012,050) 1,106 $66,983,928 $60,564 0.92 2019 48 $1,585,314 (29) ($676,320) 1,085 $65,113,142 $60,012 2.34 2018 51 $1,231,992 (31) ($708,568) 1,066 $62,510,828 $58,641 4.41 2017 55 $1,432,672 (20) ($456,710) 1,046 $58,748,302 $56,165 2.48 2016 32 $728,058 (26) ($730,485) 1,011 $55,408,166 $54,805 2.55 City of Fresno Fire and Police Retirement System l ACTUARIAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 91 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)
2025 $195,631 $1,239,814 $415,078 $2,150,961 100% 100% 100% 2024 204,590 1,122,027 406,146 1,991,117 100% 100% 100% 2023 197,857 1,064,705 344,724 1,876,149 100% 100% 100% 2022 191,651 982,691 312,269 1,791,487 100% 100% 100%
2021 186,156 920,277 288,707 1,695,906 100% 100% 100%
2020 180,093 880,163 270,890 1,547,641 100% 100% 100%
2019 173,489 839,837 264,423 1,495,023 100% 100% 100%
2018 165,233 801,931 227,567 1,436,725 100% 100% 100%
2017 154,607 770,352 206,389 1,354,974 100% 100% 100%
2016 143,208 728,510 195,698 1,276,604 100% 100% 100%
City of Fresno Fire and Police Retirement System l ACTUARIAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 92 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 $1,733 $1,607 $1,487 $1,395 $1,331 $1,278 $1,195 $1,131 $1,067 $1,020 Salary Increase Greater/(Less) than Expected (18) 38 15 4 — 14 — 5 (9) (28) Asset Return (Greater)/Less than Expected — — — — — — — — — — COLA Increase Greater/(Less) than Expected 5 5 28 17 (2) (4) (5) (6) 11 (24) Other Experience 7 15 13 10 4 (5) 1 9 11 8
Economic Assumption Changes 45 — — (3) — (14) 31 3 — 50 Non-economic Assumption Changes — — — — — — — — — —
Normal Cost 53 48 43 40 39 39 35 33 32 30
Interest 116 107 99 97 92 88 85 81 76 76
Payments (90) (87) (78) (73) (69) (65) (64) (61) (57) (55) Change in Valuation Programs and Methods — — — — — — — — — (10) Ending Actuarial Accrued Liability $1,851 $1,733 $1,607 $1,487 $1,395 $1,331 $1,278 $1,195 $1,131 $1,067 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 $2,150 $1,850 116.2% $300 $160 188.10%
2024 $1,991 $1,733 114.9% $258 $158 163.60%
2023 $1,876 $1,607 116.7% $269 $142 189.60%
2022 $1,791 $1,487 120.5% $304 $128 238.50%
2021 $1,696 $1,395 121.6% $301 $120 250.30%
2020 $1,548 $1,331 116.3% $216 $118 183.60%
2019 $1,495 $1,278 117.0% $217 $115 188.80%
2018 $1,437 $1,195 120.3% $242 $111 218.10%
2017 $1,355 $1131 119.8% $224 $103 217.80%
2016 $1,277 $1067 119.6% $209 $99 211.70%
City of Fresno Fire and Police Retirement System l ACTUARIAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 93 Major Benefit Provisions of the Retirement System
Coverage All Fire and Police employees hired
on or after October 27, 1927, and before August
27, 1990.
All Fire and Police employees hired on or after
August 27, 1990.
Final Average Salary
(FAS)
A. Three-year final average salary; or
B. Salary attached to rank,
average-service weighted
compensation for each rank held.
A. Highest three consecutive year average.
Service Retirement
Requirement:
Age 50 and 10 years of Service, or age 60.
Benefit: (1) and (2)
1. 2¾% of FAS times years of service
before age 50, not to exceed 20 years.
2. 2% of FAS times years of service
after age 50, not to exceed 10 years
Requirement:
Age 50 and 5 years of service.
Benefit:
Retirement Age Benefit Formula
50 51
52 53
54 55 and over
2.00% x FAS x service
2.14% x FAS x service
2.28% x FAS x service
2.42% x FAS x service
2.56% x FAS x service
2.70% x FAS x service
Maximum Benefit: 75% of FAS Maximum Benefit: 75% of FAS Deferred Retirement
Option Program
(DROP)
An employee who is age 50 with 10 years of
service may join the DROP program which is in
essence an alternative form of retirement
distribution. Retirement amount is calculated and
monthly deposits are made to the employee’s
DROP account while the employee continues to
work for a maximum of 10 years.
An employee who is age 50 with 5 years of service
may join the DROP program which is in essence an
alternative form of retirement distribution.
Retirement amount is calculated and monthly
deposits are made to the employee’s DROP account
while the employee continues to work for a
maximum of 10 years.
Disability Retirement a. Requirements:
1. Service-Connected: None
2. Non Service-Connected:
10 years of service.
a. Requirements:
1. Service-Connected: None
2. Non Service-Connected:
10 years of service.
b. Benefit:
1. Service-Connected:
55% of FAS or service retirement,
if higher.
2. Non Service-Connected:
1.65% x FAS x years of service, if
exceeds 36.67% of FAS; or 36.67% of
FAS; or service retirement, if higher.
b. Benefit:
1. Service-Connected:
50% of FAS or service retirement,
if higher.
2. Non Service-Connected:
1½% x FAS x years of service,
if exceeds 1/3 of FAS; or 1/3 of
FAS; or service retirement, if
higher.
Benefit reduced to the extent that income earned
while on disability and the amount of the disability
retirement benefits exceeds the current salary
attached to the last rank held.
Benefit reduced to the extent that income earned
while on disability and the amount of the disability
retirement benefits exceeds the current salary
attached to the last rank held.
Fire & Police First Tier Fire & Police Second Tier
City of Fresno Fire and Police Retirement System l ACTUARIAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 94 Major Benefit Provisions of the Retirement System Continued 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 6 months.
2. Return of contributions with interest.
a. While eligible to retire (after
10 years): 2/3 of Service or
Non Service-Connected
Disability Retirement Benefit.
b. Service-Connected Death:
55% of FAS
a. Before eligible to retire (less than 5 years).
1. One month’s salary for each year of
service, not-to-exceed 6 months.
2. Return of contributions with interest.
a. While eligible to retire (after 5
years): 2/3 of Service or Non-
Service-Connected Disability
Retirement Benefit
b. Service-Connected Death:
50% of FAS
Death After Retirement Two-thirds of the member’s allowance continued to eligible spouse for life.
Two-thirds of the member’s allowance continued
to eligible spouse for life.
Withdrawal Benefits a. If less than 10 years of service, return of contributions.
b. If greater than 10 years of service, right to have vested deferred retirement benefit at normal
retirement date.
a. If less than 5 years of service, return of
contributions.
b. If greater than 5 years of service, right to have
vested deferred retirement benefit.
Post Retirement
Supplemental Benefit
(PRSB)
On May 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
Retirement Board, PRSB benefit payments will be
calculated for eligible recipients and payments for
the following calendar year will begin in January.
On May 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 Retirement 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 a. Based on the weighted mean average compensation attached to all ranks in
the department, limited to a 5%
maximum change per year, if based on
three-year FAS.
b. Based on salary increase for each rank
held, if benefit was calculated on salary
attached to average rank.
a. Based on the Consumer Price Index
for all Urban Wage Earners and all
Clerical Workers (U.S. City Average)
limited to 3% change per year.
Member Contribution
Rates
Varies based on entry age. 9% of Compensation.
Fire & Police First Tier Fire and Police Second Tier
City of Fresno Fire and Police Retirement System l ACTUARIAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 95 History of Actuarially Determined Employer Net Contribution Rates (Tier 1) 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%
35.00%
Fiscal Year Ending June 30 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Employer Normal 26.88 % 29.59 % 28.38 % 28.45 % 27.77 % 29.55 % 28.76 % 29.80 % 30.25 % 29.92 % Surplus Offset/Contribution Adjustment (6.74%) (10.57%) (9.46%) (9.73%) (8.18%) (6.73%) (6.20%) (9.46%) (9.17%) (6.83%) Employer Net Contribution 20.14 % 19.02 % 18.92 % 18.72 % 19.59 % 22.82 % 22.56 % 20.34 % 21.08 % 23.09 % City of Fresno Fire and Police Retirement System l ACTUARIAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 96 History of Actuarially Determined Employer Net Contribution Rates (Tier 2) 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 22.07 % 22.24 % 23.15 % 23.07 % 23.29 % 25.79 % 25.27 % 25.35 % 25.47 % 25.34 % Surplus Offset/Contribution Adjustment (1.93%) (3.22%) (4.23%) (4.35%) (3.70%) (2.97%) (2.71%) (5.01%) (4.39%) (2.25%) Employer Net Contribution 20.14 % 19.02 % 18.92 % 18.72 % 19.59 % 22.82 % 22.56 % 20.34 % 21.08 % 23.09 % City of Fresno Fire and Police Retirement System l ACTUARIAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 97 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
99 Statistical Section Review
100 Schedule of Changes in Fiduciary Net Position
101 Schedule and Graph of Additions by Source
102 Schedule and Graph of Deductions by Type
103 Membership Information
City of Fresno Fire and Police Retirement System l STATISTICAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 98 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 Fire and Police Retirement System (System).
It also provides multi-year trend of financial and operation information to facilitate comprehensive understanding of how the System’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 Fire and Police Retirement System l STATISTICAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 99 Schedule of Changes in Fiduciary Net Position
Last Ten Fiscal Years 2016 - 2025
(Dollars in Millions)
2025 2024 2023 2022 2021
Additions
Employer Contributions $ 31.8 $ 30.6 $ 27.1 $ 27.6 $ 26.3 Member Contributions 13.6 13.1 12.1 11.0 10.3
Net Investment Income (Loss) 241.4 206.5 198.9 (160.6) 491.70 Total Additions $ 286.8 $ 250.2 $ 238.1 $ (122.0) $ 528.3 Deductions
Benefit Payments $ 88.8 $ 86.7 $ 77.7 $ 72.8 $ 68.0
Post Retirement Supplemental Benefits 2.0 2.5 2.7 2.0 1.7 Refunds 0.9 1.0 0.5 0.4 1.2
Administrative 2.8 2.5 2.4 2.1 2.3
Total Deductions $ 94.5 $ 92.7 $ 83.3 $ 77.3 $ 73.2
Change in Fiduciary Net Position $ 192.3 $ 157.5 $ 154.8 $ (199.3) $ 455.1 2020 2019 2018 2017 2016
Additions
Employer Contributions $ 22.3 $ 20.6 $ 19.7 $ 18.5 $ 18.7 Member Contributions 10.0 9.6 9.0 8.2 7.7
Net Investment Income (Loss) 24.2 82.9 129.1 192.3 6.1 Total Additions $ 56.5 $ 113.1 $ 157.8 $ 219.0 $ 32.5
Deductions
Benefit Payments $ 65.0 $ 63.0 $ 60.5 $ 57.0 $ 54.4
Post Retirement Supplemental Benefits 2.0 2.1 2.0 1.7 1.0 Refunds 0.2 0.9 0.6 0.6 1.2
Administrative 1.8 1.9 1.7 1.5 1.4
Total Deductions $ 69.0 $ 67.9 $ 64.8 $ 60.8 $ 58.0
Change in Fiduciary Net Position $ (12.5) $ 45.2 $ 93.0 $ 158.2 $ (25.5) City of Fresno Fire and Police Retirement System l STATISTICAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 100 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 2023 2024 2025
$-300,000
$-200,000
$-100,000
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
EMPLOYER CONTRIBUTIONS $ 18,738 $ 18,543 $ 19,697 $ 20,604 $ 22,324 $ 26,315 $ 27,556 $ 27,068 $ 30,635 $ 31,779 EMPLOYEE CONTRIBUTIONS 7,748 8,169 8,964 9,597 10,012 10,256 10,973 12,054 13,108 13,580 NET INVESTMENT INCOME (LOSS) 6,063 192,318 129,162 82,872 24,205 491,745 (160,518) 198,976 206,468 241,421 TOTAL $ 32,549 $ 219,030 $ 157,823 $ 113,073 $ 56,541 $ 528,316 $ (121,989) $ 238,098 $ 250,211 $ 286,780 City of Fresno Fire and Police Retirement System l STATISTICAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 101 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 $ 25,662 $ 28,079 $ 28,855 $ 27,381 $ 28,753 $ 31,484 $ 33,324 $ 34,732 $ 41,894 $ 40,521 SERVICE DISABILITY 24,753 25,539 28,533 31,033 30,529 30,743 33,301 36,584 38,120 40,899 NON-SERVICE DISABILITY 340 350 280 285 170 132 234 147 151 153 SURVIVORS 4,653 4,780 4,843 6,414 7,532 7,348 7,950 8,852 9,031 9,257 REFUNDS 1,173 525 560 849 218 1,255 369 622 1,024 941
PROFESSIONAL &
ADMINISTRATIVE 1,397 1,503 1,710 1,897 1,839 2,283 2,126 2,401 2,457 2,774 TOTAL $ 57,978 $ 60,776 $ 64,781 $ 67,859 $ 69,041 $ 73,245 $ 77,304 $ 83,338 $ 92,677 $ 94,545 City of Fresno Fire and Police Retirement System l STATISTICAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 102 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 $ 1,104 $ 3,912 $ 4,531 $ 6,595 $ 7,222 $ — $ 3,894 Average Monthly DROP Payment — — 254 2,242 1,537 — 672 Average Final Average Salary 7,280 11,370 10,196 9,774 1,183 — 6,634 Number of New Retired Members 1 1 13 9 10 — 34
Period 7/1/23 to 6/30/24*
Average Monthly Pension Benefits $ 3,544 $ 4,969 $ 4,852 $ 6,457 $ 7,754 $ — $ 4,596 Average Monthly DROP Payment — — 720 1,617 2,828 — 861 Average Final Average Salary 8,397 9,208 9,173 9,788 10,001 — 7,761 Number of New Retired Members 3 1 18 19 11 — 52
Period 7/1/22 to 6/30/23*
Average Monthly Pension Benefits $ 2,246 $ 3,070 $ 4,460 $ 6,256 $ 8,292 $ 7,195 $ 5,253 Average Monthly DROP Payment — — 1,236 1,222 1,522 — 663 Average Final Average Salary 7,311 8,145 9,333 10,433 12,280 9,487 9,498 Number of New Retired Members 6 8 9 14 8 1 46
Period 7/1/21 to 6/30/22*
Average Monthly Pension Benefits $ 962 $ 3,637 $ 4,196 $ 5,617 $ 7,881 $ — $ 3,716 Average Monthly DROP Payment — 602 442 2,658 3,862 — 1,261 Average Final Average Salary 6,283 7,810 8,925 8,769 11,007 — 7,132 Number of New Retired Members 1 2 11 18 11 — 43
Period 7/1/20 to 6/30/21*
Average Monthly Pension Benefits $ — $ 4,255 $ 3,651 $ 5,388 $ 7,268 $ 9,424 $ 4,998 Average Monthly DROP Payment — — 653 2,570 4,982 10,234 3,073 Average Final Average Salary — 9,661 8,278 8,864 11,179 14,679 8,777 Number of New Retired Members — 6 4 16 8 1 35
*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 Fire and Police Retirement System l STATISTICAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 103 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 $ 1,330 $ 3,419 $ 3,639 $ 4,620 $ 5,394 $ 11,451 $ 4,976 Average Monthly DROP Payment — 779 1,222 1,951 409 12,414 2,796 Average Final Average Salary 6,283 6,873 8,206 8,385 9,513 18,542 9,634 Number of New Retired Members 1 7 7 13 4 1 33
Period 7/1/18 to 6/30/19*
Average Monthly Pension Benefits $ 3,057 $ 3,519 $ 3,972 $ 5,317 $ 6,012 $ 7,064 $ 4,824 Average Monthly DROP Payment 205 — 858 3,765 4,303 6,515 2,608 Average Final Average Salary 5,052 9,006 8,182 9,428 9,754 11,499 8,820 Number of New Retired Members 3 4 7 8 7 1 30
Period 7/1/17 to 6/30/18*
Average Monthly Pension Benefits $ 2,603 $ 3,469 $ 4,020 $ 5,024 $ 4,923 $ 4,637 $ 4,113 Average Monthly DROP Payment — — 1,174 3,520 2,858 3,108 1,777 Average Final Average Salary 7,949 8,113 7,730 8,508 9,046 7,019 8,061 Number of New Retired Members 7 6 6 9 7 1 36
Period 7/1/16 to 6/30/17*
Average Monthly Pension Benefits $ 1,633 $ 3,211 $ 4,100 $ 5,027 $ 5,481 $ 5,909 $ 4,227 Average Monthly DROP Payment — — 2,305 2,560 4,372 4,266 2,251 Average Final Average Salary 6,049 7,648 8,067 8,565 9,524 10,141 8,332 Number of New Retired Members 3 4 5 11 10 1 34
Period 7/1/15 to 6/30/16*
Average Monthly Pension Benefits $ 612 $ 2,914 $ 3,448 $ 4,268 $ 4,922 $ 3,862 $ 3,338 Average Monthly DROP Payment 0 3,128 1,154 3,245 5,207 2,907 2,607 Average Final Average Salary 4,761 7,579 8,011 7,845 8,928 6,689 7,302 Number of New Retired Members 1 5 5 5 3 3 22
*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 Fire and Police Retirement System l STATISTICAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 104 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 60 56 1 3
$1,001 - $2,000 79 68 4 7
$2,001 - $3,000 73 41 11 21
$3,001 - $4,000 125 42 21 62
$4,001 - $5,000 253 38 167 48
$5,001 - $6,000 183 59 107 17
$6,001 - $7,000 117 57 49 11
$7,001 - $8,000 64 29 30 5
$8,001 - $9,000 85 47 36 2
> $9,000 207 119 86 2
Total 1,246 556 512 178
*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 60 45 8 7 —
$1,001 - $2,000 79 55 13 8 3
$2,001 - $3,000 73 49 12 9 3
$3,001 - $4,000 125 71 27 21 6
$4,001 - $5,000 253 143 39 52 19
$5,001 - $6,000 183 103 32 38 10
$6,001 - $7,000 117 58 18 32 9
$7,001 - $8,000 64 31 13 17 3
$8,001 - $9,000 85 32 13 29 11
> $9,000 207 96 23 80 8
Total 1,246 683 198 293 72
**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 Fire and Police Retirement System l STATISTICAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 105 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
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Service Retiree Benefits $30.3 $32.9 $33.7 $33.8 $36.3 $38.8 $41.3 $43.6 $50.9 $49.8 Disability Retiree Benefits 25.1 25.9 28.8 31.3 30.7 30.9 33.5 36.8 38.3 41.1 Separation 1.1 0.5 0.6 0.9 0.2 1.3 0.4 0.6 1.0 0.9
Death Benefits 0.1 — — — — — — — — —
Misc — — — — — — — — — —
Total Benefit Deductions $56.6 $59.3 $63.1 $66.0 $67.2 $71.0 $75.2 $81.0 $90.2 $91.8 City of Fresno Fire and Police Retirement System l STATISTICAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 106 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
0 200
400
600
800
1000
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
ACTIVE VESTED 899 863 808 795 805 845 856 878 843 834
ACTIVE NON-VESTED 152 221 330 331 291 240 280 325 383 385 DEFERRED 81 90 94 88 85 90 58 62 71 65
TOTAL 1,132 1,174 1,232 1,214 1,181 1,175 1,194 1,265 1,297 1,284 City of Fresno Fire and Police Retirement System l STATISTICAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 107 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 50
100
150
200
250
300
350
400
450
500
550
600
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
SERVICE RETIREMENTS 452 468 463 458 475 485 505 518 548 556 SERVICE DISABILITY 376 401 426 440 446 456 460 483 491 507 NON-SERVICE DISABILITY 5 5 4 5 3 4 5 5 5 5
SURVIVORS 168 168 169 176 182 180 184 181 176 178
TOTAL 1,001 1,042 1,062 1,079 1,106 1,125 1,154 1,187 1,220 1,246 City of Fresno Fire and Police Retirement System l STATISTICAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 108 Summary of Active Participants
NUMBER OF PENSIONABLE ANNUAL NET CHANGE IN
YEAR MEMBERS PAYROLL AVERAGE SALARY AVERAGE SALARY
2025 1,219 $151,195,533 $124,032 4.39%
2024 1,226 $145,668,744 $118,816 6.47%
2023 1,203 $134,251,602 $111,597 3.38%
2022 1,136 $122,633,655 $107,952 1.55%
2021 1,085 $115,341,276 $106,305 2.34%
2020 1,096 $113,842,558 $103,871 6.52%
2019 1,126 $109,803,190 $97,516 6.77%
2018 1,138 $103,934,234 $91,331 1.68%
2017 1,084 $97,368,618 $89,823 1.48%
2016 1,051 $93,030,822 $88,516 (3.10)%
Summary of Retirees
ANNUAL NET CHANGE
ANNUAL AVERAGE IN BENEFITS
NUMBER BENEFITS TO ALLOWANCE TO
YEAR OF RETIREES PARTICIPANTS (INDIVIDUAL) PARTICIPANTS 2025 1,246 $90,829,784 $72,897 (0.29%)
2024 1,220 $89,195,842 $73,111 8.05%
2023 1,187 $80,314,864 $67,662 4.37%
2022 1,154 $74,809,611 $64,826 4.62%
2021 1,125 $69,707,525 $61,962 2.31%
2020 1,106 $66,983,928 $60,564 0.36%
2019 1,079 $65,113,142 $60,346 2.52%
2018 1,062 $62,510,828 $58,861 4.40%
2017 1,042 $58,748,302 $56,380 1.86%
2016 1,001 $55,408,165 $55,353 2.85%
City of Fresno Fire and Police Retirement System l STATISTICAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 109 Member and City Contribution Rates
Last Ten Fiscal Years 2016 - 2025
TIER I
As of June 30
Member Rates City Contribution Rates
Basic at Entry Age
Total
City
Less
Prefunded Actuarial
Accrued Liability
Net City
Contribution
Fiscal Year Valuation Date 20 30 40 Rate (PAAL) Rate
2025 2023 5.01% 8.79% 8.09% 25.36% (2.27%) 23.09%
2024 2022 5.01% 8.79% 8.09% 25.51% (4.43%) 21.08%
2023 2021 4.68% 8.34% 7.71% 25.45% (5.11%) 20.34%
2022 2020 4.68% 8.34% 7.71% 25.39% (2.83%) 22.56%
2021 2019 4.68% 8.34% 7.71% 25.94% (3.12%) 22.82%
2020 2018 4.34% 7.84% 7.30% 23.53% (3.94%) 19.59%
2019 2017 4.34% 7.84% 7.30% 23.44% (4.72%) 18.72%
2018 2016 4.34% 7.84% 7.30% 28.38% (9.46%) 18.92%
2017 2015 4.52% 7.75% 6.94% 29.59% (10.57%) 19.02%
2016 2014 4.52% 7.75% 6.94% 26.88% (6.74%) 20.14%
TIER II
As of June 30
Member Rates City Contribution Rates
Basic at Entry Age
Total
City
Less
Prefunded Actuarial
Accrued Liability
Net City
Contribution
Fiscal Year Valuation Date 20 30 40 Rate (PAAL) Rate
2025 2023 9.00% 9.00% 9.00% 25.36% (2.27%) 23.09%
2024 2022 9.00% 9.00% 9.00% 25.51% (4.43%) 21.08%
2023 2021 9.00% 9.00% 9.00% 25.45% (5.11%) 20.34%
2022 2020 9.00% 9.00% 9.00% 25.39% (2.83%) 22.56%
2021 2019 9.00% 9.00% 9.00% 25.94% (3.12%) 22.82%
2020 2018 9.00% 9.00% 9.00% 23.53% (3.94%) 19.59%
2019 2017 9.00% 9.00% 9.00% 23.44% (4.72%) 18.72%
2018 2016 9.00% 9.00% 9.00% 23.15% (4.23%) 18.92%
2017 2015 9.00% 9.00% 9.00% 22.24% (3.22%) 19.02%
2016 2014 9.00% 9.00% 9.00% 22.07% (1.93%) 20.14%
Data Source: Annual Actuarial Valuation Reports
City of Fresno Fire and Police Retirement System l STATISTICAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 110 Economic Assumptions and Funding Method
Last Ten Fiscal Years 2016 - 2025
Valuation Date Salary Cost-of-Living Inflation Funding
June 30 Interest Scale Adjustment (COLA) Component Method 2025 6.75% 5.0% Avg 2.50 - 3.00% 2.50% Entry Age Normal 2024 6.75% 5.0% Avg 2.50 - 3.00% 2.50% Entry Age Normal 2023 6.75% 5.0% Avg 2.50 - 3.00% 2.50% Entry Age Normal 2022 6.75% 5.5% Avg 2.50 - 3.00% 2.50% Entry Age Normal 2021 7.00% 5.25% Avg 2.75 - 3.25% 2.75% Entry Age Normal 2020 7.00% 5.25% Avg 2.75 - 3.25% 2.75% Entry Age Normal 2019 7.00% 5.25% Avg 2.75 - 3.25% 2.75% Entry Age Normal 2018 7.25% 5.5% Avg 3.00 - 3.50% 3.00% Entry Age Normal 2017 7.25% 5.5% Avg 3.00 - 3.50% 3.00% Entry Age Normal 2016 7.25% 5.5% Avg 3.00 - 3.75% 3.00% Entry Age Normal Source: The Segal Company June 30, 2025, Actuarial Valuation Report Source: The Segal Company June 30, 2025, Actuarial Valuation Report City of Fresno Fire and Police Retirement System l STATISTICAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 111 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
$100000
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
BENEFITS $54,428 $57,029 $60,492 $62,991 $65,020 $68,027 $72,785 $77,662 $86,681 $88,825 PRSB 980 1,719 2,019 2,122 1,964 1,680 2,024 2,653 2,515 2,005 WITHDRAWALS 1,173 525 560 849 218 1,255 369 622 1,023 940 TOTAL $56,581 $59,273 $63,071 $65,962 $67,202 $70,962 $75,178 $80,937 $90,219 $91,770 City of Fresno Fire and Police Retirement System l STATISTICAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 112 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
$4000
$4500
$5000
$5500
$6000
$6500
Average Monthly 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Benefit $4,531 $4,561 $4,747 $4,865 $4,899 $5,039 $5,256 $5,452 $5,921 $5,941 PRSB 82 138 158 164 148 124 146 186 172 134
Average Monthly Benefit Total $4,613 $4,699 $4,905 $5,029 $5,047 $5,163 $5,402 $5,638 $6,093 $6,075 City of Fresno Fire and Police Retirement System l STATISTICAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 113
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 0.25
0.50 0.75
1.00 Separation Rate Before Retirement
Due to Death*
Rate %
Tier II
Age Male Female
20 0.02 0.01
25 0.03 0.01
30 0.04 0.02
35 0.04 0.03
40 0.05 0.04
45 0.07 0.06
50 0.10 0.09
55 0.16 0.13
60 0.27 0.20
65 0.45 0.32
70 0.84 0.50
*All pre-retirement deaths are presumed to be duty
EXPECTATION OF LIFE
(Disabled Retirees)
Years of Age
Tier II Duty Tier II Non-Duty
20 25 30 35 40 45 50 55 60
0.00 5.00
10.00 15.00
Separation Rates Prior to Retirement
Due to Disability
Rate %
Age Tier II Duty
Tier II Non-
Duty
20 0.06 0.00
25 0.10 0.01
30 0.34 0.01
35 0.68 0.03
40 0.98 0.14
45 1.34 0.23
50 1.68 0.16
55 4.62 0.00
60 12.50 0.00
City of Fresno Fire and Police Retirement System l STATISTICAL Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 114 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
116 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 115 Independent Auditor’s Internal Control Letter
City of Fresno Fire and Police Retirement System l COMPLIANCE Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 116 Independent Auditor’s Internal Control Letter Continued City of Fresno Fire and Police Retirement System l COMPLIANCE Annual Comprehensive Financial Report For Fiscal Years Ended June 30, 2025 and 2024 117