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At the September Board meeting, SDCERS reported a net return of 5.2% for Fiscal Year 2023. As of June 30, 2023, the trust fund’s assets totaled approximately $10.6 billion. SDCERS’ annualized rate of return over the past 10 years is 7.7%, and its return since inception is 8.7%.
SDCERS’ net return for Fiscal Year 2023 of 5.2% was less than its assumed rate of return (6.5%), and also below the policy benchmark, which posted a 7.6% return for the year. The policy benchmark is a measure of how the Total Fund would have performed if the actively managed public portions of the portfolio had been completely passively invested in index funds, and if the private portions of the portfolio achieved stated benchmark returns. Allocations away from the policy benchmark, in other words, relative over- and underweights to specific asset classes, as well as selection effects within specific asset classes, hurt SDCERS’ relative returns. Specifically, SDCERS did not meet its benchmark for FY 2023 primarily due to the Fund’s overweight to Private Equity, which underperformed other asset classes on a relative basis, and underperformance of the Opportunity Fund investments. The Opportunity Fund underperformed its benchmark by 13.9%, and the majority of this underperformance is explained by the difference between the policy benchmark return, which is a mix of global equity and fixed income, and the strategy specific benchmark returns.
As of June 30, 2023, SDCERS benched the performance of the Opportunity Fund to a mix of 78% global stocks and 22% U.S. Fixed Income. This mix was used to represent the opportunity cost of allocating assets to the Opportunity Fund. Going forward, the Opportunity Fund will be benchmarked to indices that more closely align with the type of investments held, which should control tracking error to the policy benchmark. Looking at the performance of the Opportunity Fund against the trend following benchmark, the Managed Futures allocation underperformed as a result of trend reversals in fixed income markets in the first quarter of 2023. SDCERS’ trend-following managers were short in fixed income when rates rallied on the heels of the regional banking crisis, hurting relative returns.
While Private Equity enjoyed fantastic returns in 2021 and 2022, the asset class was challenged in late 2022 and into 2023 as a result of the Fed’s interest rate hiking cycle, which created a less favorable environment for Initial Public Offerings amidst higher borrowing costs. SDCERS’ overweight to private equity hurt returns from both an allocation and selection effect, as private equity as an asset class underperformed, and also from a selection effect, as private equity holdings within SDCERS’ portfolio underperformed the private equity benchmark by 2.9% due to valuation write-downs.
Performance can also be measured in comparison to returns of other public pension plans, though it is important to remember that different plans have a variety of circumstances impacting their asset allocations and, in turn, their return targets. SDCERS compares very favorably against its peers over longer time periods – posting returns in the upper second quartile of the universe over rolling 3-, 5-, and 10-year periods ending June 30, 2023. Over the past 20 years, SDCERS’ return is in the top 4% of similarly-sized public pension plans. SDCERS’ risk-adjusted return, which takes into account reward for risk undertaken, is in the top quartile compared to similarly-sized public pension plans over the past 3, 5, and 10 years.
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This year's Annual Membership Meeting took place in-person at the Balboa Park Club Ballroom on October 26th. If you missed it, you can download a copy of the presentation here.
The theme of the meeting was "A fiduciary builds the strongest trust from bricks of integrity, transparency, and customer service, which is reinforced by accountability and professionalism," which incorporates all of SDCERS’ core values.
Here is a short synopsis of this year's presentations:Marcelle Voorhies Rossman, Deputy Chief Executive Officer, explained how SDCERS participated in the unwinding of Proposition B, which closed the City’s pension system to most new hires between July 20, 2012 and July 10, 2021.Carina Coleman, Chief Investment Officer, provided a summary of SDCERS' investment performance and other investment activities in fiscal year 2022.Gregg Rademacher, Chief Executive Officer, expanded on SDCERS' core values and how these values are upheld by SDCERS’ staff in the pursuit of securing all of our members’ current and future pension benefits.Cynthia Queen, Member Services Director, discussed SDCERS’ fiduciary duty to our members and the importance of communication from a member services standpoint, gave a brief overview of the Member Portal, and encouraged all members to register for their own Member Portal account.We'd like to thank the attendees at this year's meeting for being a wonderful, engaging audience. The meeting was video recorded and you can watch it here. We hope to see you all at next year's meeting!
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For the first time since 2019, this year's SDCERS Annual Membership Meeting will take place in person on October 28th at the Balboa Park Club Ballroom.
The theme of the meeting is aligned with our core values: "A fiduciary builds the strongest trust from bricks of integrity, transparency, and customer service, which is reinforced by accountability and professionalism."
The presenters will include SDCERS’ Board President, Paul Kaufmann; SDCERS’ CEO, Gregg Rademacher; SDCERS’ Deputy CEO, Marcelle Voorhies Rossman; SDCERS’ Chief Investment Officer, Carina Coleman; and SDCERS’ Director of Member Services, Cynthia Queen.Directions: Balboa Park Club Ballroom, 2144 Pan American Road West. Enter Balboa Park from Park Boulevard and turn west on Presidents Way. The Ballroom is located in the South Palisades area of the park, just north of Puppet Theater.
All stakeholders are invited to attend, and no RSVP or registration is required. The meeting will also be video recorded and uploaded to our YouTube channel as soon as it is available. We hope to see you all at this year's meeting!
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At its September Board meeting, SDCERS reported a net return of -1.7% for Fiscal Year 2022. As of June 30, 2022, the trust fund’s assets totaled just over $10.0 billion – a net year over year decrease of approximately $328 million. SDCERS’ annualized rate of return over the past 10 years is 8.5%, and its return since inception is 8.8%.
Although SDCERS’ net return for Fiscal Year 2022 was negative, it significantly outperformed its benchmark, which posted a -5.7% return for the year. The benchmark is a measure of how the total fund would have performed if it had been completely invested in index funds. SDCERS surpassed its benchmark due to the performance of its active managers. In particular, SDCERS’ managed futures allocation had a strong performance over the past year. The managed futures allocation, which seeks to benefit from either upwards or downwards trends in stocks, bonds, commodities, and currencies, was added to the fund in 2019 to add diversification to the plan and act as a buffer in periods of market stress.
Performance can also be measured in comparison to other public pension plans, although it is important to remember that different plans have a variety of sizes, circumstances, and funding statuses, all of which impact their asset allocations and, in turn, their return targets. This past fiscal year, SDCERS’ total fund net return was in the top 4% compared to other similarly-sized plans. Over longer time periods, SDCERS stacks up very well against its peers – posting top quartile returns over rolling 3-, 5-, 10- and 20-year periods ending June 30, 2022.
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At today's Board meeting, SDCERS’ Investments Team reported a final return of 24.9% (net of fees) for Fiscal Year 2021. As of June 30, 2021, the trust fund’s assets totaled just over $10 billion – the highest level SDCERS has seen in its history! The end of fiscal year total reflects a net increase of about $2.0 billion since June 30, 2020. SDCERS’ average rate of return over the past 20 years is 7.8%, and since its inception is 9.1%.
There are a few ways to measure an investment portfolio’s performance. One way we measure our performance is by comparing our actual rate of return to the actuarial rate of return, which is the expected earnings rate determined by SDCERS’ actuary and used to calculate things like contribution rates. We are happy to report that our 24.9% return is vastly greater than our actuarial rate of return of 6.5%, which indicates SDCERS is maintaining its long-term investment strategy to ensure the continued payment of promised pension benefits to its members.
Another way to measure performance is by comparing our returns to a policy benchmark, which is how the total fund would perform if it was completely invested in index funds for each of the assets classes it was invested in. This fiscal year SDCERS outperformed its benchmark which had a 24.4% return.
Performance can also be measured in comparison to other public pension plans, although it is important to remember that plans have very different sizes, circumstances, and funding statuses which impacts their asset allocations and in turn their return targets. Over longer time periods, SDCERS stacks up very well with its peers – over the past 20 years, SDCERS experienced higher returns than 93% of the 192 other plans in our peer group.
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SDCERS’ Investment Committee will be holding a special meeting on Monday, May 18th beginning at 9:00 a.m. PST. SDCERS’ Board of Administration will also be holding a special meeting on Wednesday, May 20th at 8:30 a.m. PST. These meetings will be held remotely and Investment Committee and Board members will attend their respective meetings telephonically. The meeting room will be closed to the public and only SDCERS staff whose presence is necessary to run the meeting will be onsite.
Although the public will be unable to physically attend these meetings, we have made these meetings available for the public to attend remotely. To attend the Investment Committee meeting, please click the following link at or around 9:00 a.m. PST on May 18th. You will have to download the Zoom application in order to attend.
May 18th Investment Committee meeting Zoom webinar link: https://zoom.us/j/94224022615
Once you are in the meeting, you can click the “View Options” bar at the top of the screen and then “Side-by-side mode” in order to see both the presenter’s screen and the webcams of Committee members and panelists.
SDCERS will also be live streaming the entirety of the Board meeting on May 20th. To access the live stream, go to our Board Meeting Agendas page before the meeting starts and click on the “Agenda” link corresponding to the 5/20/2020 Board of Administration meeting. This will open a new tab with the agenda for the May 20th meeting, which includes an embedded video player that will automatically begin the live stream once the meeting starts. A video recording of the meeting will also be available on this same page the week following the meeting, as well as on our YouTube page.
Please note that members of the public will not be able to speak during these meetings. If you would like to participate in either meeting, please use our Contact Us page to submit public comment in advance of the meeting and identify to which meeting your comment is directed. We will be accepting public comments for the Investment Committee meeting up until 8:30 a.m. on May 18th, and for the special Board meeting up until 8:00 a.m. on May 20th. Any appropriate messages timely received will be read aloud for the record and/or distributed to the Investment Committee members or Board of Administration at the corresponding meeting.
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At the September Board meeting, SDCERS’ Investments Team reported a final return of 7% (net of fees) for Fiscal Year 2019. As of June 30, 2019, the trust fund’s assets totaled $8.4 billion, reflecting a net increase of $370 million over the past year. SDCERS’ average rate of return over the past 20 years is 7.3%, and since its inception is 8.9%.
There are a few ways to measure an investment portfolio’s performance – after all, 7% is great if the market averaged only a 3% return for example, but 7% isn’t so good if the market averaged 10-15%. One way we measure our performance is by comparing our actual rate of return to the actuarial rate of return, which is the expected earnings rate determined by SDCERS’ actuary and used to calculate things like contribution rates. We are happy to report that our 7% return beat our actuarial rate of return of 6.5%, which indicates SDCERS is maintaining its long-term investment strategy to ensure the continued payment of promised pension benefits to its members.
Another way to measure performance is by comparing our returns to a market benchmark, which is basically how the market did if its asset allocations were invested proportionate to SDCERS’ portfolio. Unfortunately, we did not beat our market benchmark of 7.6%; this is primarily due to relative underperformance from our private equity investments. (See full article for more details.)
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SDCERS’ Total Fund reported performance of +8.9% net of fees compared to the benchmark of 7.6% and assets topped $8 billion for the fiscal year ended June 30, 2018. U.S. equities were a strong source of value-add during the year, up 16.3% compared to the benchmark of 14.8%. Learn More...
San Diego City Employees’ Retirement System (SDCERS) reported a final return of 13.5% (net of fees) for the fiscal year ending June 30, 2017. Total Fund assets totaled $7.5 billion, representing growth of approximately $686 million during the fiscal year. While each asset class generated positive returns, the Fund’s double-digit return was primarily driven by public equities.
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San Diego City Employees’ Retirement System (SDCERS) reported a preliminary return of 13.4% (net of fees) for the fiscal year ended June 30, 2017. Total Fund assets totaled $7.5 billion, representing growth of approximately $686 million during the fiscal year. While each asset class generated positive returns, the Fund’s double-digit return was primarily driven by public equities.
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The Investment Division recently completed a review of SDCERS’ risk-adjusted return to understand better how SDCERS is being compensated for the risk it assumes in its portfolio. Aiming for a higher return is great, but not if it comes at the cost of taking on excessive risk that threatens the portfolio’s long-term stability. Learn More...
San Diego City Employees’ Retirement System (SDCERS) reported a preliminary return of 1.1% (net of fees) for the fiscal year ending June 30, 2016. Despite the low absolute return, the performance was in the top third of the All Public Funds Universe obtained from BNY Mellon and Investment Metrics. Assets under management were $6.8 billion as of June 30, 2016. Learn More...
SDCERS’ Chief Investment Officer, Liza Crisafi, received the Institutional Investor Small Public Pension of the Year award at the 7th Annual U.S. Investment Management Awards in New York City. Learn More...
San Diego City Employees’ Retirement System (SDCERS) reported a final return of 3.3% (net of fees) for the fiscal year ending June 30, 2015. Assets under management grew $122 million during the fiscal year. Learn More...
San Diego City Employees’ Retirement System (SDCERS) reported a preliminary return of 3% (net of fees) for the fiscal year ending June 30, 2015. Assets under management grew $100 million during the fiscal year.
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SDCERS is pleased to present its Popular Annual Financial Report for FY 2014. The PAFR provides a summary of SDCERS' financial health, investment performance and key accomplishments throughout the year. Learn More...
Investment officers from the San Diego City Employees’ Retirement System (SDCERS) today reported a final 16.8 percent investment return (net of fees) for the fiscal year ending June 30, 2014. Assets under management grew by $1 billion during the fiscal year.
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The San Diego City Employees' Retirement System reported Tuesday that its net investment return for the fiscal year that ended June 30 was 17.3 percent, higher than initially believed. Learn More...
Investment officers from the San Diego City Employees’ Retirement System (SDCERS) today reported a revised preliminary 17.3 percent investment return (net of fees) for the fiscal year ending June 30, 2014. Learn More...
The San Diego City Employees’ Retirement System (SDCERS) has issued a Request for Proposals for General Investment Consultant. Learn More...
Council President Gloria praises pension system following solid investment returns for FY 2014
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Investment officers from the San Diego City Employees’ Retirement System (SDCERS) today reported a preliminary 16.6 percent investment return (net of fees) for the fiscal year ending June 30, 2014. Assets under management grew by $900 million during the fiscal year.
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Investment officers from the San Diego City Employees' Retirement System (SDCERS) have announced that as of July 2, 2014, assets have surpassed $7 billion for the first time in system history. Learn More...
There is no shortage of news media coverage focused on how public pension funds, in California and across the country, are yielding significant investment returns while simultaneously growing liabilities even faster. Learn More...
The San Diego City Employees’ Retirement System today announced final investment earnings of 13.6% (net of fees) for fiscal year 2013. The total fund policy benchmark was 12.6%. This placed SDCERS’ return in the top 17th percentile of the public funds universe, as measured by the Bank of New York Mellon. Learn More...
GLOBAL – San Diego City Employees' Retirement System is to invest in Europa Capital's value-add fund, in the latest example of US institutions targeting European real estate strategies. Learn More...
San Diego City Employees' Retirement System earned 13.9% net of fees for the year ended Dec. 31, said Elizabeth Crisafi, chief investment officer for the $5.6 billion system, in an e-mail. Learn More...
The San Diego City Employees’ Retirement System reported a 23.8% return on investments for the fiscal year ending June 30, 2011, adding approximately $1 billion to the pension fund and resulting in its strongest performance since 1987. Learn More...
In light of the market decline and volatility of the past few weeks, SDCERS’ Chief Investment Officer Liza Crisafi provided insight to questions regarding the effect on SDCERS’ investment strategy: Learn More...
Good news to report: SDCERS has completed detailed year-end calculations and, based on the unaudited financial statements for the fiscal year ended June 30, 2008. Learn More...
The current turmoil in the global financial markets has impacted SDCERS’ investments just as it has every other institutional and individual investor. Learn More...
Given recent events in the financial market, the SDCERS Board of Administration issued a press release to address concerns and emphasize its long-term investment strategy.
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