LACERS Investment Performance Exceeds Benchmarks

LACERS investment strategies have proven to be successful. LACERS considers an 8% assumed rate to be the benchmark for growing the portfolio. At the end of fiscal year 2006-07 LACERS rate of return was 19.5%, surpassing the benchmark by more than 11 percentage points.

LACERS portfolio performance is largely attributed to a diversified asset allocation strategy. Overall, LACERS was one of the few public retirement systems in the nation to grow by $1.8 billion.

As of 12/31/2007, LACERS portfolio was $11.4 billion. When compared to all public retirement funds valued at more than $1 billion, LACERS was ranked:

	1-year period - top 11th percentile (better than 89% of pension funds)
	3-year period - top 16th percentile (better than 84% of pension funds)
	5-year period - top 9th percentile (better than 91% of pension funds)

A recent cost effectiveness analysis of LACERS fund for 2002-2007 performed by Cost Effective Measurement, Inc. found that our 5-year policy return was higher and our 5-year implementation risk was lower than the U.S. median as shown below.

	5-year Implementation Risk 0.7%
	U.S. median 1.3%
	Peer median 1.3%

The report also showed that the costs associated with contracting external investment managers are classified as "low" and the higher returns outweighed these costs. For 2007, LACERS actual cost was 41.8 basis points, far below the benchmark cost of 49.0 basis points.