Subject: Oakland PFRS’s Investment Portfolio As Of September 30, 2025 From: Finance Department Recommendation: Receive An Informational Report On The Oakland Police And Fire Retirement System’s (“PFRS”, Or “System”) Investment Portfolio As Of September 30, 2025

This is an informational report on the Oakland Police and Fire Retirement System's (PFRS) investment portfolio as of September 30, 2025. The PFRS is a closed defined benefit plan for sworn police and fire employees hired before July 1, 1976, currently serving 585 retired members with no active members. The total portfolio value reached $498.07 million, increasing by $24.4 million in the last quarter after benefit payments. As of July 1, 2024, the system has an Unfunded Actuarial Liability of approximately $58.4 million and a Funded Ratio of 88.3 percent, with the City of Oakland contributing $27.516 million for FY 2025/2026. For the quarter ending September 30, 2025, the PFRS Total Portfolio generated a 4.8 percent return (gross of fees), outperforming its policy benchmark by 0.5 percent. It also outperformed its benchmark over the one-year and five-year periods but underperformed over the three-year period. Two investment managers, EARNEST Partners (Domestic Equity) and Versor Trend Following (Crisis Risk Offset), are under monitoring for underperformance or organizational concerns. The PFRS Board also supports local economic development through a Local Broker provision and environmental sustainability by prohibiting investments in companies deriving 50 percent or more revenue from thermal coal mining.

This report provides transparency on the financial health of the pension system for former police and fire personnel, which the city supports with $27.516 million annually. The system's performance and unfunded liability directly affect the city's long-term financial obligations and the security of retiree benefits. It also highlights the city's commitment to local economic support and environmental divestment policies through its pension investments.

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