Pension Plan Funding Level

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Fiscal Year 2017-18
Target: 100% funded

The San Francisco Employees’ Retirement System (SFERS) administers the City’s pension plan, a cost-sharing multiple-employer defined benefit that is funded through employee and employer contributions and investment earnings.

The general financial health of retirement systems can be measured in many ways, but the most basic is through comparison of a given plan’s liabilities versus its assets, expressed as a percentage funding level. For pension plans, this measurement is conducted using both a market value of the system’s assets and an actuarial value. Both of those figures are shown in the chart below, but performance for this measure is based on the Actuarial Value of the plan's assets.


How San Francisco is Performing

San Francisco's SFERS pension plan was 87.3% funded as of July 1, 2018, based on the actuarial value of the plan's assets. That ratio is up slightly from July 1, 2017, when the SFERS plan was 86.3% funded.

SFERS’ Unfunded Actuarial Liability (UAL) decreased by approximately $51 million. The actuarial value of SFERS assets totaled $23.866 billion as of July 1, 2018, an increase of $1.68 billion (7.6 percent) over the previous year. This increase reflected smoothed investment returns and contributions offset by benefits and expenses paid during the year. Total pension benefit obligations were $27.335 billion, an increase of $1.63 billion (6.3 percent) over the previous year, including a $200 million increase as a result of the 2018 Supplemental COLA.

This change also includes a $300 million increase in obligations from when the Board of Supervisors approved reducing the discount rate from 7.5% to 7.4% in November 2018. The discount rate refers to the level at which future pension obligations are discounted to their present value. A higher discount rate reduces the reported benefit obligation, while a lower discount rate raises the obligation. This change in the discount rate increased employer contributions by 1.0%.

How Performance is Measured

SFERS conducts an annual actuarial valuation of its assets and liabilities in order to assess the funded status of the system and to determine appropriate levels of City contributions to the fund for the next fiscal year. These reports are available on the SFERS website.

When a benefits plan is 100% funded, the value of its liabilities are equal to the value of its assets. When a plan is less than 100% funded, the value of it's liabilites are more than the value of its assets

The SFERS percent-funded ratio can be calculated based on either the actuarial value or market value of the plan's assets, divided by the actuarial liability of the plan. Both of these values are included here, but performance for this measure is based on the actuarial value of assets.

Formula calculating the SFERS funding ratio based on the actuarial value of its assets

Formula calculating the SFERS funding ratio based on the market value of its assets

Additional Information


Please click first on the chart above and then click the “Download” button in the bottom right corner of the visualization to view and download the data displayed in the chart.