Many U.S. public pension plans are underfunded. LACERS is among them.

As of June 30, 2025, the end of LACERS’ most recent fiscal year-end, LACERS’ investment portfolio had a market value of $25.2 billion. According to a report by Segal presented to the LACERS board on Tuesday, March 24, LACERS has a 80.3% funded ratio on portfolio market value basis.

With simple math, we can calculate a shortfall of approximately $4.96 billion: (1-0.803) x $25.2 billion.

$10,000 represents 0.0002016% of the shortfall.

I use $10,000 because yesterday I heard some board members seriously suggest that finding enough cuts like this in the next budget can meaningfully reduce the $4.96 billion funding gap. That is an overly simplistic and uninformed view. When trustees focus on such small amounts, they’re ignoring the big picture and distracting stakeholders from the real issues.

The LACERS budget for fiscal year 2025-26, proposed to the Board on March 24, 2026, is $54,321,714. This amount represents 1.1% of the shortfall. So even if LACERS’ budget was slashed to zero, it would take ~90 years to make up the nearly $5 billion shortfall. (This is just a back-of-the-envelope calculation. For simplicity, I’m ignoring portfolio growth, liability growth, inflation, or additional contributions from the City.)

Unfortunately, in the setup of a board meeting, there is often little room for intellectually honest discussion of such issues. As at-will hires of public pension plans, CIOs, CEOs, and General Managers often find it difficult to adequately respond to trustee statements (and misstatements) due to career risk. That’s just a fact.

Public pension plans need effective governance that encourages thoughtful discussion. Most boards undergo some kind of regular governance training. Others even engage governance consultants. Such measures do little good, however, without Board members themselves establishing a high standard of conduct and dialogue in the boardroom and holding one another accountable to meet that standard during meetings.

Simply put, public pension plan stakeholders deserve better board governance. It’s up to trustees whether or not to deliver it.

(Note: This post represents my personal views as a City of Los Angeles employee, participant in LACERS’ pension plan, union member, voter for two of the elected seats on the LACERS Board of Trustees, and investment professional with nearly two decades of public and private sector experience.)

Publicly available documents for the 3/25/26 LACERS Board Meeting can be found here.