Management Audit Report of the Los Angeles City Employees’ Retirement System
2022 City of Los Angeles
Los Angeles City Charter requires a management audit of the business and property of each of the City’s pension and retirement systems by an independent auditing firm once every five years.
This report, directed by joint administrators Controller Ron Galperin, Mayor Eric Garcetti and City Council, examines whether the Los Angeles City Employees’ Retirement System (LACERS) is operating in the most efficient and economical manner. The audit also evaluates the allocation of assets for the system.
Overall, the audit found that the management practices, policies and procedures of LACERS have comported with other comparable public pension funds. The audit also concluded that LACERS demonstrated appropriate long-term strategic and financial planning, and generally positive financial operational policies and practices. However, the audit showed that there are still opportunities for improvement, both in the management of the funds and the investments, and makes recommendations to address key issues faced by LACERS.
July 20, 2022
Honorable Members of the Los Angeles City Council
Los Angeles City Employees’ Retirement System Board of Administration
Re: Management Audit Report of the Los Angeles City Employees’ Retirement System
As required under City Charter Section 1112, the Los Angeles City Controller, the Office of the Mayor and the Los Angeles City Council regularly conduct a management audit of this pension and retirement system by an independent qualified management auditing firm. The audit examines whether the system is operating in the most efficient and economical manner and evaluates its asset allocation.
Representatives from the Mayor’s Office, City Council and Controller’s Office (Joint Administrators) identified several audit objectives to be addressed in the current management audit. The attached “Management Audit Report of the Los Angeles City Employees’ Retirement System” is the firm’s final report addressing the audit objectives, which cover the following areas:
- Performance of the Los Angeles City Employees’ Retirement System’s (LACERS) investments and asset allocation;
- Adequacy and reasonableness of LACERS administrative expenses;
- Reasonableness of actuarial methods and validity of assumptions;
- Adherence to sound management policies and leading best practices;
- Governance and fiduciary responsibilities; and
- Assessment of the implementation status of the prior audit recommendations.
Attached to the final report is a response from LACERS, which indicates they are in general agreement with the recommendations.
If you have any questions about the report, please contact Devang Panchal, Director of Auditing, at (213) 978-7388 or at devang.panchal@lacity.org.
Sincerely,
RON GALPERIN
L.A. Controller
ERIC GARCETTI
L.A. Mayor
NURY MARTINEZ
L.A. City Council President
Enclosure
cc: Honorable Michael Feuer, City Attorney
Andre Herndon, Chief of Staff, Office of the Mayor
Neil M. Guglielmo, General Manager, LACERS
Matthew W. Szabo, City Administrative Officer
Holly L. Wolcott, City Clerk
Sharon Tso, Chief Legislative Analyst
Independent City Auditors