Fiscal year 2004 brought new challenges, positive capital markets and increased media coverage to the public pension fund community. After experiencing the declining markets of 2001 and 2002, it is not surprising that public focus on pension funds has taken place. It is unfortunate, however, that this broad brush of coverage by the media paints everyone in the same light. While there are other pension funds that are in financial distress, your San Antonio Fire and Police Pension Fund is in good shape.

Last year was a very busy year for the Fund. The Board met twelve times during the year, the Investment Committee met twenty-six times, the Legislative Committee met seven times, the Personnel Committee met four times, and the Disability Committee met three times. From those committee meetings, the Board received recommendations for ways to improve the Fund, be it through new policies, new investment strategies, or enhanced benefit changes. Here are some of the improvements made to the Pension Fund last year.

•   Approved a death audit policy to identify recently deceased members prior to issuing their monthly check.
•   Amended the Ethics Policy in regards to political contributions in order to eliminate the appearance of possible conflicts of interest.
•   Approved a $50 million emerging manager program to identify smaller investment management firms in their early stages.
•   Committed an additional $100 million to real estate for diversification purposes.
•   Approved a capital improvements budget for the Blanco North Shopping Center, one of the real estate assets owned by the Fund.
•   Approved a 5% allocation to a Hedge Fund of Funds in order to decrease the overall equity exposure of the Fund.
•   Negotiated a legislative package that benefits both active and retired members, while also ensuring the continued financial health of the Pension Fund.

  I hope this gives you an idea of the work that your Board of Trustees and staff does on a regular basis for the benefit of fire fighters and police officers – past, present and future.

  On behalf of all the staff, I would like to thank the Board and the membership for their strong support during the past year, and we look forward to serving you in the years ahead.