LOS ANGELES (CNS) — Los Angeles’ two public pension funds for city employees are demonstrating good financial practices, but could show improvement amid uncertainty brought on by high inflation, according to two reports released Wednesday.

The audits, conducted by the firm of Aon Investments USA Inc., looked at the Los Angeles City Employees’ Retirement System and the Los Angeles Fire and Police Pensions System between 2013 and Sept. 2021. They found room for improvement in both management of the funds and investments, in addition to recent concerns over the impact of inflation.

Recommendations in the reports included ensuring that the rate of return — which is 7% per year — was based on accurate assumptions of market conditions, conducting more analysis of active versus passive management and looking at whether the funds should have greater autonomy from the city over choosing their own general managers and legal counsel.

“Ensuring that Los Angeles can meet current and future pension obligations is critical to safeguarding the well-being of the city and its employees,” Controller Ron Galperin said in a statement.

“These audits present the city with important opportunities to shore up future returns and insulate its retirement systems from potential economic downturns. As we grapple with renewed uncertainty as a result of high inflation, it is more important than ever to provide taxpayers and city workers with as much insight as possible into the status of these public pensions.”

The audits found that the management practices of the two funds were comparable to those of other public pension funds, along with demonstrating “appropriate” long-term strategic and financial planning.

The audits were released jointly by Galperin, Mayor Eric Garcetti and the Los Angeles City Council on Wednesday. The City Charter requires an audit of the pension funds at least once every five years.

The Los Angeles City Employees’ Retirement System covers approximately 47,200 active and retired civilian employees. It paid $1.2 billion to 22,000 retirees and beneficiaries during the last fiscal year, with a portfolio valued at $22.2 billion.

The Los Angeles Fire and Police Pensions System, which serves approximately 26,000 active and retired public safety employees, had a worth approximately $30.8 billion as of the last fiscal year. It gave out a monthly benefit amount of $6,521 per retiree in 2021.

The complete Los Angeles City Employees’ Retirement System audit can be viewed at: https://bit.ly/3aR8KH8. The complete Los Angeles Fire and Police Pensions System audit can be viewed at: https://bit.ly/3B1x57N.