b'MANAGEMENTS DISCUSSION AND ANALYSISLOS ANGELES FIRE AND POLICE PENSION SYSTEM MANAGEMENTS DISCUSSION AND ANALYSIS (Unaudited) This Managements Discussion and Analysis (MD&A) of the financial activities of the Los Angeles Fire and Police Pension System (the System or LAFPP) is an overview of its fiscal operations for the year ended June 30, 2025. Readers are encouraged to consider the information presented here in conjunction with the Financial Statements and the Notes to the Financial Statements. Amounts contained in this discussion have been rounded to facilitate readability. FINANCIAL HIGHLIGHTSNet position at the close of the fiscal year ended June 30, 2025, was $30.50 billion and $3.62billion for the Pension Plan and Health Subsidy Plan, respectively. All of the net position wasavailable to meet the Systems obligations to members and their beneficiaries. Net position increased by $2.35 billion, or 8.3%, and increased by $363.55 million, or 11.2%, forthe Pension Plan and Health Subsidy Plan, respectively. As of June 30, 2025, the date of the most recent funding actuarial valuations, the funded ratios ofthe Pension Plan and Health Subsidy Plan were 100.5% and 78.1%, respectively. Additions to the Pension Plans net position increased by $575.97 million or 18.0% from $3.20billion to $3.78 billion, due primarily to the net appreciation in the fair value of investments infiscal year 2025 relative to fiscal year 2024. Deductions from the Pension Plans net position decreased by $64.58 million, or 4.3%, over fiscalyear 2024 from $1.49 billion to $1.42 billion in fiscal year 2025. Additions to the Health Subsidy Plans net position increased by $90.11 million, or 19.93%, from$452.07 million to $542.17 million, due to the net appreciation in the fair value of investmentsin fiscal year 2025 relative to fiscal year 2024. Effective July 1, 2022, employer contributionsand other funding of the Health Subsidy Plan are accepted into the newly established 115 Trustfund. Deductions from the Health Subsidy Plans net position increased by $11.58 million, or 6.9%,over fiscal year 2024 from $167.04 million to $178.62 million in fiscal year 2025. The total pension liability for the Pension Plan at June 30, 2025, was $29.12 billion, and thefiduciary net position was $ 30.50 billion. Thus, the net surplus for the Pension Plan was $1.38billion, and the fiduciary net position as a percentage of the total pension liability was 104.74%. The total Other Post-Employment Benefits (OPEB) liability for the Health Subsidy Plan at June30, 2025, was $4.40 billion, and the fiduciary net position was $3.62 billion. Thus, the net OPEBliability for the Health Subsidy Plan was $782.98 million, and the fiduciary net position as apercentage of the total OPEB liability was 82.20%.4 SECTION 2FINANCIALS 19'