b"LOS ANGELES FIRE AND POLICE PENSION SYSTEM MANAGEMENTS DISCUSSION AND ANALYSIS (Unaudited)Pension Plan (Continued)Changes in Fiduciary Net Position (Continued)Net investment income amounted to $3.12 billion, an increase in net investment income of $563.02 million, or 22.0%, when compared with $2.56 billion from fiscal year 2024. Investment income increased in fiscal year 2025 due to the net appreciation in the fair value of investments in fiscal year 2025 relative to fiscal year 2024.Deductions from Fiduciary Net PositionCosts associated with the Pension Plan include benefit payments to members, refunds of contributions due to termination and member death, and administrative expenses.Deductions for the fiscal year ended June 30, 2025, totaled $1.42 billion, a decrease of $64.58 million, or 4.3%, over fiscal year 2024. The decrease was due primarily to a substantial decrease in DROP distributions paid to members.Restatement of Beginning of Net Position Effective July 1, 2024, the System adopted GASB Statement No. 101, Compensated Absences. This new accounting standard requires the recognition of compensated absences liabilities, such as vacation and sick leave, when the leave is earned and expected to be used. Implementation of the new standard resulted in a restatement of $4.13 million of the beginning net position of the Pension Plan .The System applied the standard prospectively, as historical payroll and personal data were not readily available due to the City's transition from the legacy PAYSR system to the Workday platform. (See Note 14 for further disclosure.)8SECTION 2FINANCIALS 23"