b'LOS ANGELES FIRE AND POLICE PENSION SYSTEM NOTES TO FINANCIAL STATEMENTS JUNE 30, 2025 AND 2024NOTE 5NET PENSION LIABILITY (Continued)Investment Return Rate (Continued)inflation, subtracting expected investment management expenses (investment consulting fees, custodian fees and other miscellaneous investment expenses) and further adjusted by a risk margin. Beginning with June 30, 2023, this portfolio return is further adjusted to an expected geometric real rate of return for the portfolio. The target allocation and projected arithmetic real rates of return for each major asset class, after deducting inflation and applicable investment management expenses, are shown in the following table.These values were used in the derivation of the long-term expected investment rate of return assumption for June 30, 2025and2024.Thisinformationmaychangeeverythreeyearsbasedontheresultsofanactuarial experience study. Target Allocation Long Term Expected RealPercentage Rate of ReturnAsset Class 2025 2024 2025 2024Large Cap U.S. Equity 23.00% 23.00% 6.00% 6.00%Small Cap U.S. Equity 6.00% 6.00% 6.65% 6.65%Developed International Equity 16.00% 16.00% 7.01% 7.01%Emerging Markets Equity 5.00% 5.00% 8.80% 8.80%U.S. Core Fixed Income 9.90% 9.90% 1.97% 1.97%High Yield Bonds 2.75% 2.75% 4.63% 4.63%Global Credit 2.75% 2.75% 0.89% 0.89%Real Estate 7.00% 7.00% 3.86% 3.86%Treasury Inflation Protected Securities (TIPS) 4.40% 4.40% 1.77% 1.77%Commodities 1.00% 1.00% 4.21% 4.21%Cash 1.00% 1.00% 0.63% 0.63%Private Credit 2.00% 2.00% 6.48% 6.48%Unconstrained Fixed Income 2.20% 2.20% 2.50% 2.50%Private Equity 14.00% 14.00% 9.84% 9.84%Real Estate Investment Trusts (REITS) 3.00% 3.00% 5.25% 5.25%Total Portfolio 100.00% 100.00% 5.80% 5.80% Discount RateThe discount rate used to measure the TPL was 7.00% as of June 30, 2025 and June 30, 2024. The projection of cash flows used to determine the discount rate assumed plan member contributions will be made at the current contribution rates for each tier and that employer contributions will be made at rates equal to the actuarially determined contribution rates for each tier. Projected employer contributions that are intended to fund the service costs for future plan members and their beneficiaries, as well as projected contributions from future plan members, are not included. Based on those assumptions, the Pension Plans fiduciary net position was projected to be available to make all projected future benefit payments for current plan members. Therefore, the long-term expected rate of return on Pension Plan investments was applied to all periods of projected benefit payments to determine the TPL as of June 30, 2025 and 2024.30SECTION 2FINANCIALS 45'