# Pension board hears strong Q2 returns as fund approaches $1.1 billion **Published:** 2026-08-12T16:00:00.000Z **Source:** [LFUCG Meeting Archive](https://meetings.lexingtonky.news/meeting/6850) **AI-generated:** yes (claude-haiku-4-5-20251001) **Canonical:** https://feeds.lexingtonky.news/article/pension-board-hears-strong-q2-returns-as-fund-approaches-1-1-billion LEXINGTON, Ky. — The [Police and Fire Pension Fund Board](https://www.lexingtonky.gov/government/departments-programs/police-fire-retirement-fund) met on August 12 to review second-quarter investment performance, hearing from consultants that the fund grew to nearly $1.1 billion in assets as equity markets staged a broad recovery. John Jackson and Jim O'Connor of Callan LLC, the fund's investment advisors, presented quarterly results showing domestic equity and international equity each returning approximately 13 percent during the three-month period ending June 30. Domestic fixed income returned 1.2 percent, while real estate added more than 1 percent to the portfolio's value. The strong performance came as U.S. equities rebounded after weakness in the first quarter. The S&P 500 fell 4 percent in the first quarter before jumping 15.2 percent in the second quarter, Jackson said, erasing earlier losses as oil prices moderated, Middle East tensions eased, and artificial intelligence stocks surged. The technology-heavy growth sector outperformed value stocks, with information technology climbing 32 percent for the quarter. The board's [quarterly meeting](https://meetings.lexingtonky.news/meeting/6850) also reviewed asset allocation adjustments approved last year that increased domestic fixed income targets to 27 percent of the portfolio while reducing international equity exposure to 19 percent. Jackson noted the changes were designed to balance growth with stability amid geopolitical uncertainty. [The fund faces an unfunded liability of $386.6 million](https://lexingtonky.news/2026/06/12/commentary-fifty-one-cents-on-the-dollar/), with a funded ratio of 72.5 percent as of the most recent actuarial valuation, though the board has noted that [investment returns in 2025 exceeded the fund's 7 percent assumed rate of return](https://lexingtonky.news/2026/02/13/lexington-police-fire-pension-fund-tops-1-billion-as-board-reviews-q4-returns-honors-fallen-members/). [Employees contribute 12 percent of their salary, while the LFUCG contributes 47.35 percent of salaries](https://www.lexingtonky.gov/government/departments-programs/police-fire-retirement-fund) to support the fund, which serves sworn members of the Police and Fire divisions. ## Sources - [LFUCG Meeting Archive](https://meetings.lexingtonky.news/meeting/6850) - [Police and Fire Retirement Fund official information page](https://www.lexingtonky.gov/government/departments-programs/police-fire-retirement-fund) - [June 2026 Lexington Times: Pension fund funded ratio and liability analysis](https://lexingtonky.news/2026/06/12/commentary-fifty-one-cents-on-the-dollar/) - [February 2026 Lexington Times: Fund performance and 2025 returns](https://lexingtonky.news/2026/02/13/lexington-police-fire-pension-fund-tops-1-billion-as-board-reviews-q4-returns-honors-fallen-members/) --- This article was generated by AI (claude-haiku-4-5-20251001) based on source material from LFUCG Meeting Archive, enriched with 2 web searches. The original source is available at https://meetings.lexingtonky.news/meeting/6850.