Here's some News You Can Use from our Penson Fund

October 14, 2008

To: Members of the San Antonio

Fire & Police Pension Fund

Due to the recent turmoil in the stock market,

I thought it would be a good idea to give you an

update on the Pension Fund.

Our fiscal year, which ended September 30^th,

had an estimated investment return of -12%.

As a comparison, the S&P 500 was down over

21% for the same period. To give you a little

historical perspective, in the last ten years,

your Pension Fund has had negative returns

three times.

My point is: it is neither unusual, nor unexpected,

for us to generate negative investment returns.

October has started off as a challenge, but we
expect further action by our government to

stabilize credit markets and Wall Street. I

am particularly encouraged by the efforts to

design a global response to this challenge.

But how is the health of the Pension Fund?

Compared to other funds statewide,

your Fund is very strong. We are also stronger

than we were on October 1, 2005. So if you

were sleeping well in 2005, knowing the

Pension Fund was healthy, you should be

sleeping well today. The stock market never

goes up forever, nor does it go down forever.

The previous five years were the best this

Fund has ever seen, averaging almost 14%.

A correction was due. Unfortunately, no one

knew when it was coming, or when it will end.

It WILL end, though.

So, what does all of this mean to you,

the member? For retirees, you will continue

to receive your monthly payment, but

unfortunately, you will not be receiving a

13^th Check.

For active members, it may result in the

2009 Legislative Package being placed on

hold until 2011. The Board will make a

final decision on the package in late December,

depending on the state of the economy

at that time.

Let me close by reassuring each of you

that the Board and Staff are actively

monitoring this situation. We are not making

knee-jerk investment decisions. We will

weather this storm like every other one in

our history. The good news is that we

entered this storm in the best shape

the Pension Fund has ever been.

As always, if you have any questions or

concerns, please do not hesitate to call

me at 210-534-3262 or email me

at wschott@safireandpolicepension.org.

Sincerely,

Warren Schott, CFA
Executive Director/Chief Investment Officer

Fire & Police Pension Fund