Report says the Pension Fund of the State of Florida has recovered from the recession

Staff of times
In print: Thursday 18 November 2010

TALLAHASSEE — Board of Governors of Florida said Wednesday that it beat investment goals last year, with its giant Vanguard Fund Board.

Bounce from the recession, the pension fund gained 9.8 billion dollars after payment of benefits and was worth 109.3 billion in the year ended in June 2010.

Before benefits, pension fund gain was 14.03% — well before its objective of earnings, the SBA said in its annual report released Wednesday.

"SBA has a history of producing cumulatively required returns from birth of the Fund," said Ashbel c. Williams Jr., SBA's Executive Director and Chief Investment Officer. "Over the past 22 years, over 66 percent of the pension plan benefit payments were financed by investment earnings, not by taxpayers."

Return on investment of SBA came under fire during the recent election season. Elected Governor Republican Rick Scott has accused his rival Democrat, Chief Financial Officer Alex Sink, poor oversight of SBA, which is governed by a Board of three members, including the Governor, the CFO and the Attorney General.

Risky investment practices of SBA came under scrutiny after a estate of Manhattan address the Fund's costs amounting to $ 266 million. The St. Petersburg Times also documented that the sectoral pension fund hefty hushed on commissions going to intermediaries. The pension paid $ 180 million in taxes as part of a long private equity deal, but got little in return. In addition, the SBA had to face a debacle of investment involving billion of mortgage-backed securities that have plummeted in value.

Despite recent investment earnings, Florida pension system, the fourth-largest in the United States, can afford yet to cover only 87.9 percent of its obligation to benefit current and future pensioners of 1 million.

SBA said that Florida is doing better than most State pension funds. "By 30 June 2010, the value of the Pension Fund has grown an additional $ 9 billion to over 118 billion, after approximately 1.5 billion paid to pensioners," Williams said.

[Last modified: November 17, 2010 09: 44 PM]

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