« DCF head asks to spend money to beef up child protection program | Main | RPOF v. FOX over Gary Johnson (in presidential debate, not straw poll) »

Florida's pension plan drops $12B in three months amid global debt crisis

Florida's pension fund fell to $116.9 billion after a dismal August stretch, a drop of about $12 billion from the second quarter ending June 30.

"August was a miserable month, one of the worst months in recent memory," said Ash Williams, State Board of Administration executive director, on Tuesday.

The update came during a quarterly meeting of the State Board of Administration, of which Gov. Rick Scott, Attorney General Pam Bondi and Chief Financial Officer Jeff Atwater are trustees. (In the meeting, Williams gave an older pension-fund estimate of $118.7 billion.  It took a big hit on Monday, the most recent figure provided.)

Things really got off on the wrong track in the first week of August, when the pension fell $10 billion in a week following the country's S&P credit downgrade. We told you about it here. SBA spokesman Dennis MacKee then cautioned Floridians to remember the pension was as low as $83 billion in March 2009.

Now the fund is down about $7 billion since Dec. 31, when it was $124.2 billion. The persistent global debt crisis continues to take the blame.

"People talk about the debt crisis in Europe," Williams told the trustees. "Keep in mind we haven't resolved the debt issues in this country either."

Another factor is that the public sector is lagging behind the private sector's recovery. Private businesses have largely been through the "reorganization phase" wrought by the recession, he said.

The pension plan represents about 81 percent of SBA investments. As of Monday, SBA funds totaled $144.3 billion.

Scott asked Williams how state employees are apprised of pension information. The State Board of Administration provides monthly and quarterly reports to the trustees, Williams said, that can be found on its website.

Scott, a first-time politician, wanted to know if senior SBA staffers had similar limitations as lobbyists as to what kind of business they could do with SBA vendors. It's actually more strict, Williams said, as staffers cannot work for any vendors for the two years following their exits.

A funny moment came when Scott asked Judy Goodman, a member of the SBA audit committee, if anything kept her up at night.

"The truth?" she said, "What kind of questions I'm going to get up here and if I can answer them."

Scott couldn't blame her. "It happens to me with all these gaggles I do," he said, referring to typically brief, ask-anything sessions with reporters.

Comments

Feed You can follow this conversation by subscribing to the comment feed for this post.

AntiTallahassee

How much would have been lost if the fund was simply indexed? Less than 12 billion I bet. The SBA people are not worth all their fees.

Thomas H Springfield

The most interesting fact to know is how much of the $12 Billion decline over the last 90 days was the result of many terminated state employees and DROP employees deciding to retire and withdrawing all or substantially all of their huge balances in the FRS Investment Fund. Many state employees are nervous and unsure about Florida's new administration knowing what it is doing; many others are afraid Gov. Scott might try to force the Fund administrators to make some some stupid investment decisions that Scott thinks are "good deals" or whatever.

The comments to this entry are closed.