The Florida Legislature
Office of Program Policy Analysis and Government Accountability
While State Board of Administration Investments Perform Relatively Well, the SBA Should Reassess Planned Expansion of Alternative Investments, Report No. 02-37, June 2002
Full report in PDF format
- The Florida State Board of Administration’s (SBA) overall performance in investing Florida Retirement System assets exceeded its objective over long-term periods covering the last 20 years. However, it did not meet its investment objective in Fiscal Year 2000‑01, primarily as a result of declines in the domestic and international stock markets. Its allocation of assets to various asset classes was within the ranges established in its long-term investment plan.
- The investment returns for most of the SBA’s asset classes (domestic and international equities, fixed income, cash equivalents) exceeded or were close to their performance benchmarks. However, the alternative investment asset class, which consists of private equity portfolios and a venture capital portfolio, significantly under-performed its benchmark. Due to concerns regarding lower than expected performance and high management costs, the SBA should reassess its plan to expand the use of alternative investments in the future.
- The SBA experienced a realized loss of $281 million due to investments in Enron stock by one external active style domestic equity investment manager, Alliance Capital. It recently selected law firms to represent it in litigation against this company. The Florida Attorney General’s Office is also investigating Alliance Capital and its investment decisions relating to investing in Enron stock. It is OPPAGA’s general policy to not directly comment on or make recommendations regarding matters that are subject to civil litigation or active criminal investigations. However, we will report on the outcome of these actions in future reports.
Which Government Program Summaries contain related information?
Retirement Benefits Administration
What other OPPAGA-related materials are available?
- Report No. 16-06 Over the Long-term, Major SBA Fund Returns Exceeded Market-Based Investment Benchmarks; FRS Pension Fund Multi-Year Performance Similar to Other States.,published in November 2016.
- Report No. 15-05 FRS Pension Plan Investment Returns Are Similar to Other Public Pension Funds; SBA Continues to Increase Alternative Investments,published in March 2015.
- Report No. 13-05 FRS Pension Plan Investment Returns Are Similar to Those of Other States; SBA Is Increasing Alternative Investments,published in February 2013.
- Report No. 11-10 Compared to Other States, the Pension Plan Is Better Funded, Incurs Lower Investment Fees, and Has Fewer Trustees; Investment Returns Are Average,published in February 2011.
- Report No. 10-46 Florida Retirement System Pension Plan Valuation Met Standards,published in June 2010.
- Report No. 09-24 Florida Retirement System Pension Plan Valuation Met Standards,published in April 2009.
- Report No. 09-16 Retirement Fund Investments Decline with the Economy But Still Meet Several Performance Benchmarks; SBA Must Improve Communication with Its Stakeholders,published in March 2009.
- Report No. 08-72 Economically Targeted Investment Program Under Development,published in December 2008
- Report No. 06-68 Progress Report: Use of Investment Returns Has Increased; Plan for Addressing Associated Risks Should Be Documented, published in November 2006.
- Report No. 04-70 OPPAGA Report: Multi-Year Projections of Retirement System Funding Should Be Provided to the Legislature, published in October 2004.
- Report No. 99-52 Program Review: Investment of Florida Retirement System Assets Meets Goals, But Earnings Could Be Increased, published in May 2000.
- Report No. 98-10 Oversight Report on the State Board of Administration's 1996-97 Investment Report, published in August 1998.
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