Office of Program Policy Analysis and Government Accountability
Office of Program Policy Analysis and Government Accountability

Multi-Year Projections of Retirement System Funding Should Be Provided to the Legislature

Report 04-70, October 2004




Report Summary

  • Benefit payments for Florida Retirement System (FRS) retirees are funded through a combination of employer contributions and returns from investments. The FRS pension plan has matured to the point at which annual benefit payments exceed employer contributions. As a result, the system will have to more heavily rely on investment returns to fund benefit payments in the future.
  • To assist the Legislature in its budget planning and to ensure that the FRS pension plan continues to achieve its goal of having sufficient funds available to cover the payment of benefits to current and future retirees while maximizing investment returns, projections of funding requirements for the next three to five years should be provided to the Legislature by the Florida Retirement System Actuarial Assumption Conference. The State Board of Administration also should better disclose its approach for controlling short-term volatility in investment returns in its FRS Investment Plan.
  • As of June 30, 2004, the SBA's $3.5 billion in alternative investments primarily consist of illiquid assets, and the reported return for these investments are not achieving SBA's investment objective. The SBA should consider whether the returns from these investments are sufficient to compensate for their risks and high management costs.


Related Reports
  1. During Fiscal Years 2016 Through 2018, Major SBA Fund Returns Exceeded Market-Based Investment Benchmarks Over the Long Term
    Report 19-04 March 2019
  2. Over the Long-term, Major SBA Fund Returns Exceeded Market-Based Investment Benchmarks; FRS Pension Fund Multi-Year Performance Similar to Other States.
    Report 16-06 November 2016
  3. FRS Pension Plan Investment Returns Are Similar to Other Public Pension Funds; SBA Continues to Increase Alternative Investments
    Report 15-05 March 2015
  4. Actuarial Review of the July 1, 2013 Actuarial Valuation of the Florida Retirement System
    Report 14-FRS July 2014
Copies of this report in print or alternate accessible format may be obtained by email OPPAGA@oppaga.fl.gov, telephone (850) 488-0021, or mail 111 W. Madison St., Room 312 Tallahassee, FL 32399-1475.
Copies of this report in print or alternate accessible format may be obtained by email OPPAGA@oppaga.fl.gov, telephone (850) 488-0021, or mail 111 W. Madison St., Room 312 Tallahassee, FL 32399-1475.
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