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Office of Program Policy Analysis and Government Accountability

Multi-Year Projections of Retirement System Funding Should Be Provided to the Legislature, Report No. 04-70, October 2004
 
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  • 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.

Which Government Program Summaries contain related information?

Dept. of Management Services (DMS)
Fire Marshal (DFS)
State Board of Administration (SBA)
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. 14-FRS Actuarial Review of the July 1, 2013 Actuarial Valuation of the Florida Retirement System,published in July 2014.
  • Report No. 14-99 Actuarial Review of the July 1, 2013 Actuarial Valuation of the Florida Retirement System,published in July 2014.
  • Report No. 13-FRS Actuarial Review of the July 1, 2012 Actuarial Valuation of the Florida Retirement System,published in August 2013.
  • Report No. 13-99 Actuarial Review of the July 1, 2012 Actuarial Valuation of the Florida Retirement System,published in August 2013.
  • 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. 12-09 Florida Retirement System Pension Plan Valuation Met Standards,published in July 2012.
  • Report No. 11-17 Florida Retirement System Pension Plan Valuation Met Standards,published in May 2011.
  • 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. 02-37 Program Review: While State Board of Administration Investments Perform Relatively Well, the SBA Should Reassess Planned Expansion of Alternative Investments, published in June 2002.
  • 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.

Copies of this report in print or alternate accessible format may be obtained by telephone (850/488-0021), by FAX (850/487-9213), in person, or by mail (OPPAGA Report Production, Claude Pepper Building, Room 312, 111 W. Madison St., Tallahassee, FL 32399-1475).
e-mail address: oppaga@oppaga.fl.gov


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