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Office of Program Policy Analysis and Government Accountability

Retirement Fund Investments Decline with the Economy But Still Meet Several Performance Benchmarks; SBA Must Improve Communication with Its Stakeholders, Report No. 09-16, March 2009
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Nationwide, pension plan investment returns are falling, and Florida Retirement System (FRS) investment returns are consistent with this trend. Short-term losses will likely continue until the economy rebounds. However, in the context of the global economic downturn, the State Board of Administration’s investment results have generally outperformed other public and private institutional pension funds. While both the pension and investment plans lost more than 4% of their value in Fiscal Year 2007-08, the most recent FRS actuarial valuation shows the pension plan was sufficiently funded to pay plan participant benefits.

Although the board has several procedures in place to help ensure appropriate oversight of FRS funds, independent consultants report that these procedures need to be strengthened. In particular, the board has lacked an independent compliance function and needs better internal controls that segregate its management and oversight functions. The board is working to correct these deficiencies. In addition, the board needs to improve its accountability to stakeholders through better communication of its investment results, activities, costs, and the pension plan’s future funding needs.

What were our earlier findings?

Report No. 06-68 Progress Report: Use of Investment Returns Has Increased; Plan for Addressing Associated Risks Should Be Documented,published in November 2006.

Which Government Program Summaries contain related information?

State Board of Administration of Florida
Retirement Benefits Administration

What other OPPAGA-related materials are available?

  • Report No. 10-19 Florida Retirement System Funds and Investment Returns Declined with the Economy; the SBA Reports That Its Investment Strategy Is Designed to Withstand Losses,published in February 2010.
  • Report No. 10-15 Several Options Are Available for Modifying the Florida Retirement System’s Class Structure to Reduce System Costs,published in January 2010.
  • Report No. 08-72 Economically Targeted Investment Program Under Development,published in December 2008.
  • Report No. 04-70 Multi-Year Projections of Retirement System Funding Should Be Provided to the Legislature,published in October 2004.
  • Report No. 02-37 While State Board of Administration Investments Perform Relatively Well, the SBA Should Reassess Planned Expansion of Alternative Investments,published in June 2002.

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).
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