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.