• The State Board of Administration's (SBA) performance in investing Florida Retirement System assets exceeded its overall investment objective of an 8% return in Fiscal Year 1998-99 as well as for longer periods covering the last 20 years.  The SBA also has allocated system funds to various asset classes as called for in its long-term investment plan.
• SBA could achieve additional earnings, reduce external management fees, and reduce brokerage commissions by increasing the percentage of its domestic equity assets invested by passive style managers.
• Many states successfully use passive style managers to invest a much higher percentage of their domestic equity investments than Florida.  The SBA would have earned an additional $400.2 million after deduction of management fees in Fiscal Year 1998-99 if it had used passive style managers to invest 80% of its domestic equity funds instead of its actual allocation of 59%. The SBA would have increased earnings by $799.4 million after deduction of management fees if it had invested all of its domestic equities with passive style managers during the year.
• The Legislature should require the SBA to report the performance of its active style managers as a group compared to passive style managers.

Which Government Program Summaries contain related information?

State Board of Administration (SBA)
Retirement Benefits Administration

What other OPPAGA-related materials are available?

• Report No. 08-30 Florida Retirement System Pension Plan Fully Funded and Valuation Met Standard, published in April 2008.
• Report No. 07-24 Program Review: Florida Retirement System Pension Plan Fully Funded and Valuation Met Standard, published in April 2007.
• 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. 04-13 Program Review of the Florida Retirement System Pension Plan Fully Funded and Valuation Met Standards, published in February 2004.
• Report No. 03-21 Program Review:  Recommended Florida Retirement System Contribution Rates Remain Reasonable; Asset Growth Has Slowed, published in March 2003.
• 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. 02-20 Program Review: Recommended Florida Retirement System Contribution Rates Are Reasonable, published in March 2002.
• Report No. 00-01 Progress Report: Retirement Program Addresses Backlog, But It Defers Developing Re-Engineering Indicators, published in August 2000.
• Report No. 99-50 Program Review: The Florida Retirement System Continues to Be Fully Funded; Unfunded Liability Eliminated, 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.
• Report No. 97-27 Oversight Report on the State Board of Administration’s 1995-96 Investment Report, published in January 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