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.

Program Review: Florida Retirement System Pension Plan Fully Funded and Valuation Met Standard
Report 08-30 April 2008
Florida Retirement System Pension Plan Fully Funded and Valuation Met Standard
Report 07-24 April 2007
Use of Investment Returns Has Increased; Plan for Addressing Associated Risks Should Be Documented
Report 06-68 November 2006
Multi-Year Projections of Retirement System Funding Should Be Provided to the Legislature
Report 04-70 October 2004

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.