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Pension Fund Loses $46 Billion

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By CATHERINE DOLINSKI

cdolinski@tampatrib.com

Published: December 10, 2008

TALLAHASSEE - Florida's pension fund for state employees has plummeted almost $46 billion over the past year, but the fund's managers say they're staying the course.

The Florida State Retirement System was running a surplus on July 1, the start of the fiscal year, when the fund's assets totaled $126.9 billion. Preliminary estimates show the fund dropped to about $95.7 billion at the end of November.

The fund's managers could not confirm Tuesday whether that means the system still has a surplus, is adequately funded or is running short. The State Board of Administration, which oversees the fund, normally performs that complex analysis once a year, board director Ash Williams said.

Williams appeared before Gov. Charlie Crist and other members of the state Cabinet to announce minor changes to the board's investment plans for the fund. He said they will continue following the same strategies, which financial consultants have endorsed.

One change, Williams said, is to increase holdings in private equities, prompting Crist to warn that with the turmoil on Wall Street, "I would not recommend that we increase our investment in the stock market."

Williams explained that private equities are direct investments in private companies, not stock. Such holdings are less volatile, but also less transparent since they are not sold on the stock exchange.

The state's private equity holdings are hitting a 5 percent limit. Williams wants to raise the limit to 7 percent.

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