Florida’s Pension Posts $14 Billion Investment Loss in Fiscal 2022

The Florida Retirement System Pension Plan reported a 6.7%, or $14.24 billion, investment loss for the fiscal year ended June 30, well off both its benchmark’s return of 13.42% and its assumed rate of return of 6.7%. It is also a huge swing from the previous year, when the portfolio returned 29.46%. [Source]

According to the most recent annual comprehensive financial report from the State Board of Administration of Florida, which manages the Florida Retirement System’s assets, the FRS Pension Plan’s overall financial position decreased 10.8% to $180.2 billion in fiscal 2022, down from $202.08 billion at the end of fiscal 2021.

The pension fund reported 3-, 5-, 10- and 15-year annualized returns of 7.74%, 7.68%, 8.59% and 6.20%, respectively. The pension’s investment performance lagged behind its benchmark over every time period except the past 10 years. Over the same time periods. the benchmark’s annualized returns were 9.17%, 8.14%, 7.26% and 7.19%, respectively.

The investment losses also helped lower the pension plan’s funded ratio for the year to 82.9%, as of July 1, 2022, which is the latest actuarial valuation, from 96.4% at the end of fiscal 2021.

As of the end of fiscal 2022, the portfolio’s asset allocation was 48.4% in global equity, 17.7% in fixed income, 11.3% in real estate, 11.2% in strategic investments, 10.2% in private equity and 1.3% in cash equivalents.

Compared to one year earlier, the pension plan reduced its global equity asset allocation by nearly five percentage points from 55.2% at the end of fiscal 2021, while increasing its allocations to alternative assets such as real estate, private equity, and strategic investments by 2, 2.7 and 2.2 percentage points, respectively. [Source]