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State Pension Fund Loses 5 Billion Dollars in Stock Value

September 18th, 2008 by flanews

The Florida Retirement Fund lost five (b) billion dollars in value since Friday as US stocks continue to plummet. The state treasury also lost millions in write downs when Lehman Brothers declared bankruptcy. As Whitney Ray tells us, the losses are just a small portion of the states 140 (b) billion dollar investment pool.

Hear it Here: State Pension Fund Loses 5 Billion Dollars in Stock Value

The worst stock market dive since 9/11 has resulted in a 5 (b) billion dollar loss in value for the states 120 (b) billion dollar pension fund. The State Board of Administration says the fund is set up to weather such a Wall Street storm.

When looking at a diverse plan like ours you build in periods of downturns in the market and periods of up turns in the market, but your object is a long term stable conservatively managed fund and thats exactly what we have, said SBA Spokesman Dennis McKee.

The states checking and savings account took a blow too. Lehman Brothers bankruptcy could cost the state 140 (m) million dollars. State finance managers say the losses will have a small impact on state coffers.

CFO Sink says the state treasury will gain on its investments despite the news from Wall Street.

Last year the state earned a billion dollars from its investments. The state treasurys 24 (b) billion dollar investment pool is put into bonds, not stocks. CFO Alex Sink says the failing stock market could make bonds more attractive and spawn bigger returns.

Some of these safer instruments were invested in are going to be valued higher because theres more demand, its called the flight to quality, said Sink.

A state policy limits investments in any one company to 2 and a half percent of its total investment funds. The states pension fund has 6 (b) billion dollars set aside for extreme losses.

Posted in State Budget, State News | 4 Comments »

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