Report: Florida SBA moved state pension money into higher risk investments

view original post

WILTON MANORS, FLA. (WSVN) – The Florida State Board of Administration is reportedly making a money move considered risky. It hopes it will pay off for some retirees collecting a pension.

Over the past few months, Florida Gov. Ron DeSantis has crossed the state, signing into law several bills passed by the state Legislature, making stops around the country and even abroad in anticipation of what could be an imminent presidential run.

However, with the attempt to raise his national profile comes new scrutiny.

The investigative journalism site The Lever, which identifies itself as an outlet focusing on money in politics, reported that the SBA, which is the DeSantis administration’s pension board, moved state pension money into higher risk investments. These are the pensions earmarked for employees such as firefighters and teachers.

“They’re high fee. They have very little transparency,” said Matthew Cunningham-Cook with The Lever, “and some of those private equity and hedge fund managers have supported the Republican Governors Association, which pumped over $21 million into Friends of Ron DeSantis, this political committee closely associated with the governor.”

This has led to “significant losses” for the pension, Cunningham-Cook said.

“Ten billion dollars in losses, relative to a plain vanilla index fund of stocks and bonds,” he said.

That so-called “plain vanilla” strategy is championed by Investors such as Warren Buffett.

But DeSantis said this is not the case.

“We’ve not done that, at least I haven’t, as the SBA,” he said.

What the governor said he has done is sign a law banning the investment of public money into funds that promote environmental, social or governance goals, also known as ESG.

“Really, it’s just a veneer to use pension assets to do politics, and they’re pursuing a certain agenda,” said DeSantis. “We’ve had moving assets out of places like BlackRock, we did $2 billion out of BlackRock which is an activist asset manager, into other areas.”

The Lever said other governors have made similar money moves, but a bill passed in Tallahassee this year would allow even more pension money to go into those higher risk — and some argue — politically connected funds.

“It’s definitely a long enduring problem. The only difference now is the size of the portfolio,” said Cunningham-Cook. “It’s just the magnitude of it.”

The bill passed by the Florida Legislature is currently awaiting the governor’s signature.

Copyright 2023 Sunbeam Television Corp. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Join our Newsletter for the latest news right to your inbox