Alex Sink wants reform for the State Board of Administrators listen12/22/09 Joshua Holton
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Almost one million Floridians rely on the state’s $112 billion pension fund. It provides financial support to working and retired state employees such as fire fighters and school teachers. Florida’s Chief Financial Officer Alex Sink is seeking to expand the board of trustees that is in charge of managing the fund.
According to Sink, the current board of trustees for the State Board of Administration (SBA), can not effectively manage the pension fund for the whole state with only three members. Currently the board includes CFO Sink, Governor Charlie Crist, and Attorney General Bill McCollum. The former president of Bank of America’s Florida branch, Sink has spent several years fighting for reform of the Florida SBA.
Former CFO Tom Gallagher accused Sink’s proposal of potentially politicizing the board of trustees with additional members.
Sink is the only member of the board with considerable financial background. She said that experience should be a requirement for at least some of the future board members.
The lack of oversight became clear in 2008 when the SBA admitted that $2.5 billion was under financial stress. This panicked local school boards, cities and counties who reacted to the fall of the shaky securities by pulling their funds out of the SBA-managed pool for state and local governments. Although a November 2007 audit of the SBA exposed the $2 billion in risky investments, Sink said she took issue with pension fund management early in the following year.
According to the St. Petersburg Times, last month the Securities and Exchange Commission announced that they have been investigating whether the SBA and three other firms such as J.P. Morgan and Lehman Brothers are involved in a scheme for making false statements about the risk and liquidity of investments purchased by the SBA-managed funds. The SEC investigation is described as a public records request on the SBA website
A video of CFO Sink’s comments from her press conference on holiday fire safety.
CFO Sink’s State Fire Marshal web site