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Florida to 19 Local Pension Plans: Fix Funding Issues Now

Nineteen of Florida’s most underfunded local pension plans received “call to action” letters from the state Tuesday, calling for the systems to immediately begin formulating a plan to deal with their funding issues.

From the Florida Times-Union:

The 19 pension plans all are less than 50 percent funded, prompting the terse letter from the Department of Management Services, the state agency tasked with reviewing local pensions.

DMS Secretary Chad Poppell sent letters to Jacksonville Police and Fire Pension Fund executive director John Keane and Raymond Ferngren, administrator of the Jacksonville Corrections Officers’ Pension Fund and the Jacksonville General Employees’ Disability Fund. The Alachua School Board Early Retirement Plan and Ocala General Employees’ Retirement System also received letters, and Jacksonville Chief Financial Officer Ronald Belton was copied.

The letter to Keane pointed to the Police and Fire Pension’s $1.6 billion unfunded liability and said current funding was only enough to pay 37.3 cents of every dollar owned to retirees and current employees.

“As a result, your plan should consider taking action to prevent future taxpayers from having to incur costs,” Poppell wrote.

Coincidentally, Poppell serviced as Jacksonville’s chief of human resources under Jacksonville Mayor John Peyton.

The Police and Fire Pension letter also mentions ongoing discussions with city officials to reform the pension, saying they “are not yet realized.”

“The Department of Management Services requests you immediately notify all active and retired members of the plan regarding the plan’s conditions and what actions will be taken to improve it,” it said.

It’s unclear whether the funds will have any punishment if they don’t comply with the letter’s demands.

Photo credit: “Bluefl”. Licensed under Public Domain via Wikimedia Commons – http://commons.wikimedia.org/wiki/File:Bluefl.png#mediaviewer/File:Bluefl.png

Florida Pension Invests $63 Million In European Real Estate

The Florida State Board of Administration, the entity that manages assets for the Florida Retirement Systems, announced a $63.76 million commitment to a JP Morgan fund that invests in real estate in France, the UK and Germany.

Reported by I&P Real Estate:

Florida State Board of Administration has approved a €50m (€39.1m) commitment to JP Morgan Asset Management’s opportunistic European IP Fund III fund.

The fund has also approved a $100m allocation to Prologis’ Targeted US Logistics fund.

As revealed by IP Real Estate last week, JP Morgan’s opportunistic fund is aimed at assets in the UK, Germany and France.

The fund manager can raise as much as €750m for the fund, which will invest in office, industrial, retail and residential properties, according to Florida SBA. Buildings with low vacancy and in need of refurbishment and redevelopment are being targeted by the fund.

As reported, the fund is currently investing in office properties in Berlin and Paris. With leverage, the fund could invest as much as €3bn across Europe.

Florida said it would continue to identify international pooled fund opportunities as part of its plan for the current fiscal year.

[…]

Florida has also recently sold two office buildings for $202m. The Nyala Farms office asset in Westport, Connecticut was sold for Florida by L&B Realty, while One Boca Place was sold through Invesco Real Estate.

The pension fund has allocated $900m for new real estate investment opportunities, split into $500m for core and $400m for non-core. Capital will be invested via both funds and direct ownership through separate account managers.

Florida’s long-term real estate allocation target is 10 percent. It currently invests 7.5 percent of assets in real estate.

Florida Pension Continues Search For Senior Fixed Income Manager

The Florida State Board of Administration (SBA), the entity that manages investments for the Florida Retirement Systems, has re-posted a job listing looking for a senior portfolio manager to manage fixed income investments.

The SBA appears to have increased the top range of the position’s potential salary, from $140,000 to $180,000. The job pays, at minimum, $120,000. The listing reads:

Responsibilities

50%. Research and analysis of economic and market information to support the Internal Fixed Income investment process. Shape the interest rate view and contribute relative value ideas. This will involve, but not be limited to; analyzing written publications and conversing with economists and strategist regarding individual country or global economic conditions and prospects, researching, understanding and explaining the implications of economic projections on the current structure of internal portfolios, researching, analyzing and presenting relative value opportunities for internal portfolios and constructing, explaining and presenting trade ideas to capture relative value opportunities.

25% Supervision of and backup for Portfolio Manager

10%. Preparation for and participation in weekly group strategy meeting.

15%. Assist the Sr. Investment Officer-Fixed Income with special projects and perform other duties as delegated.

Qualifications

(Re-advertisement – Previous applicants will be considered and need not re-apply)

A bachelor’s degree from an accredited college or university in computer science, MIS, accounting, finance, business, communication, public information, marketing, economics, mathematicis, statistics, or management and five years of related professional experience, three years of which must have been at a supervisory level or higher;

Or, a master’s degree or MBA from an accredited college or university and three years of related professional experience, two years of which must have been at a supervisory level or higher.

Professional related experience will substitute for the required college education.

Preference will be given to candidates with a Chartered Financial Analyst (CFA) designation.

The application period closes on October 10.

View the listing by clicking here.

Photo by Nathan Stephens via Flickr CC License

Report Card Grades 151 Florida Pension Plans

The LeRoy Collins Institute, a non-partisan think tank at Florida State University, recently released a report grading 151 municipal pension plans across Florida.

A quick snapshot of some of the grades, from the Florida Times-Union:

Fernandina Beach general employees – F

Fernandina Beach police/firefighters – F

Jacksonville corrections officers – F

Jacksonville police/firefighters – D

Atlantic Beach police – D

Orange Park firefighters – D

Orange Park general employees – D

Orange Park police – D

Palatka firefighters – D

Palatka general employees – D

Atlantic Beach general employees – C

Jacksonville general employees – C

St. Augustine general employees – B

St. Augustine police – A

Palatka police – A

The author of the report told the Florida Times-Union:

“Many cities are in urgent need of reform that will help reverse this decline in healthy pension funds and get more plans headed toward the honor roll,” said David Matkin, assistant professor at University of Albany-SUNY, who wrote the report.

Jacksonville’s Mayor, Alvin Brown, said he considering putting pension reform ideas on the table for the Corrections Officers Fund, the General Employees Fund and the Police and Fire Fund.

Pension Policy: Taking Stock of Where Florida’s Candidates For Governor Stand

Pension policy has become an important issue in the race to be Florida’s governor, and the two major candidates (incumbent Rick Scott and challenger Charlie Crist) both have very different views on how the pension system should be altered, or not.

A rundown of their respective positions, from the Ocala Star Banner:

If Rick Scott is re-elected, you can expect a renewed push to move more public workers out of the traditional pension plan and into a 401(k)-type plan — which is currently an optional plan in the retirement system.

It was under Scott that public workers began making an annual 3 percent contribution to the state retirement fund in 2011. Scott’s criticism of the current system includes keeping a list of public workers who qualify for more than $100,000 in annual pension benefits on his state office website.

Under the changes, employees can choose whether their contributions and state contributions go into the traditional pension plan or into a 401(k)-type plan in which they can direct the investments.

If Charlie Crist wins, he is more likely to side with major labor unions that are supporting his campaign, including the Florida Education Association, which argue that Florida’s pension plan should not be changed.

The positive returns on the pension fund for the fiscal year that ended in June will bolster the argument that change is not needed.

Florida’s pension funds returned 17.4 percent in fiscal year 2013-14.

Photo by The 45th Space Wing via Flickr CC License

Judge: Florida Violated Open Records Laws When It Stonewalled Pension Record Requests, Sent Investigators To Man’s Home In “Chilling” Incident

Over the last few years, Curtis Lee—Jacksonville resident and retired pension attorney—has filed dozens upon dozens of public record requests relating to the Jacksonville Police and Fire Pension Fund.

But Lee claims that instead of getting access to the public records he requested, he was stonewalled by the State Attorney’s Office for the Fourth Judicial District.

In one instance, says Lee, the Office waited a full year to provide an initial response to his requests. In another, the Office sent investigators to Lee’s home to tell him to stop contacting the Office and to question him as to his purpose for requesting the documents.

So Lee filed a lawsuit against the Office alleging they violated public records laws with their actions.

And the law gave Lee some solace this week when a judge sharply criticized the Office and ruled that they will have to pay for all of Lee’s legal fees. The judge, however, did not rule that the Office intentionally broke public records laws, which would have carried more serious penalties. More from the Florida Times-Union:

A judge ruled State Attorney Angela Corey’s office broke Florida’s public-records law, scolding the prosecutor’s office for sending investigators to question the citizen in his home and never demonstrating why the unusual visit was “necessary and appropriate.”

…

Judge Karen Cole also criticized Corey’s office for refusing to accept Lee’s cash for records and in some cases taking more than a year to provide even an initial response.
The State Attorney’s Office will have to pay Lee’s legal fees for his lawsuit against it. Cole will need to figure out exactly how much that is. Lee’s attorney, Brooks Rathet, said it should be somewhere around $20,000.

The State Attorney’s Office also violated public records laws by requiring the public to pay for records with business checks, cashier’s checks or money orders. Cash and debit cards were not accepted.

To get a money order, Lee and others had to pay a third-party service a fee. That, Cole said, “unlawfully burdens” citizens. From now on, the State Attorney’s Office has to accept cash for records. If the office wants to, the judge said, it can also allow other types of payment.

Cole also described how the State Attorney’s Office violated the law by taking too long with its response to requests.

As one example described, Lee sent Corey’s office six letters with 27 categories of public records requests in February 2011.

About five days later, two State Attorney’s Office investigators came to Lee’s door, according to Judge Karen Cole’s final judgment.

Sending investigators to tell someone to stop calling the State Attorney’s Office “would have a chilling effect,” Cole wrote, for most people. Most people might not have continued requesting records after a visit like that, she wrote.

After the judgment, the Office told Lee that they would produce the records he had requested by Thursday, August 14.

Lee filed a similar lawsuit against the Jacksonville Police and Fire Pension Fund. Lee won certain aspects of that case, but the case is now being appealed to the Supreme Court by the fund.