FL Proposal Would Channel State Pension Money to Growth Industries

May 5, 2008 (PLANSPONSOR.com) - The Florida Legislature has approved a measure that would mandate the Sunshine State's public pension fund to invest up to $2 billion - or 1.5% of the fund - in private high-growth industries.

The Fort Lauderdale Sun-Sentinel reported that u nder the bill, the pension investments would be directed to industries such as those associated with the aerospace field, renewable energy, and life sciences. SB 2310 was sent to Governor Charlie Crist after the state Senate approved it unanimously last week, the newspaper said.

“Our state’s economy will only get worse if we don’t look beyond our overreliance on old industries such as tourism and agriculture,” said bill sponsor Senator Jeremy Ring, a former Yahoo executive, according to the news report. “Prudently harnessing the power of the state pension fund holds the promise for our state to become a national leader in innovative, high-tech fields and innovative, high-paying jobs.”

Ring’s model would allow the State Board of Administrators to redirect funds from the Florida State Retirement System already being invested outside the state into “technology and growth investments” in Florida.

The proposal is patterned after a California program that taps the assets of the California Public Employees’ Retirement System (CalPERS) for industries in the state. Similar efforts are now in use in 10 other states including New York, Massachusetts, Texas, and Ohio.

“We wanted something already tested and proven to deliver high dollar returns for our state while safeguarding the interests of our pensioners, participants and beneficiaries,” said Ring, according to the newspaper.