Florida Retirement System note from FEA

Like many other members of the Florida Education Association, I just received the following from FEA Treasurer Clara Cook:

The news this week regarding our nation’s financial system has no doubt caused great concern for you and our members. While the news has been terrible, it appears so far that the Florida Retirement System (FRS) remains relatively stable and well diversified. While not immune from the losses occurring across the financial markets, Florida seems better positioned than almost every other state when it comes to the overall funding and performance of our retirement system. Our state’s Chief Financial Officer (CFO), Alex Sink, issued a statement this week and I’ll provide you the following quotes from her statement as guidance on the current state of the FRS portfolio:

On Lehman Brothers-

“The Florida Treasury held $139.5 million par value in Lehman Brothers Holding, Inc., bonds as of Friday, September 12, 2008. Of this amount, $104.1 million was senior debt and $35.4 million was subordinated debt. The total exposure represents less than 0.6 percent of Treasury investments, which total $24 billion. The Treasury is proceeding with an orderly liquidation of the subordinated debt this month.”

On the FRS portfolio-

“As Florida’s Chief Financial Officer, my highest priority during the last 20 months has been working to increase safeguards over Floridians’ tax dollars. Under my direction, the Treasury has tightened its investment decisions and limited exposure to any one individual corporation. While our nation is experiencing significant financial disorder, investment firms can and do fail from time to time, and investors must position portfolios to weather financial storms. We have positioned Florida’s Treasury to meet the cash needs of investors and balance the obligations of the state.”

While there are no guarantees… I believe the CFO has accurately outlined the challenges presented in the markets and has been proactive in managing the risks associated with investing.

Clara Cook, Secretary/Treasurer
Florida Education Association
Imagine the Future


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