Senator Ted Deutch (D-Boca Raton) on Wednesday said he was very disappointed at the failure of the Governor and Attorney General to move forward on CFO Alex Sink’s important initiative to improve accountability and oversight within the nation’s fourth largest pension fund and other critical state and local finances.
Senator Deutch also announced he will refile legislation to expand the scope of the state’s oversight of the State Board of Administration, which manages, among other investments, Florida’s $110 billion retirement fund. The Boca Raton Democrat has filed legislation to protect the investors in the state’s retirement system and the retirees who depend on it, each year he has been in the Senate.
“Attorney General Bill McCollum said yesterday, ‘I’m of the adage that if it ain’t broke don’t fix it’. What’s broken is a system where politicians accept the status quo rather than take action on meaningful change,” said Senator Deutch, “CFO Sink has worked to increase transparency, accountability and oversight of Florida’s pension fund since coming into office and yesterday’s reforms were just the latest example. My legislation aims to support these important priorities by giving a greater voice to investors and retirees, ensuring the highest level of integrity and eliminating any potential conflicts of interests.”
Senator Deutch’s bill expands the Investment Advisory Council from 6 to 9 members. Most importantly, each member must have special knowledge and experience to serve on the IAC, and there must be members representing the pension’s investors, namely local government employees, firefighters, police, teachers and state employees, and include a beneficiary of the Florida Retirement System.
The bill requires quarterly reports to the SBA to include more detailed information on alternative investments and on assets that may have been downgraded during the reporting period. The latter aims to alert the board to investments facing great risk, like the securitized debt obligations that proved so devastating during the subprime mortgage market meltdown
It also creates an independent audit committee to provide oversight, additional internal controls, and risk assessment. This committee will consist of six members: 2 appointed by the Governor, 2 by the Attorney General and 1 by the Chief Financial Officer. The CFO will also be an audit committee member.
Finally, the bill also creates new ethics and conflict of interest requirements for outside investment advisers in order to further ensure that the interests of our public investors and retirees always come first.
If endorsed by the legislature this year, the bill will mark the second time Senator Deutch has successfully revamped the operations within the SBA. He previously passed legislation requiring the SBA to divest Florida’s pension funds from companies doing business with Iran and Sudan.
Wednesday, September 30, 2009
Senator Ted Deutch pushes forward on CFO's call for greater SBA accountability
From the Senate Dems:
Posted by Professor Rex at 4:07 PM