Florida State Pension Misses Fiscal 2025 Benchmark, Projects Full Funding in 17 Years

Public equities spurred the Florida Retirement System’s 10.3% return for the fiscal year that ended June 30, raising its asset value to $211.5 billion from $198.7 billion one year earlier. However, it underperformed its benchmark’s return of 11.1%.

The pension fund also reported three- and five-year annualized returns of 9.44% and 9.72%, respectively, and 10-year returns of 8.01%.

Public equities returned 16.4%, followed by active credit, which returned 10.3%. Strategic investments and private equity earned 7.7% and 7.2%, respectively, followed by fixed income and cash at 6.4% and 5.2%, respectively. The FRS’ real estate investments represented the only asset class that was down for the year, registering a 0.3% loss.

The pension fund’s asset allocation, as of the end of June, was 48% public equities; 22% core fixed income; 13% open-end real estate, hedge funds, and insurance-linked securities; 11% private equity and closed-end infrastructure; and 6% private debt and closed-end real estate.

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The Florida State Board of Administration, which administers the legislatively mandated programs relating to investments of the FRS, estimated its funded ratio was 87% as of the end of its fiscal year, calculated using a market-based funded ratio. It also projected that under the current asset allocation, it expects the funded level to reach 100% by fiscal 2042.

The SBA also reported that the state pension fund’s current asset allocation consists of 78% return-seeking assets and has an expected return of 6.32%, less than the FRS’ 6.70% actuarial assumed rate of return.