The wizard behind Florida's investments drew back the curtain Friday to reveal some details of how his office operates.
Ashbel Ash Williams, executive director and chief investment officer of the Florida State Board of Administration (SBA), spoke to the Economic Club of Florida, focusing on how Florida public pensions measure up to other state retirement programs.
Williams has been at the helm of the SBA since late 2008, but he also held the post from 1991 to 1996 and spent the next decade on Wall Street, with time at Schroder Capital Management and Fir Tree Partners.
Originally created in the 1930s to counter the effects of the real-estate bubble bursting and the Great Depression, the SBA manages state investments, including retirees pension plans, and helps protect the states credit.
There is a lot of anxiety about public pension funds, said Williams, who noted that across the nation, public funds faced deficits of up to $3 trillion.
Williams assured his audience that Florida employees investments were secure, even saying if contributions stopped today, the funds would have enough to pay beneficiaries for 15 years.
We have, as of yesterday, close to $119 billion in the assets in the Florida Retirement System Trust Fund, said Williams.
He said that when the market bottomed out in March 2009, the assets came to $83 billion. At that time, a county government, which Williams refused to identify, demanded the SBA assets be shifted toward safer investments. Williams ignored the advice and said his faith in the market paid dividends.
Our view was that capitalism is not dead and the U.S. economy is not over, said Williams. We added $36 billion to the balance sheet of the Florida Retirement Trust Fund without one dime from the Florida taxpayers.
Noting a lack of faith in public investment programs, Williams did not shy from attacking other states for irresponsible investments of their retirement funds, singling out Illinois, New Jersey and Pennsylvania.
Most of the reforms theyve been adopting, weve done since the 1970s, Williams said.
He stressed Floridas long-term commitment to securing its credit and protecting investments. Weve had high levels of responsibility at the state level, said Williams.
He cited the Florida Technology and Growth Act of 2008 as an example. While the act asked for the state to increase funds to state businesses, the Legislature did not require the SBA to invest in those companies.
As a fiduciary of the pension fund, my duty is to the pensioners, said Williams, who stressed that his chief concern was always the return on the investments.
Williams signaled out the Legislature for helping secure Floridas investments. We have a very effective partnership with the Florida Legislature, he said.
Williams touched on what he termed pension envy. While American corporations allow their employees to determine their own retirement investments through 401(k) programs, public sector employees do not have that freedom or that responsibility. Taxpayers are asked to pay for something they cant get from their own employers, said Williams.
Gazing toward the economic future, Williams warned about the national debt and said politicians from both parties shoulder the blame. Weve been on a debt addiction for quite a while in this country, he said, adding that unlike other periods of increased national debt, there is little to show for it this time.
Williams also noted that the debt addiction filtered down to individuals and families.
The average U.S. household has 118 percent debt compared to income, he said. People used their homes as ATMs for a lot of years.
Williams did offer some hope for the future, noting that companies have more cash and better liquidity. He also said job growth is starting to emerge and that there are good signs in the increased business that shipping cargo is starting to increase.
Asked about various plans to restructure the trustees overseeing the SBA, Williams said it was not his place to comment on that, noting that the governor, the state chief financial officer and attorney general were on the board.
The audience was very receptive to Williams, even allowing him to speak after the meeting was supposed to be over. We need you now more than ever, Dominic Calabro, president and CEO of Florida TaxWatch, said to Williams.
Williams was modest about his achievements. Ive rebalanced things and thats the only credit I can take, he said.
Williams preferred to praise the 160 employees at the SBA.
Theyre a great group, he said. Were lucky to have them.
Reach Kevin Derby at email@example.com or (850) 727-0859.