The Alaska Permanent Fund Corporation’s Board of Trustees held a special meeting on March 5, 2020, to further their recommendations pertaining to the Earnings Reserve Account.
The Board of Trustees passed Resolution 20-1 OFFERING ALTERNATE PROPOSALS TO SUPPORT AN ANNUAL PERCENT OF MARKET VALUE DRAW FROM THE PERMANENT FUND. The Resolution brings forth measures to enhance the sustainable use of the Fund’s earnings and improve the durability of the Earnings Reserve Account.
Resolution 20-1 is intended to inform the debate on the structure, and use of the Alaska Permanent Fund for all generations of Alaskans. It includes the following for consideration: a constitutional or statutory change to combine the ERA and corpus, or an adjustment to the existing structure, including a periodic review of Fund return assumptions and an adjustment to transfers from the ERA to the Principal.
In passing this Resolution, Chair Richards notes that “the risk of the Earnings Reserve Account being unable to make payments to government or to fund the dividend over a ten- or twenty-year period is quite high. It is important that the State put in place a structure that minimizes that risk before a series of bad market events results in payment shortfalls. The Board has passed a resolution recommending practical changes to the Permanent Fund’s structure to minimize that risk.”