Principal & ERA: Yearly Shifts Explained
Understanding the Fund’s structure is crucial, particularly the difference between the portion categorized as Principal and the Earnings Reserve Account (ERA).
- The start of each fiscal year brings a significant change in reported values, as the Percent of Market Value (POMV) transfer is moved out of the ERA to support state services and the dividend.
- The State of Alaska relies on the annual Percent of Market Value Draw (POMV) from the earnings of the Alaska Permanent Fund to provide more than 50% of the state’s unrestricted general fund revenues.
What to Know: At a Glance
Monitoring the Fund’s values enhances transparency, supports rules-based actions, and strengthens public confidence in its management.
- The ERA has a sufficient balance to provide for the FY27 POMV commitment for the current generation’s use of the Fund.
- Inflation proofing of the Principal was not appropriated in FY25 and FY26, impacting the intergenerational benefits of the Fund.
What Happens at Year-End and Year-Start
At the end of FY25, the Alaska Permanent Fund’s monthly financial statements provided a record of the year’s changes to the Principal and ERA accounts. APFC has published the audited, year-end financial statements for June 30, 2025.
- ERA: The ERA grows through the addition of realized earnings, statutory net income or “SNI.” APFC generated $5.9 billion in SNI in FY25 from investment activity. Realized earnings are deposited into the ERA while earnings that aren’t realized are allocated to both the Principal and the ERA on a pro-rata basis. When assets with unrealized gains are sold and the earnings are realized, 100% of those earnings are transferred into the ERA.
- Principal: The Principal grows automatically with any royalty deposits, and mechanically through appropriations for inflation proofing and special appropriations.
- In FY25, $0.5B in royalties was deposited into the Fund.
- There were no inflation proofing appropriations in FY25 or FY26 due to concerns about the ability of the ERA’s sufficiency to provide for near-term POMV transfers.
At the beginning of FY26, recording of the FY26 and FY27 POMV transfer to the State impacted the Fund value of the financial statements. APFC has published the unaudited monthly financial statements for July 31, 2025.
- The FY26 POMV obligation ($3.8 billion) moved out of committed ERA to liabilities. It is now available to support the State’s current FY26 Budget.
- Commitment of realized earnings for the FY 27 POMV draw ($4.0 billion) to support the State of Alaska’s upcoming FY27 Budget, including the dividend and essential services.