The APFC Board of Trustees Recognizes Fund’s Evolving Role

In Uncategorized by Paulyn

The Board of Trustees held its quarterly meeting in Juneau, Alaska on February 19-20, 2020 to review the performance of the Alaska Permanent Fund through the first half of the fiscal year 2020 (FY20), to consider the current asset allocation and investment policy, and to discuss the structure of the Fund.

The Alaska Permanent Fund’s investments were up 5.38% in value during the first half of the fiscal year 2020 and up 15.71% in the 12-month period for the calendar year 2019. Returns for each asset class and their respective benchmarks are available under Performance.

In building upon the recommendations brought forth in the Trustees’ Paper Volume 9 released in January of 2020, the Board of Trustees evaluated the structure of the Fund and its ability to meet the expectations of providing both enduring intergenerational growth and reliable income-generation functions. Based on the Board’s direction, policy recommendations will continue to be developed and brought forth at a later meeting for consideration

Chair Craig Richards remarked that “the separation of the Permanent Fund into two accounts, the Principal and the Earnings Reserve, is a historical artifice of 1970’s accounting concepts. As the Board heard today, not having a single fund creates an approximately 50% chance that the Permanent Fund will not be able to fund the POMV distribution including dividends, in one or more years over the next 20-year period.  Ideally, we will work toward legal changes that combine the two accounts.  Alternatively, we must have a clear strategy to maintain a robust ERA balance during down market cycles.”

APFC was pleased to welcome Senate President Giessel and Speaker of the House Edgmon to the meeting together with Senator von Imhof and Representatives Foster, Johnston, and Kopp.  Legislative support for the work that the Board of Trustees and the APFC Staff are doing to manage and invest the Fund is essential for our continued success. In working together, we will build on the legacy established over the past 40 years and provide renewable financial resources for Alaskans to benefit from for the next 40 years and beyond.

In summary of the two-day meeting, Angela Rodell offered: “My takeaway for Alaskans is this meeting highlights the effort that the Staff and Trustees continue to make in balancing the needs of our State and current generation while ensuring we have a robust asset to benefit future generations of Alaskans.”

The next quarterly meeting of the Board of Trustees will be held on May 20-21, 2020 in Kenai, Alaska.

 

2020FEB_APFC BOT Quarterly Meeting FY20 Q2