Pension Mismanagement Uncovered

Florida — It's yet another case of mismanagement, plain and simple. The Florida pension fund lost a shocking $335 million on Enron stock — three times more than any other state employee retirement fund. An investigation by AFSCME and Florida Council 79 has found that the government body charged with overseeing the state's investments repeatedly engaged in poor investment practices that led to the massive losses.

The State Board of Administration (SBA) — whose board of trustees is headed by Gov. Jeb Bush (R) — permitted one of the pension fund's money managers to purchase Enron stock even after the now-bankrupt company's financial instability became public — and despite an ongoing investigation by the Securities and Exchange Commission.

Council 79, which represents 110,000 Florida public service employees with a direct stake in the pension system's financial security, outlined its charges in a recently released report, Inside the Florida State Board of Administration: Mismanagement Made the Enron Loss Inevitable.

The council is now calling for major reforms of the SBA, including outside review by independent experts who will report their findings to the state legislature. "SBA's bad investment practices led to the massive loss of retirement funds for state employees and taxpayers," says Pres. Gerald W. McEntee. "Governor Bush and the other trustees betrayed the faith put in them by Florida workers by putting their retirement security at risk."