CFO Sink’s Proposed SBA Oversight Reforms Delayed
Kyra Jennings or Kevin Cate, (850) 413-2842
TALLAHASSEE— Florida CFO Alex Sink today recommended reforms to strengthen and enhance the oversight of the state’s public pension fund, including a proposal to expand the Board of Trustees, but her motions were delayed until December by the other two members of the SBA Board, Governor Crist and Attorney General McCollum.
CFO Sink noted her decades of business experience and the recent governance study when laying out reasoned arguments for reforming the oversight structure of the $110 billion pension fund so many Floridians depend on for a secure retirement. She also pledged to work with Florida Legislators to move forward with Legislation to expand the Board of Trustees.
“The SBA governance structure is long overdue for a change and the recent governance study clearly showed that the SBA’s Board of Trustees should include more than just three elected officials,” said CFO Sink. “My recommendations continue the reforms I have taken the lead on since coming into office to improve the transparency, accountability and oversight of the SBA, and I was disappointed that they were not brought to a vote.”
CFO Sink offered three recommendations to strengthen the oversight and accountability of Florida’s $110 billion public pension fund at today’s Cabinet meeting:
• Expansion of the Board of Trustees – CFO Sink proposed recommending to the Florida Legislature that they expand the membership of the Board of Trustees, to include one or more members with extensive relative investment experience or knowledge and one or more members who is a beneficiary or participant in the Florida Retirement System.
• Fiduciary Training – CFO Sink proposed requiring each Trustee and each member of the Audit Committee, Investment Advisory Council and Participant Local Government Advisory Council to undergo annual training in fiduciary responsibilities and associated ethical requirements relevant to their roles.
• Regular, Independent Audits – CFO Sink proposed that the Audit Committee develop recommendations for regular external audits of the SBA which should focus on financials, compliance, internal controls, and operations.
These recommendations were validated by a Board-directed study of best practices of 15 other state pension funds and numerous private sector investment professionals presented to the SBA Board of Trustees earlier this month. The study was from an initiative by CFO Sink to bring a more modern, businesslike approach to the oversight and management of the SBA. The report can be read here.
“As one of the SBA’s three trustees, and the only current trustee with previous business experience, I have long argued that it takes more than three elected officials to oversee the $110 billion fund that our police officers, teachers and other state employees depend on for a secure retirement,” CFO Sink continued. “These three proposals were taken from the findings of an in-depth study of public pension funds around the country and private sector experts – and I will continue to push for these needed reforms.”
In March of 2008, CFO Sink presented her ten point plan designed to toughen the SBA’s financial safeguards, increase transparency in SBA communications and strengthen board oversight, which included recommendations such as Board of Trustee expansion.
As a statewide elected officer of the Florida Cabinet, CFO Alex Sink oversees the Department of Financial Services. A successful businesswoman with nearly three decades of experience in the private sector, Sink is serving her first term as Florida's CFO. As CFO, Sink's priorities include using her business experience to cut wasteful government spending, cracking down on financial and insurance fraud and reforming the state government's contracting practices.