The Florida State Board of Administration’s Audit Committee met this week to discuss the Sunshine State’s investment trends and some changes that will impact foreign investment from certain countries.
Chris Spencer, the SBA’s executive director, was tasked with analyzing the state’s budget after his appointment by Governor Ron DeSantis. Spencer said during the committee meeting that they saw a 9.3% increase over the previous year, attributing this to the state’s recruitment and retention efforts as well as a strong focus on Florida’s IT restructuring.
During the 2024 legislative session, lawmakers passed House Bill 7071, which limits the investments the SBA can hold on behalf of the Florida Retirement System, which invests in companies owned by the Chinese government.
The bill prohibits the SBA from further investing in these Chinese companies. In addition, the SBA must identify all current investments and divest from those investments by September 1, 2025.
The summary of the law states that preliminary data from November 2023 showed that there were holdings in 211 Chinese companies valued at about $277.1 million.
Spencer’s main focus in his analysis was to monitor the implementation of the law and keep the state board updated. He found that the number of Chinese companies was much higher than initially thought.
“We fully implemented that when the governor signed this bill in June. We initially identified 547 listed companies in China that would fall under this criteria and we have now been in touch with our fund managers to implement the divestments from those,” Spencer said at the review meeting on Monday.
Florida lawmakers had already passed HB5C in 2023, which expands the criteria for prohibited investments and “screened entities” related to Iran. These include companies with Iran-related assets engaged in finance, manufacturing, petrochemicals, energy, mining and shipbuilding.
Spencer said that by June 2023, 13 companies had been added to a list of ongoing audits related to the passage of the law.
“The corporate governance team will continue to monitor these companies throughout the rest of the year to determine what further actions are required with respect to these companies,” Spencer said.
A conference on actuarial assumptions will be held in October. The SBA will make recommendations there, including leaving the current assumed rate of return unchanged and increasing contributions to the defined benefit pension plan.
—
The story was republished in collaboration with The Center Square.
