JACKSONVILLE, Fla. -- After four months of internal reviews, the Police and Fire Pension Fund is undergoing a major portfolio restructuring, according to Executive Director John Keane.
Keane says pension reform is necessary to ensure the fund's long-term sustainability.
The fund currently has $1.3 billion in assets. The City of Jacksonville owes $1.5 billion, which means only about 50-percent of the pension is funded right now.
"For the citizens, the taxpayers of Jacksonville, it is to some extent a tempest and a tea cup," said Keane. "Although, this is a serious tempest."
The moves recently announced include re-distribution of certain assets among accounts of existing Investment Managers; additional funding of four Index Accounts; and creating a new bond Index Fund.
The portfolio changes were recommended by a consultant with Summit Strategies.
The board approved transferring $15 million into each of the three Index Accounts managed by Northern Trust for the fund, the Daily Emerging Markets Fund, EAFA Index Fund and S & P 500 Index Fund.
Keane says the board is only allowed to invest in stocks on the national exchange, in bonds rated "A" or better, and a small portion with real estate and international equities.
The Jacksonville City Council authorizes where the Police and Fire Pension Fund can invest its money.
Keane says the fund could see substantially higher returns if they were allowed to participate in alternative investments like distressed debt and private equity.
"The more we make in the markets, the less we have to get from the City of Jacksonville," said Keane.