Lehman bankruptcy hits Florida state pension funds

Miami HeraldSeptember 15, 2008 

The bankruptcy of Lehman Brothers, a prestigious Wall Street firm, will touch Florida's pension funds and the state-run insurer because both hold its securities.

The State Board of Administration holds $322 million in Lehman stock and bonds. The SBA manages the state's employee fund and more than two dozen other funds, including assets for the Florida Hurricane Catastrophe Fund and the Florida Prepaid College Plan.

Dennis McKee, a spokesman for the SBA, said the agency has an $84 million unrealized loss on its holdings.

About two-thirds of the securities are held by the Florida Retirement System, which includes the pension funds for local counties such as Miami-Dade and Broward. The rest is spread out in the catastrophe fund and the Lawton Chiles Endowment Fund, which helps fund Medicare.

McGee said because the SBA is such a substantial investor in the financial markets, with more than $159 billion in funds under management, the agency has a relationship with most of the large Wall Street houses.

The agency said it was trying to quantify its relationship with Merrill Lynch and American International Group, a major insurance company that is seeking a $40 million capital injection from the Federal Reserve Bank to avoid being downgraded by the credit rating agencies.

Read the full story at MiamiHerald.com.

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