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Florida public pension plan posts 13.8 pct annual return

Aug 24 (Reuters) - The Florida Retirement System Pension Plan on Thursday reported a 13.77 percent net return on investments for the year ending on June 30, far outstripping last year's return of less than 1 percent.

The state's public employee pension plan, which has $153.5 billion in assets, exceeded its target return by 81 basis points, said the Tallahassee-based State Board of Administration (SBA), which oversees investments.

"We are always pleased to post double-digit returns, and this year is no exception," Ash Williams, chief investment officer of the SBA, said. "However, as always our focus has always been on the long-term sustainability of the plan, and we must acknowledge current dynamics in the financial markets moderating projected future returns."

Global equity and private equity were the fund's strongest asset classes in the past fiscal year, returning 19.6 percent and 18.3 percent, respectively. Its strategic investments, which include hedge funds and distressed debt, returned 9.75 percent, and real estate returned 8.7 percent.

Cash and fixed income earned 0.6 percent and 0.37 percent.

Last year, real estate, private equity and fixed income were the top performers, returning 12.66 percent, 7.36 percent and 4.35 percent, respectively. Strategic investments, cash and global equity earned 1.83 percent, 0.33 percent and negative 3.09 percent.

Over the past five years, Florida's pension plan annual average return was 6.8 percent. In the last two decades, it was 7.3 percent.

Williams attributed long-term performance to prudence, patience and diversification. Florida's pension fund is among the five largest in the United States in terms of assets.

Most public pension funds rely heavily on investment returns for revenue. If returns are consistently weaker than expected, pension funds can request greater contributions from plan holders or cut costs by reducing benefits.

The Florida Retirement System Investment Plan, a defined contribution pension plan for public employees, also reported investment returns on Thursday. The plan, which has close to $10 billion in assets, returned 13.36 percent compared with negative 0.88 percent last year. (Reporting by Laila Kearney; Editing by Leslie Adler)