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CEO of Alaska Permanent Fund Corporation gives presentation to Fairbanks Chamber of Commerce

Published: Dec. 1, 2020 at 4:23 PM AKST
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FAIRBANKS, Alaska (KTVF) - The Greater Fairbanks Chamber of Commerce held its weekly business presentation on Tuesday, December 1st with the topic “Managing and Investing the Alaska Permanent Fund.”

The virtual meeting featured guest speaker Angela Rodell, the Chief Executive Officer of the Alaska Permanent Fund Corporation (APFC), who discussed what APFC does to manage the fund.

After presenting on the place of the Permanent Fund in Alaska’s constitution, Rodell explained that revenue generated by the fund currently provides for seventy percent of Alaska’s expenditures.

“That’s a pretty high sense of responsibility, but we believe, APFC, we believe we’re up to the task,” Rodell said.

She then described the difference between calculating a draw on the Permanent Fund based on Percent of Market Value (PoMV), which went into effect in 2018, and the previous method of calculation, which involved realized income.

“Realized income is really based on the investment decisions. Should we sell a piece of property? Should we sell some shares of stock? Should we collect additional income? That’s the realized income, whereas market value recognizes the impact on investments without having to actually sell those investments to take advantage of that increased value. It creates a stable draw by averaging the market value over the first five of the preceding six years,” she said.

According to Rodell, no other state in the U.S. utilizes an income-generating fund to the extent that Alaska uses its Permanent Fund.

When asked about the relative merits of using the money to fund state government versus saving for future generations, she said, “I think that culture of Alaskans taking care of future generations because they’ve been through boom and bust cycles is why we’re so fortunate to have the Permanent Fund today, and it’s important to recognize that this is no longer about booms and busts. This is about steadiness of a revenue source, and that we need to maintain that.”

Rodell said she thinks that the larger threats to the fund are more within Alaska than outside. “It’s that sense of, we want to be able to have it all, and where do we make sacrifices? Who is going to bear the brunt of those sacrifices, and what do they look like?”

She went on to say, “The state can pay a full PFD (Permanent Fund Dividend), or it can pay for other essential services, but it can’t do both at the full rate it has been. So something has to go, and luckily I don’t have to say what that is.”

More information on how the Permanent Fund is invested can be found on APFC’s website, and the full presentation is available here.

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