ANCHORAGE (AP) -- The board of trustees for the Alaska Permanent Fund is planning to hire more lawyers because of the WorldCom scandal.
The fund is looking at its second yearly loss in a row, including a $55 million loss from its investments in WorldCom, according to the Alaska Business Journal.
It now is planning to hire more lawyers so it can take the lead on future shareholder lawsuits.
According to the Allen Moore, the fund's chief investment officer, preliminary figures show the state's saving account shrank by 2.2 percent during the fiscal year which ended June 30. That comes on top of a 3.3 percent loss the previous year.
The fund recently slipped below $24 billion in value. The main reason for the losses has been the declining stock market. The fund invests just over half of its assets in stocks.
Moore said that two of the permanent fund's 11 money management firms has invested in WorldCom. ''One got out in February, but the other got out in early May,'' Moore said. In addition, the fund owned three sets of WorldCom bonds. Those investments are now nearly worthless. Moore said the fund lost $13 million in WorldCom bonds and $42 million in the company's stocks, for a total loss this year of $55 million.
Moore said that last year the fund lost 15.4 percent on U.S. stocks and 8.6 percent on international stocks. But the fund did well on its other investments, which helped keep the overall loss to a minimum.
One result of the fund's decline will be fewer dollars for the permanent fund dividend program. Last year, the trustees allocated $1.1 billion for dividends; this year, the amount will be $925 million, a decline of 17 percent.
Last year's dividend of $1,850 was 5.8 percent smaller than the previous year's dividend. A 17 percent reduction this year would result in a dividend of $1,535 if all other factors remained equal.
Peninsula Clarion ©2015. All Rights Reserved.