46 Years of Alabama Growth — the Alabama Public Pension Fund

Investments by the Alabama Public Pension Fund transformed the skyline of downtown Mobile. The fund now includes as assets the city’s five tallest buildings.

The Retirement Systems of Alabama has grown substantially and contributed significantly to Alabama’s economic expansion over the last 46 years by developing assets in Alabama, financing industry in Alabama, and promoting Alabama as a place to visit and work, says a new book, “Alabama’s Public Pension Fund Growth and Economic Expansion Since 1973,” by Mark Fagan, a professor emeritus at Jacksonville State University.

Fagan’s book traces the history of the public pension funds from 1973, when the governor was George Wallace and the Judicial Retirement Fund was created. It was also the year that David Bronner became secretary-treasurer of RSA.

In 1973, writes Fagan, RSA had a total of $623 million under management. RSA’s funded ratio was 25 percent and RSA’s total income was $179 million. RSA’s investment income was $32 million with an investment yield of 6.3 percent. RSA’s asset classes consisted mostly of bonds and mortgages with no real estate and a small percentage of stocks.

By 2018, says Ragan, RSA had 24 funds with $43.8 billion under management. RSA’s total income was $5.4 billion with $3.4 billion in investment income and an investment yield of 9.35 percent. RSA asset classes were mostly in domestic and international stocks, fixed income bonds and real estate. RSA had 16 buildings and 14 parking decks, 26 golf courses, 8 hotels, 6 spas, 29 restaurants, a railcar plant, 2 residential communities, 100 newspapers, investment in a company with 142 television stations with free publicity for Alabama tourism, 59 real estate leases with the Alabama state government, and a total of 52 specific real estate assets in Alabama.

Alabama tourism was especially enhanced by the development of the Robert Trent Jones Golf Trail, beginning in the 1990s. “Tourism spending in Alabama increased from $3.3 billion in 1990 (before The Trail and RSA tourism promotions) to $15.6 billion in 2018,” says Fagan.

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