Alaskan state officials confirmed that the Alaska Permanent Fund (APF) topped 40 billion dollars in total assets on July 13, 2007, according to Wesley Loy of the Anchorage Daily News. The APF funds Alaska’s basic income guarantee, the Permanent Fund Dividend (PFD). The APF is invested in a wide range of assets, but the recent increase in its value is mostly attributable to recent stock market gains.
The size of the dividend is also estimated to rise this year to about $1,575 per person or $6,300 for a family of four, also according to Wesley Loy. Official figures for the size of the PFD will not be released until mid-September, but the estimate represents an increase of $468 over last year’s dividend of $1,106.96. However it is still substantially below the largest PFD of $1,963.86 in 2000.
A record size of the fund does not directly translate into a record-size dividend because the dividend is determined by five-year average earnings of the fund rather than its total value. The total value of the fund is determined not only by its earnings, but also by new investments in the fund out of the state’s oil revenues. Recent oil revenue windfalls do not directly determine the dividend, but they are likely to lead to continued high dividends in the future.
According to Loy, “The big reason for this year’s jump is that a relatively poor year, 2002, is falling out of the equation to make room for this past year, which was a strong one for profits. Next year’s dividend is likely to be even bigger as another weak year, 2003, will fall out of the equation.” If investment returns remain high as the state begins to make returns on recent oil revenues, Alaskans could see record-size dividends within a few years.