The Permanent Fund's dividend account is running about $400 million ahead

The Permanent Fund account that pays the dividend and much of state government held about $400 million more than it needs at the fiscal year's midpoint, a cushion of roughly 7 percent.

The Earnings Reserve Account had $6.0 billion available as of Dec. 31, after setting aside unrealized gains and the committed draw for fiscal 2027. The corporation says $5.6 billion will be needed next year: $4.1 billion for the fiscal 2028 draw and an estimated $1.5 billion to inflation-proof deposits to the Principal.

No money was appropriated for inflation proofing in fiscal 2026.

The fund held $86.3 billion at the midpoint, including $73.8 billion in the constitutionally protected Principal. It has since grown past $91.3 billion, returning 12.42 percent for the year ended June 30. The second half was strong, so the $400 million margin is a floor rather than a current figure.

Performance at the midpoint was mixed. The fund returned 6.63 percent net of fees, beating its return objective of 2.92 percent but trailing a passive index at 7.30 percent and its own benchmark at 6.85 percent. Chief Investment Officer Marcus Frampton attributed the shortfall to the fund's "underweight position in expensive software and technology stocks" and said it started calendar 2026 strongly. Over 10 years the fund has returned 9.02 percent, beating all three measures.

Money reaches the state budget through the percent-of-market-value draw, paid from the Earnings Reserve rather than from any single year's investment return. The corporation's own materials warn that heavy reliance on the reserve can erode the earnings available for future draws.