This photo shows the trans-Alaska pipeline and pump station north of Fairbanks. (AP Photo/Al Grillo)

This photo shows the trans-Alaska pipeline and pump station north of Fairbanks. (AP Photo/Al Grillo)

Alaska Voices: The permanent fund has been taking care of Alaskans for 45 years

It’s the largest sovereign wealth fund in the nation, the pride of Alaska and this month we celebrate its 45th anniversary.

By The Board of Trustees Alaska Permanent Fund Corporation

The late Gov. Jay Hammond liked to dream big. He wanted to “transform oil wells pumping oil for a finite period into money wells pumping money for infinity.” His dream came true. Because of the Alaska Permanent Fund, Alaska is now the only state that earns much of its unrestricted general fund revenues from the global economy.

Today, the Alaska Permanent Fund totals more than $80 billion. It’s the largest sovereign wealth fund in the nation, the pride of Alaska and this month we celebrate its 45th anniversary.

The fund’s roots date to 1968 when oil was discovered at Prudhoe Bay on Alaska’s North Slope. The find was world-class — what they call an “elephant” in the industry. The state held a lease sale just months after the discovery, and when the last bid was opened, the new state pocketed nearly $1 billion in bonus bids — enough money in those days to fully fund the state budget for a decade.

But needs were great in our young state, and the money was gone before the first drop of oil entered the trans-Alaska pipeline in 1977. Without a mechanism to save some of this instant wealth, leaders like Hammond believed “politicians would spend every windfall to satisfy insatiable short-term needs and demand, only to find themselves in a world of hurt when oil wealth declined. Such had been the experience of virtually every oil-rich state and nation.”

Hammond, aided by legislative leaders, decided the solution was to put some of the incoming money into a fund that would strengthen the long-term success of the new state and reduce the tax burden on its citizens. This led to a constitutional amendment that Alaskans overwhelmingly passed in 1976 to create the Alaska Permanent Fund. The amendment directed that the principal “shall only be used for those income-producing investments specifically designated by law” and that all income be “deposited in the general fund unless otherwise provided by law.”

In the 45 years that have followed, realized income from the fund’s investments totals $78.6 billion, and this money has flowed to the Earnings Reserve Account for appropriation. Since its inception, $30.3 billion of fund income has been saved for future generations through inflation proofing and special deposits to principal, $11.3 billion remains available for appropriation, and $37.0 billion has been paid out to current generations, fulfilling the founding vision of intergenerational equity.

Of the $37.0 billion paid out to current generations, $24.4 has gone to individual Alaskans in the form of permanent fund dividends, $12.1 has been distributed since 2019 to support government services and programs, including the dividend, and $433.8 million has gone to the Alaska Capital Income Fund based on the Amerada Hess settlement.

As the fund has grown, so, too, has its impact on the state. While the state was long dependent on oil to pay our bills, the fund — through its many billions of dollars in investments — has indirectly but substantially diversified the state’s revenue.

Thanks to 45 years of expert management and a disciplined investment strategy, the fund has matured to meet its founders’ expectations. Capital Finance International named the Alaska Permanent Fund Corporation the Best Sovereign Wealth Fund Investment Team in the Americas for delivering a “stand-out performance.”

“APFC is strengthened by a diverse leadership team and staff that aim to protect principal capital and outperform market benchmarks,” the international business publication wrote. “It forges partnerships with premier external managers to amplify internal investment capacities and broaden the Fund’s investment reach.”

The fund’s success also comes from the legislative and executive branches by supporting and protecting it through inflation-proofing and special appropriations to the principal, easing of investment restraints and passing the Percent of Market Value rule to establish a known and manageable withdrawal structure that protects the fund’s long-term value.

Today, Alaskans are proud beneficiaries of a fund that has grown large enough to pay for many of our essential services and programs.

As Elmer Rasmuson, the banker who served as the first Trustee chair, put it: “Money may not be everything, but I tell you, having the permanent fund gives us all a lot of confidence and determination for the future.”

The Board of Trustees Alaska Permanent Fund Corporation are: Chair Craig Richards; Vice-Chair Lucinda Mahoney; Trustee Corri Feige; Trustee William G. Moran; Trustee Steve Rieger; Trustee Ethan Schutt.

More in Opinion

U.S. Senator Dan Sullivan, R-Alaska, speaks to Anchor Point residents during a community meeting held at the Virl “Pa” Haga VFW Post 10221 on Friday, May 30, 2025, in Anchor Point, Alaska. (Delcenia Cosman/Homer News)
Opinion: Big beautiful wins for Alaska in the Big Beautiful Bill

The legislation contains numerous provisions to unleash Alaska’s extraordinary resource economy.

Children are photographed outside their now shuttered school, Pearl Creek Elementary, in August 2024 in Fairbanks, Alaska. (Photo provided by Morgan Dulian)
My Turn: Reform doesn’t start with cuts

Legislators must hold the line for Alaska’s students

Deena Bishop, commissioner of the Department of Education and Early Development, discusses the status of school districts’ finances during a press conference with Gov. Mike Dunleavy at the Alaska State Capitol on Thursday, April 17, 2025. (Jasz Garrett / Juneau Empire)
Opinion: The fight to improve public education has just begun

We owe our children more than what the system is currently offering

President Donald Trump and President Vladimir Putin of Russia at a joint news conference in Helsinki, Finland, July 16, 2018. (Doug Mills/The New York Times file photo)
Opinion: Mistaking flattery for respect

Flattery played a role in Trump’s One Big Beautiful Bill.

(Juneau Empire file photo)
Opinion: Life is harder when you outlive your support group

Long-time friends are more important than ever to help us cope, to remind us we are not alone and that others feel the same way.

Deven Mitchell is the executive director and chief executive officer of the Alaska Permanent Fund Corp. (Photo courtesy of the Alaska Permanent Fund Corp.)
Opinion: The key to a stronger fund: Diversification

Diversification is a means of stabilizing returns and mitigating risk.

A silver salmon is weighed at Three Bears in Kenai, Alaska. Evelyn McCoy, customer service PIC at Three Bears, looks on. (Photo by Jeff Helminiak/Peninsula Clarion)
Opinion: Will coho salmon be the next to disappear in the Kenai River?

Did we not learn anything from the disappearance of the kings from the Kenai River?

Jonathan Flora is a lifelong commercial fisherman and dockworker from Homer, Alaska.
Point of View: Not fishing for favors — Alaskans need basic health care access

We ask our elected officials to oppose this bill that puts our health and livelihoods in danger.

Alex Koplin. (courtesy photo)
Opinion: Public schools do much more than just teach the three Rs

Isn’t it worth spending the money to provide a quality education for each student that enters our schools?

Gov. Mike Dunleavy speaks to reporters at the Alaska State Capitol on Thursday, April 17, 2025. (Jasz Garrett / Juneau Empire file photo)
Letter to the Editor: Law enforcement officers helped ensure smooth, secure energy conference

Their visible commitment to public safety allowed attendees to focus fully on collaboration, learning, and the important conversations shaping our path forward.

Laurie Craig / Juneau Empire file photo
The present-day KTOO public broadcasting building, built in 1959 for the U.S. Army’s Alaska Communications System Signal Corps, is located on filled tidelands near Juneau’s subport. Today vehicles on Egan Drive pass by the concrete structure with satellite dishes on the roof that receive signals from NPR, PBS and other sources.
My Turn: Stand for the community radio, not culture war optics

Alaskans are different and we pride ourselves on that. If my vehicle… Continue reading

U.S. Sen. Dan Sullivan (R-Alaska) delivers his annual speech to the Alaska Legislature on Thursday, March 20, 2025. (Jasz Garrett / Juneau Empire file photo)
Opinion: Sullivan, Trump and the rule of lawlessness

In September 2023, U.S. Sen. Dan Sullivan established his own Alaska Federal… Continue reading