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Glossary

The Permanent Fund comes with its own vocabulary. Here are the terms you'll hear, in plain English.

Alaska Permanent Fund: The state's ~$89 billion savings-and-investment fund, created by constitutional amendment in 1976 to convert oil wealth into a lasting financial asset owned by all Alaskans.
APFC (Alaska Permanent Fund Corporation): The quasi-independent state corporation, created in 1980, that invests and manages the Fund. It is governed by a Board of Trustees and does not set the dividend.
Principal (the "corpus"): The permanent, non-spendable core of the Fund. Protected by the constitution, it can only be invested — never spent — unless voters amend the constitution.
Earnings Reserve Account (ERA): The spendable account holding the Fund's realized investment profits. The Legislature can appropriate from it — for the dividend, state services, and inflation-proofing.
POMV (Percent of Market Value): The rule, adopted in 2018, that caps the state's annual withdrawal at about 5% of the Fund's average market value over five years. Designed to make the draw sustainable.
The draw: The amount actually transferred out of the Earnings Reserve each year under the POMV rule, to be split between the dividend and government services.
PFD (Permanent Fund Dividend): The annual payment made to eligible Alaska residents from the Fund's earnings. First paid in 1982; the amount is now set by the Legislature each year.
Royalty: The payment companies make to the resource owner — here, the State of Alaska — for extracting oil, gas, and minerals. At least 25% of mineral royalties must go into the Fund.
Inflation-proofing: Moving money from the Earnings Reserve into the Principal each year so inflation doesn't erode the Fund's real value. Under today's structure it requires an annual legislative appropriation.
Prudent-investor rule: The 2005 standard that lets trustees invest the Fund across diversified asset classes using professional judgment, rather than from a fixed legal list of allowed investments.
Unrestricted General Fund (UGF): The pool of state money lawmakers can spend on almost anything. The Permanent Fund draw is now its single largest source — bigger than oil.
Sovereign wealth fund: A state-owned investment fund built from public resources or surpluses. Alaska's is the largest in the U.S.; Norway's, at over $2.1 trillion, is the largest in the world.
Single-account structure: A proposed reform to merge the Principal and Earnings Reserve into one fund governed by the POMV draw — acting as a spending cap and removing the annual inflation-proofing step.
Constitutional amendment: A change to the Alaska Constitution, which requires approval by the Legislature and a statewide public vote. It's the tool that would be needed to lock in a guaranteed dividend or a merged fund.

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