Friday, December 5, 2008

Pension Funds

Big News or not?

We all know pension funds suck right now. We are all scared to look at our 401ks. We all are freaking out over whether we're going to have a job tomorrow or next week or next month.

Let's take some perspective. A quick search brings up the following losses nationally.

Iowa state pension - 19% or $4 billion

Wyoming down 25% or $1.5 billion

State of Kansas employees down 27% or $4 billion

Locally in Franklin County, Pennsylvania:

"The pension fund, worth about $66 million at the beginning of the year, was worth about $51.5 million as of Sunday, according to Franklin County treasurer David Secor.

The county's annual required contribution to the employee pension fund will more than double in 2009, from an estimated $1.5 million this year to $3.5 million budgeted for 2009."

In the lovely state of Massachusetts - $14 billion loss

"The Massachusetts state pension fund may shift part of its equity-heavy $39.3 billion portfolio into cash after posting a $14.4 billion loss so far this year. The fund, which will distribute up to $900 million to retirees this year, has been forced to sell its most liquid assets, mainly US bonds, as it makes monthly payments"

Here in Pittsburgh - $124 million loss

"The city pension fund's investments had to earn 10 percent to keep pace with $6.7 million a month in pension payouts. Instead, they lost 25 percent."

We appear to be in line percentage-wise with the rest of the country. How have other cities with a similar pension value fared? Will this hit us even harder than other areas because we were severely under-funded to begin with? Is this a good opportunity to invest as much as we can in the city's pension fund? Is there going to be a nation-wide bailout of pension funds? These questions and more I'm hoping someone else can answer for me or at least discuss.

No comments: