Markets Drive State Pension Fund Down 20 Percent
The number is in for Maryland's public pension system, and it's not good: The pool to fund state employee retirement costs has shrunk by more than 20 percent in the past 12 months.
From its high point, the value of stocks and other investments held by the Maryland State Retirement and Pension System has fallen 30 percent, from $40.9 billion in 2007 to $28.5 billion as of June 30.
The precipitous drop is slightly less steep than those of the U.S and foreign equity markets in the past year, but could nonetheless force the state -- which is grappling with furloughs and other budget cuts -- to dedicate additional money to cover state employee retirement costs. Some Maryland lawmakers have estimated it could cost an additional $250 million annually to replenish the retirement system.
The system's Board of Trustees will determine new contribution rates later this year, and Gov. Martin O'Malley will have to account for the drop in retirement investments in the state budget he releases in early 2010.
Dean Kenderdine, executive director of the retirement system, said the number could have been worse. In the last four months the system regained nearly $4 billion from February, its low point for the year.
Aaron C. Davis
August 5, 2009; 1:00 PM ET
Categories: Aaron C. Davis , Maryland State Budget
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