State pension funds take billion-dollar hits - Albuquerque Journal

State pension funds take billion-dollar hits

Copyright © 2020 Albuquerque Journal

SANTA FE – New Mexico’s two large public retirement systems have already taken billion-dollar hits from a steep market downturn caused by actions taken in response to the coronavirus pandemic.

But the leaders of both pension funds say investment portfolio changes made in recent years have positioned the funds to ride out the storm – however long it lasts – and keep paying out benefits to retirees.

“We’ve lost money – every investor has – but we could have lost a lot more money if we hadn’t taken a more defensive position,” said Wayne Propst, executive director of the Public Employees Retirement Association.

He said the retirement fund’s value has dropped from about $16 billion in January to about $14 billion as of this week, though the market is fluctuating daily.

But only about 35% of the pension fund is invested in equities, with the rest in bonds, alternative investments and a healthy amount kept available in cash.

The state’s other public retirement system, the Educational Retirement Board, has an even smaller percentage – about 26% – of its portfolio invested in stocks, said Jan Goodwin, the ERB’s executive director.

“We have lower equity exposure, so we’re actually faring better than other pension funds,” Goodwin told the Journal.

The total value of the ERB was $13.8 billion at the end of last year. It had dropped to about $12 billion as of last week, Goodwin said.

The U.S. stock market has plunged since the coronavirus outbreak, due to concerns about rising unemployment levels and decreased consumer activity.

While the markets have surged in recent days on the news of a $2 trillion congressional stimulus package, the crisis could last for months.

Like other pension funds, both New Mexico funds rely on investment gains to help offset the difference between benefits owed over time and incoming contributions.

And even before the market downturn, both New Mexico funds faced questions about their long-term sustainability due to many factors, including increased retirements, generous benefit levels and longer life expectancies.

Legislators this year approved a bill that, starting in July, will increase taxpayer-funded contribution rates to the PERA and require public employees to pay more of their salaries into the fund.

Propst said that solvency fix, which includes changes to the annual inflation-based benefit adjustments that retirees receive, will help the pension fund weather the market doldrums.

“I don’t know how we could be in a better position than we are right now,” Propst said, saying the pension was better prepared for a market downturn than it was in 2008.

He said the pension fund was set to pay out $107 million in benefit payments next week – more or less the usual monthly amount – but he also acknowledged uncertainty about how long and deep the downturn might end up being.

“Nobody knows how this is going to play out,” Propst said.

The PERA covers about 50,000 state workers, municipal employees, judges, firefighters and law enforcement officers. It pays benefits to about 41,000 retirees.

Meanwhile, the ERB had nearly 51,000 retirees as of last year, Goodwin said, and about 61,000 active members, including teachers, school administrators and university professors.

She also said the market downturn would have to continue for an extended period before seriously affecting the pension fund.

“We’re not selling these investments and, over time, they’ll recover,” Goodwin said. “We’re in good shape to keep paying out benefits.”

Home » Journal North » Journal North Recent News » State pension funds take billion-dollar hits

Insert Question Legislature form in Legis only stories

Albuquerque Journal and its reporters are committed to telling the stories of our community.

• Do you have a question you want someone to try to answer for you? Do you have a bright spot you want to share?
   We want to hear from you. Please email

taboola desktop

ABQjournal can get you answers in all pages


Questions about the Legislature?
Albuquerque Journal can get you answers
Email addresses are used solely for verification and to speed the verification process for repeat questioners.
DeSantis recruiters eyed Catholic church for migrant flights that ...
ABQnews Seeker
SAN FRANCISCO (AP) -- Florida Gov. ... SAN FRANCISCO (AP) -- Florida Gov. Ron DeSantis' recruiters set their sights on Sacred Heart Catholic Church in the Texas border city of El ...
Vara bringing a taste of Spain with its Tinto ...
ABQnews Seeker
The 2020 vintage of Tinto Especial ... The 2020 vintage of Tinto Especial focuses on Spanish influences from the Catalonia region.
Singer-songwriter Logan Ledger to open for Vincent Neil Emerson
ABQnews Seeker
Logan Ledger's upcoming album, "Golden State" ... Logan Ledger's upcoming album, "Golden State" is due out on Sept. 8, but he's hitting the road opening for Vincent Neil Emerson.
Colorado's most destructive wildfire caused by embers from old ...
ABQnews Seeker
BOULDER, Colo. (AP) -- Embers from ... BOULDER, Colo. (AP) -- Embers from a smoldering scrap wood fire set days earlier outside a home used by a Christian religious communal group ...
Documentary looks at the crucial role libraries play in ...
ABQnews Seeker
"Library Stories: Books on the Backroads" ... "Library Stories: Books on the Backroads" will air at 7 p.m. Thursday, June 15, on New Mexico PBS.
Lobo Mazza-Downie runs to All-America status at NCAA Championship ...
ABQnews Seeker
University of New Mexico runner Amelia ... University of New Mexico runner Amelia Mazza-Downie finished fourth on Thursday night in the women's 10,000-meter final at the NCAA Outdoor Track and Field ...
Do-it-all Montes reaching a new level as Isotope hitter
ABQnews Seeker
Loosely translated, "Coco" means coconut in ... Loosely translated, "Coco" means coconut in Spanish. In 2023 minor league baseball terms, with Isotope Coco Montes it's synonymous with raking.
Trump charged over classified documents in 1st federal indictment ...
ABQnews Seeker
MIAMI (AP) -- Donald Trump said ... MIAMI (AP) -- Donald Trump said Thursday that he was indicted for mishandling classified documents at his Florida estate, a remarkable development that makes ...
Dogs and mail carriers really can get along: Here’s ...
ABQnews Seeker
Postal officials urge dog owners to ... Postal officials urge dog owners to take steps to protect carriers on their routes