Pension Programs Take a Hit.

Pennsylvania's two main public pension programs lost more than $28 billion dollars last year, mostly due to the stock market's drop. During a budget hearing at the state Capitol, officials told members of the House Appropriations Committee that taxpayers might have to make up the shortfall. The State Employees' Retirement System lost nearly 29 percent of its value over the year, while the Public School Employees' Retirement System dropped almost 30 percent. Jeffrey Clay, the executive director of the public school pension program, says 2009 will likely bring similar results. He says, “We don't have any firm projections at this point. I don't think we've hit bottom yet. We're not expecting positive results for this fiscal year. And it will be interesting to see if there's even a positive result for this calendar year.” Clay stresses that pension payments in both funds are guaranteed by the state. He says that means tax increases may be needed, as government agencies will likely have to increase their contributions. Clay says his main concerns are maintaining PSERS' liquidity and calming fears of school employees who rely on pensions. He says, “We've been in existence since 1917. We're long-term investors, we keep our eye on the long term. We've been through the Depression, we've been through a lot of other upheavals in the markets, and we're going to get through this. We do have well-diversified investments. The markets are down, that's the way they go, but the markets will return at some point in the future.”