Public Pension Groups: We're Still OK

September 25, 2008 (PLANSPONSOR.com) - National trade groups representing the nation's largest public pension funds contended that state and local pension programs "remain sound" despite the ongoing Wall Street turmoil.

A news release said public pension benefits are pre-funded with more than $2.5 trillion in assets - about 60% of assets in global stocks; 30% in government and corporate bonds; 5% in real estate; and the remainder in cash and alternatives.

Additionally, public pension funds are subject to accounting rules that promote transparency and allow the funds to focus on the long term rather than requiring them to react to short-term market volatility, the news release said. The news announcement asserted that public pensions have the liquidity needed to pay promised benefits for the near term and the accumulated assets and funding mechanisms that will allow them to continue to do so indefinitely.

"Public pension funds are intentionally designed to withstand market fluctuations - even ups and downs as dramatic as those in recent days and in years past, " said Terry Slattery, president of the National Association of State Retirement Administrators (NASRA) and executive director of New Mexico PERA, in the news announcement. " Retirement benefits for the nation ' s public workforce are safe and secure because they are highly diversified and invested with a focus on the long-term."

The statement noted that systems' performances under pressure from the Wall Street turmoil are in keeping with how they fared in similar downturns in recent years.