Legislation approved last summer calls for pension funds that trailed the state fund’s average rate of return over the previous 10 years by at least 2 percentage points and that are also less than 65% funded to hand over assets to the Pension Reserves Management Board. The city’s retirement board believed it would cost participants much to liquidate assets in a down market and wanted to turn over the assets in securities to the state (See MA City in a Rift with State over Pension Takeover ).
A board member told the Eagle-Tribune newspaper that liquidation was finally approved to avoid costly litigation with the state and to decrease the risk that the portfolio’s value would diminish. The board will instruct investment managers to liquidate assets within the next 30 days, the newspaper said.Methuen will be able to regain control of its investments within five years.
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