NM Pension loses $3 billion in 2008

ALBUQUERQUE (KRQE) - Correction appended

Twelve months ago, the chairman of the New Mexico Educational Retirement Board was managing a $9.4 billion pension fund, and now the fund's worth has dropped to $6.6 billion.

"It absolutely worries me," NMERB Chairman Bruce Mallot said. "You ask me about the things that keep me up at night, that is one of the things that keeps me up at night."

He’s losing sleep while the fund is losing billions, but his board took steps to stop the bleeding.

Mallot says ERB has moved much of its money from stocks to less risky investments.

Also the board pulled its money out of Austin Capital, which was managing $130 million in ERB funds.

Austin Capital lost $8 to $10 million of ERB money it invested in a fund run by Bernard Madoff, the financier accused of bilking wealthy Americans out of billions.

Mallot says retirees who get checks from ERB have nothing to worry about.

However, he warns that if the fund loses another 31% of its value in 2009, state taxpayers could be called on to contribute money into the pension system.

The New Mexico Educational Retirement Board runs the pension system for public school teachers, and professors at state colleges and universities.

Correction: An earlier version of this story incorrectly stated how much money Austin Capital was managing. The company is managing $130 million.