Pension managers draw senator's ire

ALBUQUERQUE (KRQE) - A report tracking losses in New Mexico public-employee pension funds, one among the worst-performing in the nation, has a powerful senator suggesting the money managers should find other jobs.

The report delivered to the Legislative Finance Committee cited two major pension funds for poor performance. The Public Employee Retirement Fund lost $4.3 billion, a higher percentage of its money than almost every other public pension fund in the country, according to the report.

The Educational Retirement Board, which handles pensions for educators, lost $2.8 billion.

While most public pension funds in the United States lost money in 2008, state Sen. John Arthur Smith, D-Deming, said don't just blame the stock market for the bad year.

“The thing that bothers me is the performance below our peer groups," Smith told KRQE News 13. “If it was marginal it would be different, but it's substantial.”

The LFC report showed PERA's fund performance got the lowest rating possible, he added.

“My concern is, without a good explanation, it's time for a change,” Smith said. Asked my KRQE News 13 if that meant those running the show needed to go, the senator replied, "Right."

Christina Gauthier from PERA held a seminar for municipal worker from Los Ranchos de Albuquerque Monday afternoon and tried to reassure the workers who attended. They, like most public employees in New Mexico, count on PERA for their pensions.

“We're over $8 billion still,” Gauthier said. “We're down from $13.7 billion; that's a pretty significant drop.

"But in perspective, we're double where we were six years ago.”

Still the LFC study showed "serious concern" about whether the PERA fund is generating enough money in the long term to pay its benefits.

Smith and incoming LFC Chairman Rep. Luciano "Lucky" Varela, D-Santa Fe, both said the heads of PERA and other New Mexico investment funds will be called to the group's meeting in May. There they will be asked to explain why the losses in New Mexico's funds are higher than those in other states.

Smith said the committee is prepared to subpoena the funds records if necessary.

PERA Executive Director Terry Slattery did not respond to a request for comment on the report and on Smith's remarks.

Two other state investment funds also fared poorly in 2008 although they performed better than the retirement funds when compared to their peers nationally. The Land Grant Permanent Fund, which helps to fund education, and the Severance Tax Permanent Fund, which supports government operations, respectively lost 26.6 percent and 31.8 percent of their value.

During that time one measure of the stock market, the Dow Jones Industrial Average, dropped nearly 34 percent.