Pension questions, pension answers

• Published October 14, 2008

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Dean Uribe of Olympia writes: "Given the state of the economy, it occurs to me that a story on the condition of the public employee's retirement system might be timely. It is a story that would receive statewide interest regardless of its fiscal solvency."

As it turns out, Dean, I recently quizzed Investment Board Executive Director Joe Dear on this very subject. A few key questions and answers:

How is the on-going turbulence on Wall Street affecting the pension fund?
DEAR: The most recent turmoil has affected assessed values across the portfolio. But there have been no realized losses like we took on Washington Mutual and Lehman Brothers Investments. As the U.S. and European market falls, the value of the investment falls. The portfolio is down.

Are there more losses coming like those in Washington Mutual and Lehman Brothers?
DEAR: Now essentially everything is guaranteed by the Federal Reserve. Commercial paper is guaranteed by the Federal Reserve; the bonds taken over are going to be protected. The bailout bill passed last week has provisions for securities. Am I saying there's not going to be surprises? No. But the government has done everything it can to back securities.

What kind of action are you taking based on recent events?
DEAR: We watch market conditions closely, but our view is still to invest for the long term. We're not planning any immediate moves. We keep a long, steady view, and remember the virtue of a long horizon.

Is there still enough money to pay for my retirement?
DEAR: Absolutely. The difference between the contributions that come in, between government employers and employees, and what goes out in benefits is really close to even. The interest income from our fixed interest investments and income-producing investments like real estate is more than ample to assure out ability to pay benefits.

You can read the whole interview here, on our State Worker's page. I also asked about that $10 million transfer from the board mentioned in Gov. Gregoire's budget plan.

You can check on the investment portfolio at the Washington State Investment Board website. Check out the quarterly reports.

And, in case you haven't noticed, the stock market is a bit bipolar these days.