Pennsylvania Pension Now Faces Billions in Losses

The Wall Street Journal has an article on Pennsylvania’s state employee’s pension fund, and its market losses. Noting that “Pennsylvania invested more in hedge funds than any other state pension fund” and that taxpayers will make up any investment losses (actually, any returns less than 8.5% increase the cost to taxpayers).

With the pension fund down about 14% in the first nine months of 2008, it is possible that the state will have to quadruple its annual contribution to roughly $1 billion in 2012, according to people familiar with the situation.

What the article does not mention is that the pension fund for Pennsylvania school employees, PSERS, is also a state-wide fund (funded jointly by the state and by local school districts) in similar circumstances — in fact, prior to recent losses, PSERS was in worse shape in terms of forthcoming increases in taxpayer contributions — and that Pennsylvania taxpayers were already expecting a dramatic increase in pension contributions in 2012.