Pension funds taking hit

North Dakota's pension funds for teachers and state government workers are taking their lumps from the stock market swoon, although their ability to pay benefits is not affected, managers say.

"For us, it's been a matter of holding investments, and trying not to get caught up in the hysteria," said Steve Cochrane, director of North Dakota's Retirement and Investment Office.

The market value of pension funds that cover state government workers, some local government employees and public school teachers has dropped between 15 percent and 19 percent so far this year, Cochrane told the Legislature's interim Employee Benefits Programs Committee.

J. Christian Conradi, an actuary who advises the funds, said the makeup of their portfolios have not had to change in order for them to continue paying benefits.

The legislative panel reviews proposals to change pension and health insurance benefits, and recommends bills for the full Legislature to consider.

Both of the primary pension funds were worth more than $1.78 billion on Aug. 31. Cochrane said he could only roughly estimate how much the funds' worth had declined by mid-October. As of Tuesday, the Standard & Poor's 500-stock index had declined 34 percent since Jan. 1.

Although the Public Employees Retirement System and Teachers' Fund for Retirement are more than 60 percent invested in stocks, they have other investments to cushion market swings, Cochrane said. The funds are invested in real estate, timber land and other hard assets.

"We have a large number of our assets that aren't traded on a daily basis," Cochrane said. "We have a number of investments that were purposely put into the portfolio to dampen this type of volatility."