As stock market fluctuates, city moves to protect Pension Fund

Updated to better reflect latest figures:

As the stock market continues to fluctuate wildly, board members for the city pension fund today voted to liquidate a small portion of the $3.8 billion fund in an effort to protect against future losses.

At a special meeting today, the pension board today voted to move money from two recently terminated equity managers to a strategic fund that will be managed in-house. It could be held in cash, or invested, said the fund's Chief Investment Officer Sumit Handa. The rough amount of the new strategic fund discussed at the meeting was $50 million, but according to the pension board, the funds being cashed out most recently had a combined $40 million in holdings.

City Finance Director Rob Dubow said he thought this was the right move.

"I think it's prudent. Given the size of the fund, it's not a big percent of the fund," Dubow said. "It does give us a chance to counteract a little bit of what's going on in the market."

As of Friday, the fund had lost $125 million or 3.5 percent of its value in the latest decline, said Dubow, who stressed that the market remains volatile. The loss thus far is substantially less than the 20 percent loss in 2008 when the real-estate bubble burst, sinking the stock market.

In 2008, the city was forced to put more money in the pension fund and cut dollars for the Fire Department, libraries and pools.