Just what the city doesn't need: Another pension hit

CITY OFFICIALS are closely watching how the volatile stock market will affect the city pension fund, just three years after investment losses forced painful budget cuts.

As of Friday, the roughly $4 billion fund had lost 3.5 percent of its value in the latest decline, said city Finance Director Rob Dubow.

Dubow stressed that the markets remain in flux and that the fund could rebound. The loss thus far is substantially less than the 20 percent loss in 2008 when the real-estate bubble burst, sinking the stock market.

Still, Dubow said there was cause for concern.

"Through Friday we had lost over $120 million dollars - a significant loss that will have real impact if the market doesn't correct itself," said Dubow. "If that doesn't reverse itself over time, that means the general fund will have to make up the shortfall."

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

The city's Board of Pensions and Retirement has scheduled a meeting tomorrow to discuss whether it needs to take action. The city pension fund is considered one of the nation's weakest municipal funds, having just 47 percent of the assets needed to pay projected benefits.

The Associated Press contributed

to this report.