(NEWS CENTER) -- The Maine Public Employees Retirement System (MainePERS) took a hit in the early August stock market slide, but the investment team says it is not concerned in the short term.
From Aug. 1-8 MainePERS went down 8.3%, $891 million. The fund actually did better than the Dow Jones, which went down 14.3%, but the numbers still aren't good. Still, the investment team says it is not changing its strategy. The fund is managed with a long-term strategy in mind, meaning the investment team expects there to be hills and valleys. And on the upside, the retirement plan actually gained 22.4% in FY2011, which ended June 30.
No matter what happens with the stock market, the state is obligated to pay the pensions of its retirees. And those pension payments do not fluctuate with the market.
What does fluctuate with the stock market is how much money taxpayers ultimately will owe to pay that pension liability. If the market goes down far enough, taxpayers have to pay more.
There was a lot of debate about the health of the state's pension fund this legislative session. It took a huge hit in the 2008 recession, and that's part of the reason the legislature made cuts to help pay down the unfunded liability in the system.
Treasurer Bruce Poliquin, one of the people leading the charge for pension reform in the last legislative session, says the reforms made by the legislature were done with the idea in mind that we could have another steep market downturn.