State pension fund value dips $3 billion, but bounce back expected - WKOW 27: Madison, WI Breaking News, Weather and Sports

State pension fund value dips $3 billion, but bounce back expected


The roller coaster on the stock market has impacted billions of dollars for the more than 500,000 people invested in Wisconsin's state pension plan.

Keith Bozarth is the executive director of the state of Wisconsin Investment Board (SWIB).

The board manages the $80 billion pension fund, and the fund took a hit from Monday's record stock market plunge.   "It would amount to a little over a $3 billion decline in value,"  Bozarth told 27 News.

But the market has bounced back Tuesday, up by more than 400 points.

Bozarth said the fund is managed to account for the stock market's ups and downs, with a long term strategy.

Bozarth said that strategy includes a target of roughly 60% of the fund's assets being invested in the stock market.   "It's a discipline that gets you to buy assests at lower prices, and when they increase in price, then you sell some of them.   That's why we have these strategic targets, so you aren't tempted to just let it ride and build up, and then lose all of these winnings."

Last year, state officials said the fund paid out $3.54 billion to pension plan participants, an amount similar to what the fund lost on Monday.

State pension fund managers said all decision making factors in the need to cover pension plan pay outs for several years.

And with such a large, diversified fund, Bozarth said the fund is in a position to mimic the federal government's proposed actions.   "There will be some opportunities to buy distressed debt at a deep discount and make a profit on that."

Officials said the pension fund does hold stock in some of the failing financial giants:   Washington Mutual ($7 million); Wachovia ($79 million); AIG ($95 million).


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