State pension funds across the country lost nearly $1 trillion over the last two years as investments made by the funds tanked, leaving state lawmakers scrambling to make up for the losses. In Virginia, the state pension fund lost $11.2 billion between 2008 and 2009, according to newly released Census Bureau data. Only 12 other states lost more.
Maryland ranked 19th among states with pension fund losses, having lost $7.23 billion, the data showed.
Despite the massive losses, Virginia and Maryland fared much better than many states, including California, where investment earnings fell by more than $100 billion between 2008 and 2009. West Virginia saw the smallest drop, $555 million.
Across the country, earnings on investments decreased by $484.9 billion in 2009, following a decrease of $439.8 billion in 2008.
The Virginia and Maryland pension funds are now in better shape than they were several years ago as the stock market recovers from the throes of the recession. At the low point in 2009, Maryland’s fund fell below $30 billion, but it rebounded to $37.2 billion by late March, said Michael Rubenstein, a legislative analyst for the state.
“Most of the losses have been recovered,” he said. “That snapshot back in ’09 is not really reflective of the current status of our pension system.”
The Virginia Retirement System’s net assets were at $47.7 billion last June, up from $42.6 billion in June 2009. The fund is now above $50 billion, though still below its 2007 high of $58 billion.
“The trajectory is going in the right direction in terms of the funding,” said Robert Vaughn, staff director of the state House Appropriations Committee.
But the Maryland and Virginia pension systems still face unfunded liabilities of about $18 billion each, excluding health benefits, and both took steps during this year’s legislative session to bolster them.
In Maryland, lawmakers approved an increase in employee contributions and scaled back retirees’ health benefits to shore up its retirement fund.
The Virginia General Assembly allocated an additional $100 million for the pension system and agreed to speed up payments after deferring more than $600 million in payments during last year’s session.
“There is still a lot more work to be done to ensure that VRS remains solvent in the long term,” said Taylor Thornley, a spokeswoman for Gov. Bob McDonnell.
