CHARLESTON, W.Va. — Leading state lawmakers learned Tuesday the state’s investments performed poorly on Wall Street in October and they were told they should prepare to allocate more money to state-financed pension funds.
“We fell in quite a hole in October. It was a lousy month for all assets,” state Investment Management Board Executive Director Craig Slaughter told members of the Joint Committee on Government and Finance. “Bonds were down, stocks were down, stocks were down seven or eight percent depending on the market.”
Slaughter said the investments couldn’t “dodge that bullet.”
“I would suggest that this fiscal year (for investments) is going to be a pretty tough one,” he said.
A annual growth of 7.5 percent is assumed for the various state pension funds. If they don’t meet that level, the legislature has to allocate money to make up the difference. Slaughter said that’s the way it’s looking now.
“I would plan accordingly,” he told the committee. “It won’t really hit you again until 2020, when the pension plans report this fiscal year’s returns to you but you might as well plan for it now.”
Senate President Mitch Carmichael, R-Jackson, lawmakers would take the report under consideration.
“We recognize that our assets are safe and their are fluctuations in the market,” he said.
There could be more losses in the months ahead. The more recent losses of the last two weeks on Wall Street haven’t yet been reported to lawmakers.
In the current state budget, lawmakers were able to allocate an additional $20 million in general revenue funds because the pension funds saw earnings of 15.8 percent from the previous fiscal year.
Lawmakers wrapped up monthly interim committee meetings Tuesday afternoon.