By Bob Katzen
The Pension Reserves Investment Management (PRIM) Board’s Investment Committee met to discuss why the state pension fund’s balance dropped by $4.5 billion in the fourth quarter of 2018. State employees, teachers and some municipal workers retirement funds are invested through PRIM. The fund dropped from $73.8 billion at the end of quarter 3 to $69.3 billion at the end of quarter 4.
Executive Director Michael Trotsky called 2018 a challenging and volatile year. “These kinds of selloffs are not too unusual, as I mentioned we had similar quarterly losses in 2010 and 2011, and in fact we’ve had 23 large quarterly losses since the Great Depression back in the 30s,” he said. “Twenty-three of them in 90 years, so that means on average we get a selloff of this magnitude once every four years or so. And it’s been seven years since the last quarterly selloff so perhaps we were due.”