PHILADELPHIA (CBS) - As Philadelphia's municipal pension fund is decimated because of the distressed economy and the roller-coaster performance in equities markets, the board that oversees the fund met today to assess the impact (see previous story).
The city's pension board held an hourlong meeting this morning, during which the members decided to cash out $50 million worth of public equities.
(That $50 million represents one-seventh of the fund's approximately $350 million in public equities holdings; the remainder of the $3-billion fund is in private equities.)
The funds being cashed out were managed by two firms that the pension board had decided to axe anyway, irrespective of their most recent performance. However, rather than immediately reinvesting the money, the board decided to hold it as cash for at least a week as the situation in world financial markets plays out.
City controller Alan Butkovitz, who sits on the board, says they'll meet again next Wednesday to reassess.
"By Wednesday we can have the cash in our hands, and a decision can be made whether to buy other stocks, whether to bet against the market and sell short, or whether to continue to hold onto cash," he told KYW Newsradio.
Butkovitz actually favored a sell-off on the order of $100 million, but the board opted for this more cautious approach.
Philadelphia's municipal pension fund is just one of thousands of pensions that are suffering during the current economic turmoil.
Reported by KYW City Hall bureau chief Mike Dunn
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