Stock Market Turmoil Hits Central PA
By: Adam Paluka
Updated: May 25, 2010
BELLEFONTE, CENTRE COUNTY - The turmoil on the New York Stock Exchange is hitting local governments in Central Pennsylvania.
Centre County makes investments in the stock market to cover their employee retirement fund. In good years they do not need to move any money from the general fund to the pension bank account, in bad years they have to shuffle a lot.
After two rough years, the stock market and Centre County's retirement contribution levels appeared to be headed in a positive direction. Before the recession hit, the county had $72 million in its retirement fund. With the market upheaval the fund lost almost a third of its value and dropped to around $50 million, but it had bounced back earlier this year to the $70 million range.
“It looked pretty good. We were having a good 1st quarter,” Commissioner Jon Eich said.
But now those early 2010 gains could mean nothing. A few bad weeks on Wall Street can have a lasting impact.
“This is a five year rolling average, so if we have down year this year, it not just impacts this year's budget but it ladders out over the next five years as part of what we look at as our obligation,” Steve Dershem, Centre County Commissioner, said.
The county is expecting to contribute more than $3 million to its retirement fund this year to meet obligations. Commissioners said they have to handle the market's ups and its downs.
“We're not shying away, we're sticking with the plan certainly its not good news when it's down, it's going to affect us,” Commissioner Rich Rogers said.
The commissioners said they will get an updated report about the financial health of their retirement fund in June. They will know for certain how much cash the county will need to contribute in September.
Centre County makes investments in the stock market to cover their employee retirement fund. In good years they do not need to move any money from the general fund to the pension bank account, in bad years they have to shuffle a lot.
After two rough years, the stock market and Centre County's retirement contribution levels appeared to be headed in a positive direction. Before the recession hit, the county had $72 million in its retirement fund. With the market upheaval the fund lost almost a third of its value and dropped to around $50 million, but it had bounced back earlier this year to the $70 million range.
“It looked pretty good. We were having a good 1st quarter,” Commissioner Jon Eich said.
But now those early 2010 gains could mean nothing. A few bad weeks on Wall Street can have a lasting impact.
“This is a five year rolling average, so if we have down year this year, it not just impacts this year's budget but it ladders out over the next five years as part of what we look at as our obligation,” Steve Dershem, Centre County Commissioner, said.
The county is expecting to contribute more than $3 million to its retirement fund this year to meet obligations. Commissioners said they have to handle the market's ups and its downs.
“We're not shying away, we're sticking with the plan certainly its not good news when it's down, it's going to affect us,” Commissioner Rich Rogers said.
The commissioners said they will get an updated report about the financial health of their retirement fund in June. They will know for certain how much cash the county will need to contribute in September.
