W.Va. Staying the Course with its Investments

The Associated Press reports that "Managers of West Virginia's main investments are hoping the worst is over after the global financial crisis erased about $2.6 billion from the state's portfolio since June."

The state Investment Management Board believes December could have actually ended on a positive note, after a string of sometimes devastating losses in prior months.

All told, IMB officials say "it's too early to revisit the 7.5 percent assumed interest rate" for the state's portfolio, the article said. "Sticking with that projected return means the state must eventually offset the multibillion-dollar losses, and then some. To reach a 7.5 percent return this budget year, for instance, would require gains exceeding $768 million by June 30, 2009."

Analysts says public pension plans may have to "avoid retroactive benefit increases, hold off on cost-of-living hikes," audit their affordability, and perhaps even "hike required contributions from enrollees, their government employers (i.e., taxpayers) or both," AP reports.