Today the Dow Jones Industrial Average closed below its low for the year signaling more turmoil ahead for public pension funds. Some analysts are starting to believe it’s all but likely to fall even further.
This market downturn is occurring just as the fiscal year of many public pension systems come to a close on June 30th.
Public pension funds across the country have lessened their risk exposure over the past year which may provide some level protection from falling equity prices.
However, the current downtrend will further diminish investment returns needed to maintain benefits and put pressure on government entities who guarantee the solvency of their pension systems.
San Bernardino and Riverside Counties are no exception.
State and local governments already reeling from the increased funding requirements impacting their budgets are now predicting sharp increases in their outlays for pension contributions.
The situation will continue to deteriorate if market conditions worsen.