The $34 billion Pennsylvania State Employees' Retirement System lost 4.1 percent, or over $1 billion, as investment markets tumbled in the first quarter.
The market made up most of its loss in April and May, chief investment officer John C. Winchester told the SERS board in its monthly meeting. Still, it "may be difficult to meet" SERS's 8.5 percent profit target, SERS said in a statement. Check SERS reports at www.sers.state.pa.us.
If returns fall below the target, they'll be even farther below the long-term 12 percent goal Gov. Rendell is touting in his plan to have SERS manage state highway funds from the sale of the Pennsyvlania Turnpike.
Even so, the fund's gains in recent years have enabled it to avoid a projected dramatic increase in state pension subsidies, said chairman Nicholas Maiale. Right now, it looks like the "employer contribution" will hit 5.7 percent of the state's payroll in 2012, compared to the current 4 percent. But SERS once thought it could go up to 30 percent.