One of Philadelphia's biggest pension plans is coping with the investment losses of the last few years by trimming benefits. Does that still leave room for speculative local investments?

The Carpenters Pension & Annuity Fund of Philadelphia and Vicinity took an 11 percent hit to its $1.4 billion investment portfolio in 2008.

It has recovered part of the loss since then. Still, under current federal pension rules, the system, which ensures retirement pay for 5,300 pensioners, 7,700 working carpenters (many idled by the recession), and more than 2,000 retirees who are set to collect pensions in the future, is, like many other plans, running a deficit between its current assets and the money it will have to pay retirees in the future.

To cut that accounting deficit and cope with tough times, the plan this year cut pension-accrual rates for future retirees. It tightened rules for disability payments, and lengthened the minimum service for early retirement to 25 years, from 20 years.

The new contract also diverted 60 cents of the total 75-cents-per-hour increase to the pension plan. The other 15 cents will go to the carpenters' medical plans. "There'll be no wage increase this year," Jim McKeogh, actuary for the plan, told me.

The carpenters have also been hammered by losses to more than $200 million in private investments and investment funds. That includes $45 million the carpenters invested for a 38 percent stake in Philadelphia Media Holdings L.L.C., former owner of The Inquirer. The plan lost all of it when that company, headed by Brian P. Tierney, went bankrupt.

That hasn't scared the carpenters, headed by president Ed Coryell. The union lent $10 million to the Mid-Atlantic Real Estate Investment Fund L.P., a fund set up by lawyer and developer Jeffrey Rotwitt.

The fund used the carpenters' money as a loan to Rotwitt's Sun Center Studio Corp., a state-backed film-studio project in Delaware County that has yet to announce the major Hollywood films Rotwitt hopes to lure.

How can the carpenters afford such risks? McKeogh said the fund's "conservative assumptions" make room for more aggressive investments.

"They have a lot of bonds," McKeogh told me. "That kept them out of the volatility in 2008 [and limited losses]. So they do private-equity investments. Some do well, some do poorly. But on a $1.4 billion fund, these aren't big commitments, percentage-wise."

Medical merger

It is, for now, an unhappy romance. "Ultimately,

Community Health Systems

will acquire

Tenet Healthcare Corp.,

" predicts

Gary Lieberman

, stock analyst for

Wells Fargo Securities L.L.C.

, of New York, in a report to clients last week. He expects Community's offer of $3.3 billion, or $7 a share, to be close to the final price.

One prominent Philadelphian has a role on both sides of this hostile offer. Drexel University president John Fry has been a director of Nashville-based Community Health since 2004, when he was president of Lancaster's Franklin and Marshall College.

As head of Drexel, Fry also has leverage with Texas-based Tenet, since Drexel's College of Medicine has an "academic affiliation agreement" with Tenet's two Philadelphia hospitals, Hahnemann University Hospital and St. Christopher's Hospital for Children.

Community Health is the nation's largest hospital chain, with 127 hospitals. Locally, that includes Chestnut Hill Hospital in Philadelphia; the Brandywine, Phoenixville, and Jennersville Memorial regional hospitals in Chester County; Pottstown Memorial Medical Center; and Memorial Hospital of Salem County, N.J.

What happens to Drexel and Tenet's big Philadelphia hospitals if Tenet becomes part of a much larger company? "It's premature to speculate," said Niki Gianakaris, Drexel's spokeswoman.

But since Fry remains on the Community board despite Tenet's opposition to the offer, it's easy to speculate he supports, or could live with, this deal.

Community could cut as much as $400 million in yearly spending from Tenet's $9 billion annual budget by eliminating thousands of headquarters and back-office jobs, health-care analyst A.J. Rice at Susquehanna International Group told clients. And a combined Community plus Tenet could push for better rates from Independence Blue Cross and other big insurers who set reimbursement rates, as my colleague Stacey Burling has noted.