Pennsylvania homeowners may subsidize school-pension losses. (News Briefs).

The Pennsylvania Public School Employees' Retirement System (PSERS) pension fund lost $4.4 billion last year, which could mean higher property taxes for homeowners in the state. PSERS trustees in December voted to triple the subsidy collected from local school districts and from the state. In one school district, Lower Merion, this could mean tax increases of $50 dollars per household. Not surprisingly, local officials are not happy about the property tax increase and are critical of PSERS trustees for not building up a larger reserve for the fund in better times. The system lost $2.6 billion on investments made in domestic and foreign stocks, bonds, real estate, venture capital, and other private investments. The losses, however, will not likely cause PSERS to replace its multimanager system with cheaper indexed investments. In the statement announcing the increase in the subsidy rate, PSERS said that it would continue to "prudently invest the as sets of the fund in a well-diversified portfolio with a long-term focus." (Source: The Philadelphia Inquirer, December 14, 2002)