A bill introduced by Sen. Amy Klobuchar, D-Minn., to criminalize deep fake porn is expected to be signed into law. Credit: FILE Annabelle Gordon/Sipa USA via Reuters Connect
WASHINGTON – As owners of 401(k) plans and Individual Retirement Accounts (IRAs) worry about the impact of President Donald Trump’s tariff policies on their retirement money, Minnesota’s state workers are fretting about their pensions.
Jill Schurtz, the chief investment officer for the Minnesota State Board of Investment, an independent agency tasked with trying to grow the $96 billion state fund that finances pensions for teachers and state employees, says she’s aware of concerns.
But she said there is nothing to worry about.Schurtz said the state’s pension fund is “large enough to bear the brunt of a market crisis.”
She also says the fund’s diversity has shielded it from sharp downturns. Schurtz said 50% of the fund is invested in equities, or stocks; 25% is invested in “fixed income” securities like bonds, certificates of deposit and Treasury bills; and the remaining 25% is used to fund private investment markets.
“We can pay benefits, no matter what the (economic) weather is,” Schurtz said.
That said, the fund, which has averaged returns of about 8% a year over the last decade, was flat — meaning it did not lose or make money — in the first three months of this year. And Schurtz said there is no final, official accounting yet for how the fund performed in April, when the big dives in the market occurred after Trump announced his April 2 “Liberation Day” tariffs.
Still, Schurtz is taking the long view, noting that the stock market always recovers from a slump and its historic trajectory is up.
The fund pays $240 million-$250 million in benefits to retirees every month, above and beyond what it collects in contributions. So, it has to grow.
And it did, by $23 billion in the past five years, Schurtz said.But Mark Haveman, executive director for the Minnesota Center for Fiscal Excellence, a nonprofit that conducts research on education and fiscal issues, said at least one of the state’s pension plans — the one for teachers — is underfunded and that a downturn in the market will only make things worse.
“These plans are used to volatile markets and one bad year in itself would not be a problem,” Haveman said. “But if you are already underfunded, a bad year is going to hurt.”
State Auditor Julie Blaha, a member of the State Board of Investments and a former middle school math teacher who will retire with teacher and public employee pensions, said the first thing a state employee asks her when they happen to meet is, “How are things with the pension plan?”
Echoing Schurtz, Blaha tells them their retirement fund is fine because of its size, diversity and long-range planning. “That’s the benefit of having a pension instead of a personal retirement account,” Blaha said. “I feel lucky to have a pension right now.”Yet Blaha said she’s concerned about the majority of Americans who don’t. According to the Congressional Research Service, about 12 million American workers had pensions in 2020, while more than 85 million depended on 401(k)s as their main retirement plan.
She said these individual investors “can’t withstand the uncertainty (in the stock market) forever.”
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