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Financial turmoil abroad affects state investments

CHARLESTON, W.Va. — Turmoil in Greece and in the Chinese stock market meant a tough month for state investments in June, resulting in state pension funds closing out the budget year June 30 with only about 1.5 to 2 percent growth, the state Investment Management Board’s executive director told the Consolidated Public Retirement Board Wednesday.

“Just a lot of negativity and, I think, fear hit the market pretty hard,” Craig Slaughter said of the debt crisis in Greece and a sharp downturn in the Chinese stock market. “Some of that has been resolved since, and we’ve started to see the market come back, but it doesn’t help the [2014-15 budget] year.”

Legislation adopted in the 1990s to keep state pension funds solvent for state and public school employees requires that state pension fund investments grow by 7.5 percent a year over the long term.

“Obviously, we’re going to be short of the target, but as you all know, it’s a long-term target, and we think we’re still in the ballpark,” Slaughter told board members.

Through April, before events in Greece and China made investors skittish, the pension funds had seen one-year growth of 8.3 percent, according to IMB records.

At the time, the five-year performance of IMB investments was 9.9 percent for the Public Employees Retirement System, and 9.8 percent for the Teachers Retirement System, those records show.

While IMB investments struggled in the 2014-15 budget year, they boomed in 2013-14, experiencing 17.9 percent growth…

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