(Host) State Treasurer James Douglas says Vermont’s three pension funds have lost roughly $4 million because of investments in Enron. But Douglas says recent gains in these funds far outweigh the Enron loss.
Douglas says most states had some pension money invested in Enron – a Texas-based energy company that recently filed for bankruptcy.
Douglas says the $4 million loss in the state employee, municipal employee and teachers’ retirement funds will be offset. There was a $110 million gain in these accounts during the last quarter of 2001.
Douglas says the state’s exposure to Enron was limited because Vermont’s pension funds are invested in a highly diversified portfolio:
(Douglas) “The key, as we have practiced in the years I have been treasurer, is to diversify and make sure that we don’t have all our eggs in one basket. We buy a broad range of stocks, bonds of all different sizes and markets. And as long as we diversify broadly, we’ll protect against situations like this having a major impact on the fund.”
(Host) Of all the New England state pension funds, only Rhode Island was unaffected by the Enron scandal because officials in that state sold off all their Enron stock before the company collapsed.