As the current financial crisis thickens, teachers are worrying about their pensions. According to Fox Memphis, Tennessee’s Shelby County school district, which recently went to a single retirement plan with American International Group Inc., received a deluge of phone calls last week from teachers concerned about AIG’s massive losses. On Tuesday, David Pickler, president of the local school board, assured teachers that “if the worst happens, and AIG files for bankruptcy, our teachers, our policyholders, are still secure.”
The California State Teachers' Retirement System had up to $216 million exposed to the falls of Lehman and AIG, reports bizjournals.com. Oklahoma’s losses with Lehman, according to TradingMarkets.com, totaled $7.3 million. Executive secretary of Oklahoma Teachers’ Retirement System, Tommy Beavers, explained that even if the state lost its entire Lehman Brothers portfolio, teachers would forfeit only 84 cents for every $1,000 in their retirement fund. The diversified portfolio also has investments in AIG, about which Beaver said, “I know the stock was down [Tuesday], but again we have managers watching that real close.”
Overall, school districts and Wall Street officials are telling teachers not to worry. But as stocks have plunged, some losing as much as 90% of their value in just a few days, it should come as no surprise that educators are questioning the health of their retirement savings.