Some fear that unless the market settles, local governments and schools could face increases in employer contributions to offset pension losses, which could increase pressure to raise taxes.

The last time the stock market was roiled by the volatility that it has been experiencing recently was the beginning of the 2008 recession, which left the massive state pension system bruised and turning to local property taxes to make up for losses.

Some experts fear that unless the current stock market settles, local governments, schools and their taxpayers could face another increase in employer contributions such as the 37 percent hike ordered in 2010 by the state comptroller to offset stock market losses. That translated to $400 million more from taxpayers statewide in 2012 alone to the state pension fund.

The state constitution guarantees that the pension of a public sector worker can’t be reduced or taken away and so taxpayers must help make up any losses. That differs from private-sector workers with company-provided pensions, which can be reduced or eliminated by employers.

The Dow Jones Industrial Average hit 15 historic highs during 2018 fueled by an economic recovery that turned into an expansion and by President Donald Trump’s tax cuts for corporations and most middle-class families. But high times turned chaotic: The Standard & Poor’s 500 index was down 9 percent in December, the worst December since the Great Depression in the 1930s, and the Dow ended the year down 5.6 percent, the worst performance since 2008. On Thursday, for example, the Dow fell 660 points; on Friday it rose nearly 747 points.

In addition to concerns about the state pension system, thousands of public workers who also chose to invest in an additional supplementary retirement account called the state Deferred Compensation Plan could lose money because it doesn’t compensate for Wall Street losses. Workers who take out these accounts, which are similar to 401(k) accounts for private sector workers, defer some of their wages until they retire, when they presumably would be taxed at a lower rate.

Read more @Newsday