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With Many Pensions Under-Funded, Bristol’s Is Over-Funded . . . by $370 Million

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BRISTOL, Conn. (AP) _ Bristol’s pension plan is so flush with cash it’s considering investing a few hundred thousand dollars in companies to boost economic development.

The central Connecticut city’s pension liabilities total $210 million, T.J. Barnes, chairman of the city’s Retirement Board and the city’s treasurer, said Friday. That’s less than half the city’s pension fund of about $580 million, he said.

What Barnes called “one of the best funded pension plans in the state or country” contrasts with many companies that have halted pension contributions to save money and some states that are seeking greater employee contributions to strengthen pension plans.

Bristol officials are considering investing about $600,000 in companies that move to Bristol, or 1 percent of $60 million in so-called alternative investments such as private equity and direct real estate investments, he said.

The Bristol Press first reported that city officials are considering such a move.

Bristol, with a population of about 60,500, would invest money in companies, buying stock or otherwise obtaining a stake that could eventually pay off.

“We want to make investments as an investor rather than as a government entity giving away money,” Barnes said.

The first move would be to hire consultants who vet potential companies to receive city investments, he said. The process could start in about two months, he said.

Barnes credits Bristol’s success building up its pension fund to two factors. The city started early, in 1978, allowing it to take advantage of stock market run-ups in the 1980s and 1990s, Barnes said.

The pension fund also has made strategic moves, such as selling stock in real estate in 2007 before the sector’s collapse and turning to more conservative investments, he said.

“We’re not the norm. We’re definitely the exception here in Bristol,” Barnes said.

Numerous states and municipalities are finding obstacles in their efforts to fund pensions. They have relied too often on the stock market –which rebounded only recently– to fatten retirement fund investments. In addition, state and municipal governments have lost tax revenue because of a long period of high unemployment.

“If Bristol has a good funding position they are the outlier,” said Charles Salmans, a spokesman for Mercer, a human resource consulting firm that tracks corporate pensions.

(Copyright 2012 by The Associated Press.  All Rights Reserved.)

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