Both of the region? employee pension funds suffered enormous losses from the worldwide stock market crash, with each having its value shrink at least 30 percent due to the upheaval.

The county? pension fund, the larger of the two, saw its value lose more than $2.8 billion to bring its total to about $5.6 billion as of the end of March.

The city? employee pension system also shrank due to the falling markets, losing about $1.4 billion to bring its value to $3.3 billion as of March 31.

As a result of the 33 percent hit to the county? fund during the past year, its retirement board reversed course and cut back in the fund? exposure to hedge funds and a more aggressive equity investment strategy.

The county fund also fired its chief investment officer, David Deutsch, and has been looking for a replacement. Brian White, chief executive of the San Diego County Employees Retirement Association, said the organization received about 130 applications for the CIO position that pays a maximum of $209,000. He said the board should be making a selection within a few weeks.

Dan McAllister, the county? elected treasurer and tax collector and a member of the county retirement board, said virtually all pension funds have experienced losses, it? just a matter of percentage decline.

?robably a lot depends on the contents of the portfolio and, obviously, content does make a difference,?he said. ?f you?e in a higher risk portfolio and the bottom of the market fell out as it did, those will tend to lose more.?p>McAllister said there was no danger that the fund would be unable to meet its obligations to pay some 35,000 current and retired county employees.

City? $1.4B Drop

At the city? pension fund, called the San Diego City Employees?Retirement System, or SDCERS, the stock market fallout resulted in a decrease of $1.4 billion, or 30 percent from March 31, 2008. For the first quarter of this year, the markets rebounded somewhat, but the fund still showed a loss of 6 percent.

Officials with both pension funds said the results should be taken in context, and considered more broadly since markets always fluctuate and investment decisions are made looking at a long-term horizon.

?he system is sound and solvent, and no retiree should worry about their check bouncing,?said David Wescoe, chief executive for SDCERS. He said the city fund pays out between $200 million and $300 million annually in retirement benefits, but the fund has more than 10 times that amount in assets. The city is scheduled to make a $154 million contribution to the fund in July.

White, of the county fund, said his board changed the strategy of investing about a fifth of the fund? assets into more aggressive hedge funds, reducing the exposure to about $500 million. That would mean 9 percent of the $5.6 billion fund is still invested in these vehicles.

Defending Hedge Funds