The Philadelphia Inquirer Loose Change Column.

Byline: Joseph N. DiStefano

Dec. 11--The man in charge of Pennsylvania's biggest pot of public investment dollars is leaving for the private sector.

John C. Lane confirmed Harrisburg rumors yesterday that he has resigned, effective Dec. 20, as chief investment officer of the Pennsylvania Public School Employees Retirement System. He's heading to Rochester, N.Y., to run Eastman Kodak Co.'s $13 billion pension fund.

"The time is right for me. I'm 46. If I'm going to make a change, I want to make it now" before his two young children start school, Lane said. The retirement system's board will meet next month to begin work on choosing a successor.

Lane served 12 years under Govs. Tom Ridge and Robert P. Casey. On his watch, the system -- which pays pensions to 100,000 retirees and builds them for 200,000 active workers -- has tripled its assets to $50 billion, thanks both to the 1990s bull market and to $1 billion a year in subsidies from taxpayers and contributions from teachers.

The system's prosperity has enabled it to reduce what it charges local school districts from almost 20 percent of payroll at the end of the 1980s to 1.1 percent this year. Prospects for another cut next year aren't good, however: The fund lost $5 billion in the 12 months ended June 30 as U.S. and foreign investment markets plunged.

If school districts pay a lot less, schoolteachers pay a bit more than they used to: An average 5.8 percent of their pay went to the pension fund this year, up from 5.3 percent in 1989-90.