ALBANY - New York's pension funds for state workers and teachers face several hundred million dollars in losses from Lehman Brothers' collapse, and both have a large stake in troubled Merrill Lynch & Co., which agreed to a buyout by Bank of America.

Monday's shocks to financial markets affected retirement investments of more than a million state and municipal workers, retirees and beneficiaries, as well as some 400,000 in the teachers' pension system. Both pension funds also have holdings in troubled American International Group Inc.

“We have a lot of exposure in index funds that's going to give us a broad swath of the marketplace,” said Jim Fuchs, spokesman for state Comptroller Thomas DiNapoli, who manages the New York State Common Retirement Fund. “We're evaluating our whole exposure.”

In a prepared statement, DiNapoli said the state workers' pension system remains fully funded and can meet its obligations “today, tomorrow and well into the future.” The fund's diversification across various asset classes served it well through the 2000-2003 market downturn where it lost $31 billion but was able to recover in less than two years, he said.

“Many of these stocks, when you look at total value of our fund, represent a fraction of a percent overall,” Fuchs said Tuesday. “Clearly it's something we're concerned about. We'll make adjustments accordingly.”

However, as a large institutional investor, not day traders, they look at longer-term performance goals, and that doesn't usually lead to a lot of immediate adjustments, Fuchs said. He declined to comment on the fund's strategy in response to Monday's setbacks on Wall Street.

The fund had $153.9 billion in investments on March 30, the end of its last fiscal year, when it returned 2.56 percent on investment, with 70 percent of its holdings in equities, according to an overview from the comptroller's office. It had 5 million shares of Lehman Brothers Holdings Inc. Monday, Fuchs said.

Lehman shares ended Monday at 21 cents a share, down from $67.73 just 10 months ago. The plunge wiped out more than $35 billion in shareholder wealth. Common shareholders all but get wiped out when a company files for Chapter 11 bankruptcy protection as Lehman Brothers did.

The fund had half as many Lehman shares 18 months ago, 2.3 million for which it had paid $84 million, which was worth $161 million on March 31, 2007, according to the most recent annual report available. The detailed 2007-2008 report is still under internal review, Fuchs said.

When the Lehman Brothers share price was $19.81 on June 30, the New York State Teachers' Retirement System reported owning 2.14 million shares worth $42.42 million. Its Lehman Brothers senior unsecured bond exposure totaled $58.1 million. The fund also had a $76 million investment in a real estate mezzanine debt fund, spokesman John Cardillo said.

With about $100 billion in assets for 400,000 members and beneficiaries, it reported an overall return on investment of 19.3 percent for the fiscal year that ended June 30, 2007.

Cardillo said they don't measure daily gains or losses such as Monday's, and the asset allocation and fund's overall structure “are continuously reviewed and adjusted.”

The teachers' retirement fund on June 30 also reported owning 2.69 million Merrill Lynch shares, for which it had paid $39.61 million, and which was worth $85.36 million at $31.71 a share.

Merrill Lynch shares have traded between $16.60 and $78.66 in the past 12 months. Shares ended up a penny at $17.06 Monday.

As of June 30, the teachers retirement fund had Merrill Lynch fixed income holdings of $106.1 million, Cardillo said. It also had AIG fixed income holdings of about $39.4 million and stock worth about $210.7 million.

The state workers' pension fund as of Sept. 12 owned 6.2 million shares of Merrill Lynch and 10.8 million shares of AIG, Fuchs said. The fund 18 months earlier reported owning 4 million shares of Merrill Lynch, for which it had paid $167.48 million, which was worth $326.95 million on March 31, 2007.