SAN DIEGO — A California public employees’ pension fund that lost more than $100 million in the collapse of a major hedge fund, Amaranth Advisors LLC, announced yesterday that it has retained legal counsel to consider bringing a lawsuit over the loss.

Following a closed board meeting yesterday morning, the chairman of the San Diego County Employees Retirement Association, David Myers, said a securities and class-action law firm with offices in New York and San Diego, Bernstein Litowitz Berger & Grossmann LLP, will conduct a broad investigation into who was responsible for the Amaranth implosion.

“Bernstein Litowitz has been directed to explore the viability of all potential options,” Mr. Myers said.

Amaranth’s fortunes headed south last month after a complex series of bets on increasing natural gas prices was undercut by declines in energy costs. In the course of two weeks, about $9 billion in assets under management by the Greenwich, Conn.-based fund dwindled to roughly $3 billion.The San Diego pension fund said its $175 million Amaranth investment, which was valued at $234 million in June, is now estimated to be worth only $70 million.

The retirement fund initially estimated its Amaranth-related loss at $45 million, then revised the figure upward to $87 million, and, most recently, $105 million.The rapidly spiraling figures caused jitters and some panic among retired San Diego County employees, according to Dorothy Sloter, a former court reporter who heads the retirees’ association.

“They’re very concerned. They’re concerned about their retirement, and the security of their pensions,” Ms. Sloter said. “They’re panicking because of the media reaction. There’s been a lot overdone.”

Ms. Sloter said the press attention was excessive because the San Diego pension fund as a whole has performed well over time. In the year ending June 30, the fund was up 14.7%. Since then, the retirement pool grew by $331 million to $7.6 billion, according to figures the board released yesterday.

To assuage some of the public concern, the pension board held an unusual seminar yesterday on the basics of hedge fund investing. For more than three hours, members of the public, including as many as two dozen retirees, sat through a crash course on the subject from the pension fund’s chief investment officer, David Deutsch, and a professor at the Yale School of Management, William Goetzman.

While there was a surfeit of detail about the risks and returns offered by hedge funds, there was precious little in the way of explanation for how the Amaranth debacle came to pass. Messrs. Deutsch and Goetzman spoke at length about “red flags” that could alert pension managers to hedge fund troubles, but neither explained whether or how such warning signs were missed with Amaranth.

Mr. Deutsch vaguely hinted at some fraud on the part of Amaranth when he said that some funds “are not as diversified as they say they are.” He did not elaborate.

Most of the losses at Amaranth have been attributed to a single energy trader, Brian Hunter, 32. So far, the hedge fund has given no indication that its management was unaware of Mr. Hunter’s trading.

The only member of the public to urge yesterday the board that it dump its hedge fund investments was Lani Lutar, of the San Diego County Taxpayers Association.

“Would you invest 20% of your money in hedge funds and if not why would you continue to put other people’s money, taxpayer funds at risk?” she asked the board. Under state rules, the county’s contribution to the retirement fund usually increases if the portfolio performs poorly.

Ms. Lutar initially balked at suggesting what level of hedge fund investment would be responsible, though she eventually suggested between zero and 1%.

Mr. Deutsch said the lack of a clear definition of what constitutes a hedge fund has led to public confusion about the exposure of the pension fund he manages. He said only about 6% of the retirement fund was devoted to volatile, “multi-strategy” hedge funds, while about 12% was allocated to less volatile funds.

Mr. Goetzman said it was his view that, on average, hedge funds were probably less volatile than stock market funds like those that track the S&P 500 Index. However, he said some experts in the field are anticipating a “fire or ice” shakeout of the industry.

“There are these two scenarios: some kind of crisis, or just a drying up and a freezing up,” Mr. Goetzman said. The “fire” would involve a wave of collapsing funds, while the “ice” would be the result of diminishing returns caused by too many hedge fund players trying to pursue the same investment strategies.

One challenge to monitoring hedge funds is that many, including Amaranth, do not provide detailed information on their holdings, even to investors. Mr. Deutsch said one way to compensate for the lack of transparency is to track as many as 150 indicators that can signal problems at a hedge fund.

One pension board member, Douglas Rose, said that could hamstring good hedge fund managers. “At some point you get to paralysis, if you consider every red flag out there,” he said.

The San Diego pension fund’s loss is believed to be among the largest in the Amaranth collapse, though hedge funds are largely unregulated and do not have to make public the identities of investors. Identifying the investor with the largest loss is critical for plaintiffs’ law firms, such as Bernstein Litowitz, because under federal law the firm representing the largest investor has a near lock on being appointed lead counsel in a potential class action lawsuit.

Mr. Myers said the board conducted a search before selecting Bernstein Litowitz.

The San Diego County pension fund is separate from the San Diego City retirement pool, which federal prosecutors contend was ripped off by corrupt officials.