Public Pension Assets Increase More Than $257 Billion

Public Pension Assets Increase More Than $257 Billion for State and Local Public-Employee Retirement Systems in 2010

All American Investor

The nation’s state and local public-employee retirement systems had $2.7 trillion in total cash and investment holdings in 2010, a $257.2 billion or 10.6 percent increase from $2.4 trillion in 2009, according to new statistics from the U.S. Census Bureau.

This follows a $722.2 billion loss the previous year.

These statistics come from the 2010 Annual Survey of Public-Employee Retirement Systems, which provides an annual look at the financial activity and membership information of the nation’s state and local public-employee retirement systems, including revenues, expenditures, investment holdings, and number of retirement systems and beneficiaries

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Receipts

There were $346.1 billion in earnings on investments in 2010, compared with prior year losses totaling $621.1 billion. This was the first year showing positive earnings since 2007. Retirement systems have substantial investments in financial markets and consequently earnings are dependent on changes in market performance.

Employee contributions decreased by 0.5 percent, from $39.3 billion in 2009 to $39.1 billion in 2010. Government contributions increased by 1.5 percent, from $85.2 billion in 2009 to $86.4 billion in 2010. Employee contributions comprised 31.2 percent and government contributions comprised 68.8 percent of total contributions.

Payments

Total payments increased by 6.0 percent, from $201.7 billion in 2009 to $213.8 billion in 2010. Payments consist of benefits, withdrawals and other payments.

Benefits increased by 6.4 percent, from $188.9 billion in 2009 to $201.0 billion in 2010. Benefit payments comprised 94.0 percent of total payments.

Cash and Investment Holdings

Most investment categories showed increases, with decreases in only cash and short-term investments, mortgages and real property. These three categories comprised 7.9 percent of total holdings.

Corporate stocks rose by 13.4 percent, from $820.2 billion in 2009 to $930.2 billion in 2010. Corporate stocks comprised 34.8 percent of total holdings. Corporate bonds increased by 2.8 percent, from $413.1 billion in 2009 to $424.9 billion in 2010. Foreign and international securities increased by 13.8 percent, from $370.8 billion in 2009 to $421.9 billion in 2010. Corporate stocks and bonds and foreign and international securities comprised two-thirds of total holdings at 66.4 percent in 2010.

Governmental securities (which include U.S. Treasury) increased by 7.8 percent, from $215.2 billion in 2009 to $232.0 billion in 2010. Governmental securities comprised 8.7 percent of total holdings.

Statistics are shown for revenues, expenditures, cash and investments, and membership information by national, state and local levels, in addition to a national summary table.

For more information, go to  http://www.census.gov/govs/retire

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The estimates in this report are subject to sampling error. All comparisons in the report have been tested and found to be statistically significant at the 90 percent confidence level.

The Internet tables are from the Annual Survey of Public-Employee Retirement Systems for fiscal year 2010. The statistics in these tables are from a sample of public-employee retirement systems and are subject to sampling variability. Additionally, the data are subject to coverage, response, and processing errors as well as errors of nonresponse. For more information on the data limitations, definitions, and methodology, see http://www.census.gov/govs/retire/how_data_collected.html .

For more information on realized and unrealized gains/losses, see Section 7.2.2, Measurement Issues: Valuation, of the 2006 Government Finance and Employment Classification Manual at http://www.census.gov/govs/classification .

Original content Bob DeMarco, All American Investor