Tags: Public Pensions | Taxpayer | Dollars | Foreign Securities

Where Public Pensions Put Taxpayer Dollars: Into Foreign Securities

By    |   Friday, 28 March 2014 11:04 AM

Public employee pension plans in the United States have hit an all-time high of almost $3.2 trillion in assets, and they have more than twice as much money tied up in foreign securities as they do in U.S. government's own bonds, according to official data.

The information is contained in a U.S. Census Bureau analysis of 2013 assets in the 100 largest public pension systems in the U.S.

Public pensions -- which have sizable matches of taxpayer money put into them for the retirement of government workers -- hit their highest levels last year since the Census Bureau began keeping records in 1968.

Editor's Note: 38 Investments That Profit 96% of the Time (Free Video)

In fact, government contributions comprised 72.7 percent and employee contributions comprised 27.3 percent of total contributions in the fourth quarter of 2013.

Public pensions had a good performance in 2013, enjoying a 12.5 percent return that most American would probably be happy with in their own 401(k)s and IRAs.

The Census Bureau detailed how the assets are deployed in the nation’s public pension funds – 35.1 percent in corporate stocks, 10.6 percent in corporate bonds, 8.4 percent in U.S. government bonds and – 20.9 percent in “international securities,” i.e. in the stocks and debt of other countries.

In other words, taxpayer dollars are used to buy foreign stocks and foreign debt to fund the retirement of public employees, and at a rate that is much higher (20.9 percent vs. 8.4 percent) than is being spent to buy U.S. government’s own bonds to fund the retirement of public employees.

24/7 Wall St, which uncovered the Census Bureau data, reported: “The long and short of the matter is that U.S. public pension systems have 2.5 times as much tied up in international securities than they do in U.S. government bonds. Do the politicos realize this? Remember that these are public worker pensions; i.e. government employees.

A recent op-ed column in The Boston Globe concludes that “public pensions are eating taxpayers alive.”

“Around the country governments are facing a tidal wave of pension obligations that they haven’t figured out how to pay for. By some estimates, the states’ long-term unfunded pension liabilities add up to more than $4 trillion,” the Globe reported.

“There is no way to meet such a staggering financial burden without sacrificing more and more of the basic services — public safety, education, roads, and infrastructure — that governments are formed to provide.

Government contributions to employee contributions had a 2.7 to 1 ratio this quarter—government contributions comprised 72.7 percent and employee contributions comprised 27.3 percent of total contributions.

Editor's Note: 38 Investments That Profit 96% of the Time (Free Video)

© 2019 Newsmax Finance. All rights reserved.

   
1Like our page
2Share
StreetTalk
Public employee pension plans in the United States have hit an all-time high of almost $3.2 trillion in assets, and they have more than twice as much money tied up in foreign securities as they do in U.S. government's own bonds, according to official data.
Public Pensions,Taxpayer,Dollars,Foreign Securities
445
2014-04-28
Friday, 28 March 2014 11:04 AM
Newsmax Media, Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved