Tags: Public | Pensions | First | Fiscal-Year | Gain

Public Pensions Have First Fiscal-Year Gain Since 2007

Wednesday, 13 Oct 2010 12:55 PM

Holdings of the 100 largest U.S. public-employee retirement systems rose 6.8 percent for the 12 months through June, the first fiscal-year gain since 2007, a U.S. Census Bureau report shows.

The state and local government funds held $2.35 trillion as of June 30, up from $2.2 trillion a year earlier. They remain below their peak value of $2.93 trillion at the end of 2007, the Census Bureau said in a report released on its website today.

Benefits paid from the funds, which account for about 89 percent of financial activity among all public retirement funds, totaled about $176 billion, a 7.8 percent increase from a year earlier, according to the report.

The funds lost a total of $58.6 billion on their investments during the second quarter, the most since the final three months of 2008, according to the report.

Domestic corporate stocks performed worst of all asset classes during the quarter, losing 13.6 percent from the prior three months, according to the report. Mortgages, which rose 5.5 percent, and federal government securities, with a 1.7 percent increase, were the only asset classes to post gains, according to the Census Bureau.

U.S. stocks were the largest holdings among the funds, composing about 31 percent of assets, the report said.

Of the 50 state retirement systems, fewer than half had assets to pay for 80 percent of promised benefits in their 2009 fiscal years, according to data compiled by Bloomberg.

Mounting pension liabilities threaten “the ability of state and local governments to operate,” economists Joshua Rauh of the Kellogg School of Management at Northwestern University and Robert Novy-Marx of the University of Rochester wrote in a study of city and county retirement systems released Oct. 12.

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Holdings of the 100 largest U.S. public-employee retirement systems rose 6.8 percent for the 12 months through June, the first fiscal-year gain since 2007, a U.S. Census Bureau report shows. The state and local government funds held $2.35 trillion as of June 30, up from...
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Wednesday, 13 Oct 2010 12:55 PM
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