WASHINGTON — State and local public employee retirement systems’ investment holdings rose 10.6%, or $257.2 billion, to $2.7 trillion in 2010, after two consecutive years of losses, according to a new Census Bureau report released Monday.

The $2.7 trillion gain in total cash and investment holdings followed a $722.2 billion loss the previous year. The report, the 2010 Annual Survey of Public Employee Retirement Systems, reviewed financial activity and membership information of state and local public employee retirement systems, including revenues, expenditures, investment holdings and the number of retirement systems and beneficiaries.

The states with the largest total amounts of holdings and investments were California, New York and Texas, with $516.1 billion, $302.3 billion and $174.7 billion, respectively.

Total holdings and investments consist of cash and short-term investments, governmental and nongovernmental securities and other investments such as real property.

Most investment categories showed increases, with decreases in only cash and short-term investments, mortgages and real property, the report said. The most notable decline was with mortgage investments which saw a 16.3% decrease to $10 billion in 2010 from $12 billion in 2009.

Earnings on investments totaled $346.1 billion in 2010, compared with losses of $621.1 billion in 2009. The year 2010 was the first time investments have shown positive earnings since 2007, according to the report.

Employee contributions decreased by 0.5% to $39.1 billion in 2010 from $39.3 billion in 2009, while government contributions increased by 1.5% to $86.4 billion in 2010 from $85.2 billion in 2009, the report found.

Employee contributions made up 31.2% and government contributions were 68.8% of the total amount.

Total payments, which consist of benefits, withdrawals and other payments, increased by 6% to $213.8 billion in 2010 from $207.1 billion in 2009. The increase in total payments was driven by an increase in benefits payments which comprised 94% of total payments in 2010, said Erika Becker-Medina, author of the report. 

Benefits increased by 6.4 to $201.0 billion in 2010 from $188.9 billion in 2009.

The average annual benefit, total benefit payments divided by the number of beneficiaries, was $25,925 in 2010.

Connecticut had the highest average annual benefit payment from state-administered pensions at $38,032. Tennessee had the lowest average annual benefit payment at $14,340, according to the report. 

The Census report comes as a handful of municipalities, including Providence, R.I., are in the process of overhauling their unfunded public pension liabilities. Providence has $561 billion of debt outstanding and was only able to fund 34% of its pension liabilities last year, The Bond Buyer reported Monday.

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