Public Pension Systems’ Investment Earnings Exceed Pre-Recession Peak for First Time

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Public pension systems showed positive earnings on investments for the second consecutive year in 2011 and exceeded pre-recession levels for the first time, the Census Bureau said Thursday.

Earnings on investments in 2011, the most recent year for which data is available, totaled $479.6 billion, a 38.6% increase from the 2010 earnings of $346.1 billion, according to the Census Bureau’s annual survey of public pensions.

The 2011 earnings exceeded pre-market downturn levels, which peaked at $471 billion in 2007 before the Great Recession in 2008. Earning on investment losses totaled $613.5 billion in 2009 and $73.9 billion in 2008.

Total cash and investment holdings for state and locally administered pension systems rose 13.2% to $3 trillion in 2011 from $2.7 trillion in 2010. Total holdings and investments consist of cash and short-term investments, governmental securities, nongovernmental securities and other investments.

State-administered pension systems had $2.5 trillion in total holdings and investments in 2011 while locally-administered systems had $483.9 billion.

Corporate stocks, foreign and international securities and corporate bonds were the three largest investment categories comprising of nearly two-thirds of the total holdings for all pension systems in 2011. Most investment categories increased from 2010 to 2011 except for corporate bonds, federal agency securities and funds held in trust.

Six states had the largest amounts of total cash and investment holdings in 2011 including California with $600 billion, New York with $319.3 billion, Texas with $192.6 billion, Florida with $157.8 billion, Ohio with $152.4 billion and Illinois with $127.7 billion.

Revenue for state and locally administered pension systems totaled $616.1 billion in 2011, with earnings on investments comprising the vast majority of total revenue, at 77.8%.

Total contributions for state and local pension systems increased 8.7% to $136.5 billion in 2011 from $125.5 billion the previous year. Contributions consist of employee and government contributions. Employee contributions increased 3.1% to $40.3 billion in 2011 from $39.1 billion in 2010. Government contributions increased 11.3% to $96.2 billion in 2011 from $86.4 billion the previous year.

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