U.S. public pensions end bumpy second quarter with losses

Sept 27 Thu Sep 27, 2012 5:04pm EDT

Sept 27 (Reuters) - Coming off a best-ever quarterly performance, pension funds for U.S. state and local government workers were stung in April, May and June by sagging global stock markets. The funds recorded losses of $14.2 billion for the second quarter, the U.S. Census Bureau said on Thursday.

In contrast, America's largest public pensions earned $179.3 billion during 2012's first quarter, according to Census Bureau data.

The holdings of America's 100 largest public pensions - stocks, bonds and other assets - slid 2 percent in value to $2.718 trillion on June 30, compared with a year earlier.

U.S. taxpayers worry that commitments made to public employees for retirement benefits may absorb bigger slices of public funds as local and state governments weather America's slowly growing economy. States and local governments face unfunded pension liabilities of $750 billion or more, depending on estimates.

Global stock markets had a rough second quarter as worries about euro-zone finances rattled equity investors after strong gains in early 2012. The Standard & Poor's 500 Index fell 3.3 percent in the second quarter.

Asian, European and emerging markets' benchmark stock indexes posted steeper losses in the second quarter, even as U.S. Treasuries gained on buying by anxious global investors.

In the second quarter, states as well as city, county and other local governments throttled back on pension contributions, which totaled $21.36 billion - down from $24.1 billion in the first quarter, Census Bureau data showed. In 2011's second quarter, government contributions were $22.5 billion.

In contrast, employee contributions to pension funds rose from the first quarter's $9.3 billion to $10.3 billion in the second quarter. Employee payments to the pensions were $10.9 billion in 2011's second quarter, according to the Census data.

Census Bureau data is based on the 100 largest public-employee retirement systems.

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