| WASHINGTON, March 27
WASHINGTON, March 27 U.S. public pensions
enjoyed a banner year in 2013, as rising investment returns and
increasing government contributions pushed their holdings to
record highs, U.S. Census data showed on Thursday.
Public pensions ended the fourth quarter with $3.192
trillion in cash and security holdings, the highest level since
the Census began collecting data in 1968. That was 4.2 percent
more than in the third quarter and 12.5 percent more than in the
same quarter of 2012.
In each quarter of 2013, pension assets hit new records due
to a rising stock market, allowing retirement systems to close
some of the funding holes caused by the financial crisis.
Investment earnings provide the bulk of retirement systems'
revenues and nearly two-thirds of their portfolios are allocated
The retirement systems' stock holdings reached $1.121
trillion in the fourth quarter, 5.9 percent higher than the
previous quarter and 18.1 percent more than in the final quarter
of 2012, Census data shows.
Likewise, international securities hit $665.9 billion, a 4.4
percent rise from the third quarter and a 14.2 percent increase
from the fourth quarter of 2012.
Meanwhile, corporate bonds were $337 billion and Treasuries
were $267 billion in the fourth quarter, according to the Census
The financial performance has been stronger than anticipated
and over the last two years, pensions' earnings have outstripped
projections. Earnings in the fourth quarter, $165.71 billion,
were the highest since $170.73 billion in the first quarter of
2012. They were also three times the $62.09 billion earned a
For years, many states short-changed their public pensions,
putting in far less than actuaries suggested, and then cut
further during the 2007-09 recession when their revenues
crumbled. At the same time, the financial crisis ravaged
From coast to coast, battles have erupted over whether
states have enough money to pay promised benefits, especially
now that the first wave of the Baby Boom population is retiring.
While the investment windfall has helped, some retirement
systems still face large funding gaps.
The Census data showed governments are now putting more
money into retirement systems, with their total contributions
reaching a record $27.58 billion in the final quarter.
Government contributions, essentially the taxpayer tab, were
23.9 percent more than in the third quarter and 4.4 percent more
than the fourth quarter of 2012.
Employee contributions have remained steady, even though
the public workforce suffered dramatic layoffs and cuts over the
last half decade. They reached $10.36 billion in the fourth
quarter, the most since the middle of 2012. That was 25.5
percent more than the previous quarter, but only 0.8 percent
higher than the same period the year before.
Meanwhile, payments to retirees rose, but were below the
peak they hit earlier in 2013. From the third quarter they
increased 0.6 percent to $59.3 billion. That was 5.9 percent
more than a year earlier.
(Editing by Bernadette Baum)