WASHINGTON, April 28 The value of assets in
U.S. state retirement systems fell by $641.3 billion to $2
trillion in 2009, the U.S. Census Bureau said in a report on
Thursday that showed the deep damage done to pension funds by
the financial crisis.
The 24 percent drop followed a loss of $152.2 billion the
The declines came from a $485 billion decrease in earnings
on investments in 2009, after a nearly $440 billion loss in
2008, according to the U.S. Census.
Public pension funds are backed by contributions from
employees and employers and by earnings from investments, which
provide more than half of revenue. This makes retirement
systems, especially ones as large as California's, a force in
The value of the all state funds' assets peaked at $3.2
trillion in 2007 then fell by more than a quarter to $2.8
trillion in 2008, when the financial crisis took hold,
according to the Federal Reserve.
Last week, two public pension fund associations said the
assets held by retirement systems rose to $2.93 trillion in
2010, indicating the worst of the crisis may be over.
While retirement systems can pay for pensions to current
retirees, they are short more than $600 billion for future
benefit payments, a report from the Pew Center on the States
said earlier this week.
Those in the $2.9 trillion U.S. municipal bond market are
worried that the large obligations could affect the
credit-worthiness of many states. On Wednesday, two of the
three major rating agencies raised flags about the fiscal
condition of New Jersey, citing the state's $31 billion public
(Reporting by Lisa Lambert and Chip Barnett in New York;
Editing by Padraic Cassidy)