Large Public Pension Funds see 6.2% Q3 Asset Hike

December 30, 2010 (PLANSPONSOR.com) – Total holdings and investments for the 100 largest public-employee retirement systems were up 6.2% in the third quarter to $2.5 billion, the U.S. Census Bureau reported.

The Census Bureau said in a research report that the Q3 showing compares to a 6.2% decline for the previous quarter.

According to the Census Bureau report, corporate stocks showed a quarterly increase of 9.8%, from $727.2 billion in the second quarter of 2010 to $798.3 billion in the third quarter of 2010. However, corporate stocks demonstrated a yearly decrease of 2.9%, falling from $822.4 billion in the third quarter of 2009 and showing the first year-to-year decline since 2009:Q3. Corporate stocks comprised just under a third (32% for 2010:Q3) of the total cash and security holdings of major public-employee retirement systems.

Meanwhile, corporate bonds showed the first quarter-to-quarter increase since 2009:Q3, rising 3.2% from $414.1 billion in the second quarter of 2010 to $427.3 billion in the third quarter of 2010. However, corporate bonds had the first year-to-year decrease since 2009:Q3, fall­ing 1.4% from $433.3 billion in the same quarter one year ago (2009:Q3). Corporate bonds comprised just over a sixth (17.1% for 2010:Q3) of the total cash and security holdings of major public-employee retirement systems.

Census Bureau data showed international securities reached the highest level in over two years (since 2008:Q2), rising 13.9% from $396.5 billion in the second quarter of 2010 to $451.6 billion in the third quarter of 2010. They showed a year-to-year increase for the fourth consecu­tive quarter, rising 22.2% from $369.6 billion in the same quarter one year ago (2009:Q3). International securities comprised 18.1% of the total cash and security holdings of major public-employee retirement systems for 2010:Q3. This was the highest percentage distribution for international securities since the begin­ning of this investment category’s data collection eight years ago, starting with the fourth quarter of 2002.

Finally, the Census Bureau report showed that employee and government contributions totaled $24.7 billion in the third quarter of 2010, a decrease of 6.8% from $26.5 billion last year (2009:Q3). Employee contributions comprised 28.4% ($7 billion) of the total contributions, and govern­ment contributions comprised 71.6% ($17.7 billion) of the total contributions in the third quarter of 2010.

The survey consists of a panel of 100 retirement systems, which comprise 89.4% of financial activity among such entities, based on the 2007 Census of Governments. More information about the Census Bureau data is in an information sheet and at http://www.census.gov/govs/qpr/ .

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