Public Pension Systems Recovering from Downturn

November 11, 2009 ( – Public pension funds in Hawaii and North Carolina are steadily recovering from investment losses of the past year.

Trustees for the Hawaii Employees’ Retirement System were told the value of the portfolio increased by $945 million during the third quarter, according to the Associated Press. That follows a nearly $700 million gain in the three months ended June 30.

The North Carolina pension system’s investment portfolio posted a 10.4% return for the quarter ending September 30, the Business Journal of the Greater Triad reports. Pension fund assets were at $65.8 billion, an increase from the $60.2 billion reported June 30. The fund’s year-to-date return is at 12.26%.

As of the end of September, the pension fund for Hawaii’s state and county workers stood at about $9.8 billion – $108 million less than a year ago, according to Neil Rue, a managing director of ERS adviser Pension Consulting Alliance Inc., the news report said. ERS Chief Investment Officer Rod June said the third quarter was probably one of the best quarters the fund has seen in years.

Cowell cites the rebounding stock market as the key factor in the North Carolina system’s upswing. The investments that make up nearly 90% of the fund’s portfolio, stocks and bonds, returned 17.6% and 5.8% for the quarter, respectively. However, real estate returns were down 7.9% for the quarter and 31.36% year-to-date.

While North Carolina’s pension assets have rebounded, the fund is still far below the 2007 peak value of $77 billion. “[W]e remain focused on managing risk and creating value for the long term,” Cowell said, according to the Business Journal.