State Pension Assets Rose Nearly $325B Last Year

The Census Bureau’s “2011 Annual Survey of Public Pensions: State-Administered Defined Benefit Data” reports the nation’s state-administered defined benefit retirement systems had $2.5 trillion in cash and investment holdings in 2011, a 14.6% increase from $2.2 trillion in 2010. Earnings on investments were $410.6 billion, up from $291.1 billion in 2010.

Cash and Security Investment Holdings  

Corporate stocks increased 13.8%, from $767.1 billion in 2010 to $873.2 billion in 2011 (and comprised 34.3% of total holdings in 2011). Corporate bonds decreased 2.1%, from $357 billion in 2010 to $349.7 billion in 2011 (and comprised 13.8% of total holdings in 2011).

Among the cash and security holdings for public pensions, foreign and international securities increased 24.1%, from $359.4 billion in 2010 to $446 billion in 2011 (and comprised 17.5% of total holdings in 2011). Federal government securities increased 7.4%, from $192.3 billion in 2010 to $206.6 billion in 2011 (and comprised 8.1% of total holdings in 2011).

Cash and short-term investments increased 36.4%, from $78.7 billion to $107.3 billion (and comprised 4.2% of total holdings in 2011). Real property increased 28.6%, from $83.3 billion in 2010 to $107.1 billion in 2011 (and comprised 4.2% of total holdings in 2011).

Nongovernmental securities (e.g., corporate stocks and bonds, foreign and international securities, funds held in trust, and mortgages) were $1.8 trillion in 2011, a 12.1% increase from 2010. Nongovernmental securities comprised 72% of total cash and security holdings.  

Receipts  

Total revenue increased 32.8%, from $389 billion in 2010 to $516.5 billion in 2011. The increase was driven by the rise of earnings on investments, which showed gains of $410.6 billion in 2011. Earnings on investments comprised 79.5% of total revenue, government contributions comprised 13.9%, and employee contributions accounted for the remaining 6.6% of total revenue in 2011. Government contributions increased 10.7%, from $64.8 billion in 2010 to $71.7 billion in 2011. Employee contributions increased 3%, from $33.2 billion in 2010 to $34.2 billion in 2011.

Payments  

Covered payroll -- payments made to active employees on which contributions to a pension plan are based -- increased 0.3% from $596.2 billion in 2010 to $598 billion in 2011. Pension obligations increased 3.7%, from $3.3 trillion in 2010 to $3.4 trillion in 2011.

Total payments increased 8.5%, from $174.2 billion in 2010 to $189 billion in 2011. The increase in total payments was driven by an increase in benefit payments, which comprised 93.6% of total payments in 2011. Benefit payments increased 8.2%, from $163.4 billion in 2010 to $176.8 billion in 2011.

The report show statistics for individual retirement systems and for aggregate national and state levels. The structure of retirement systems varies widely among states. In some jurisdictions, state and local government employees are vested in a small number of statewide systems.

The report is available here.