|
 The cash and security holdings for the 100 largest public-employee
retirement systems in the country, representing almost all public
pensions, reached $3.06 trillion in the third quarter of 2013, a 9.8
percent rise from the same quarter in 2012 and a 4 percent increase
from the previous quarter.
Investments provide the lion's share of public pension revenues, and
retirement systems are reaping the benefits of the stock market's
gangbuster performance this year. The benchmark Standard & Poor's
500 Index <.SPX> has delivered a total return, including reinvested
dividends, of 29.6 percent so far this year, putting it on pace for
its best year since 1997. Through the third quarter, its total
return was 19.8 percent.
Corporate stocks, making up about a third of pension holdings, hit
$1.06 trillion in the quarter, 11.4 percent more than in the third
quarter of 2012 and 3.8 percent more than the prior quarter.
International securities, a much smaller pool, rose 16.6 percent
over the year to $637.8 billion.
Altogether, the pensions' investment earnings totaled $120.13
billion in the three months that ended on September 30, the largest
quarterly gain since the first quarter of 2012.
During the 2007-09 recession, the financial crisis caused pension
investments to crumble just as states confronting collapsing
revenues cut their pension contributions and laid off employees.
Pensions have slowly marched back to health since holdings reached a
low of $2.1 trillion in 2009.
For the first three quarters of this year pension holdings have hit
record highs.
Still, the pensions' fixed-income performance has been mixed. Bonds
have been lagging in recent months over concerns about the future of
the Federal Reserve's massive bond-buying stimulus program, which
the central bank said on Wednesday it would begin reducing in
January.
In the third quarter corporate bond holdings were $323.2 billion,
moderately higher than the second quarter's $321.5 billion but 7.1
percent lower than $347.8 billion in the third quarter of 2012.
[to top of second column] |
Treasury holdings fell 0.2 percent from the second quarter to $265.7
billion, but rose 8.1 percent from the third quarter of 2012.
Governments across the country have reformed pension policies in the
aftermath of the funding crisis. Some began making the full
contributions that their actuaries suggest. Others have had
employees pitch in more, raised retirement ages, and cut annual cost
of living adjustments to benefits.
Governments, essentially the taxpayers, put $22.2 billion into
public pensions in the third quarter. That was 3.2 percent less than
the previous quarter, but 14.5 percent higher than the third quarter
of 2013 and the largest amount for the third quarter on record.
Employees put in $8.3 billion, a plunge of 27.5 percent from the
quarter before. Still, it was 3.9 percent higher than the same
period in 2012 and the largest third quarter amount on records going
back to 1974.
Benefit payments, which had steadily risen since the third quarter
of last year, eased during the quarter — to $57.71 billion from
$60.85 billion in the second quarter.
(Reporting by Lisa Lambert; editing by
David Gregorio)
[© 2013 Thomson Reuters. All rights
reserved.] Copyright 2013 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
