State retirement systems increased holdings in 2010

State retirement systems increased their holdings by 10.7 percent in 2010, according to the U.S. Census Bureau. They had $2.2 trillion in cash and investment holdings, an increase of $213.9 billion from 2009. This followed a $610.8 billion loss the previous year.

In 2010, investment earnings were $289.6 billion, up from a loss of $511.5 billion in 2009. This is the first year of investment gains since 2007, when earnings totaled $402.3 billion. Investment earnings for 2010 were $112.7 billion below the 2007 level.

These statistics come from the 2010 Annual Survey of Public-Employee Retirement Systems: State-Administered Pensions, which reports the annual membership information and financial activity for the nation’s 222 state-administered public-employee retirement systems, including cash and security investments holdings, receipts, and payments.

Investments that had the largest increases include corporate stocks, which increased 14 percent, from $673.5 billion in 2009 to $767.7 billion in 2010 (and comprised 34.6 percent of total holdings in 2010). Corporate bonds increased 3.3 percent, from $339.4 billion in 2009 to $350.6 billion in 2010 (and comprised 15.8 percent of total holdings in 2010).

Among the cash and security holdings for public pensions, foreign and international securities increased 14.1 percent, from $317.3 billion in 2009 to $362.0 billion in 2010 (and comprised 16.3 percent of total holdings in 2010). Federal government securities increased by 4.7 percent, from $181.5 billion in 2009 to $189.9 billion in 2010 (and comprised 8.6 percent of total holdings in 2010).

There were decreases in cash and short-term investments, mortgages and real property. These investments comprised 8 percent of total holdings in 2010. The most notable of these decreases was mortgages, which declined 14.5 percent from $11.1 billion in 2009 to $9.5 billion in 2010 (and comprised 0.4 percent of total holdings in 2010).

Nongovernmental securities (corporate stocks and bonds, foreign and international securities, funds held in trust and mortgages) were $1.6 trillion in 2010, an 11.5 percent increase from 2009. Nongovernmental securities comprised 73.4 percent of total cash and security holdings.

Total contributions increased 0.8 percent, from $96.9 billion in 2009 to $97.7 billion in 2010.  Government contributions increased 1.8 percent, from $63.5 billion in 2009 to $64.7 billion in 2010. Employee contributions decreased 1 percent, from $33.4 billion in 2009 to $33 billion in 2010. Government contributions comprised 66.2 percent and employee contributions comprised 33.8 percent of total contributions in 2010.

Covered payroll — payments made to active employees on which contributions to a pension plan are based — increased by 2.2 percent from $579.5 billion in 2009 to $592.3 billion in 2010. Pension obligations saw an increase of 5.4 percent from $3.1 trillion in 2009 to $3.2 trillion in 2010.

Total payments in 2010 were $173.5 billion, a 5.6 percent increase from 2009. The increase in total payments was driven by an increase in benefit payments, which comprised 94.3 percent of total payments in 2010. Benefit payments increased by 6.2 percent, from $154.0 billion in 2009 to $163.5 billion in 2010.

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