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State-run public pensions saw increase in assets, deficit in 2011 | BenefitsPro

State-run public pensions saw increase in assets, deficit in 2011

State-administered defined benefit retirement systems saw a 14.6 percent increase in cash and investment holdings from 2010 to 2011. The nation’s 222 state public employee retirement systems had $2.5 trillion in assets in 2011, compared to $2.2 trillion in 2010, according to the U.S. Census Bureau’s “2011 Annual Survey of Public Pensions: State-Administered Defined Benefit Data.”

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

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

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

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

Total revenue for state-run pension plans increased 32.8 percent, 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 percent of total revenue, government contributions comprised 13.9 percent, and employee contributions accounted for the remaining 6.6 percent of total revenue in 2011.

Government contributions increased 10.7 percent, from $64.8 billion in 2010 to $71.7 billion in 2011. Employee contributions increased 3 percent, from $33.2 billion in 2010 to $34.2 billion in 2011.

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

Total payments increased 8.5 percent, 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 percent of total payments in 2011. Benefit payments increased 8.2 percent, from $163.4 billion in 2010 to $176.8 billion in 2011.

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