America’s 100 biggest public employee pension plans saw a record increase in the value of their assets during the second quarter of this year—but benefits and withdrawals rose, too, according to new figures from the U.S. Census Bureau.
For these plans, cash and security holdings amounted to $2,943.5 billion—the highest level since data gathering began in 1968. Cash and security holdings had a quarter-to-quarter increase of 0.4%, from $2,931.8 billion during the last quarter. These holdings also saw a year-to-year increase of 8.4%, from $2,715.4 billion in the second quarter of 2012.
Earnings on investments totalled $38.3 billion in the second quarter of this year, which is a sharp decline from the previous quarter, when investment earnings stood at $115.49 billion. However, during the same quarter in 2012, pension plans endured investment losses of $16.3 billion.
Benefit payments and withdrawals also hit a record high during that quarter, reaching a total of about $62.2 billion—compared with a total of about $60 billion in the previous quarter and $53.2 billion a year ago.
Additionally, the Census figures reveal that both governments and employees increased their contributions during the second quarter of this year. These contributions, along with strong equity markets, are seen as the driving force behind the increase in asset values.
Government contributions saw a quarter-to-quarter increase of 11.8%, from $20.4 billion to $22.8 billion, and a year-to-year increase of 2.3%, from $22.3 billion in the second quarter of last year.
Contributions from employees saw a quarter-to-quarter rise of 21.2%, from $9.4 billion to $11.4 billion in the second quarter of this year, and a year-to-year rise of 11.2%, from $10.3 billion in the second quarter of last year.
The corporate stock holdings of pension plans increased by 7.4% over the year to $1,0132 billion. There is almost no change compared to the previous quarter. Corporate stocks made up about one-third of the total cash and security holdings of major public pension plans.
U.S. government securities increased over the year by 6.9% to $267.1 billion, almost the same as the previous quarter. Federal securities made up about 1% of pension plan holdings.
International securities rose to $592.6 billion during the second quarter of 2013, an increase of almost 17% from a year ago. During the previous quarter, the figure stood at $596.7 billion. International securities made up about 20% of pension plans’ total cash and security holdings during the second quarter of this year.
During that period, corporate bond holdings fell 9% to $330.8 billion, compared with the previous year. Compared to the previous quarter, the decrease was just 1.5%. Corporate bonds made up about 11% of pension holdings.
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