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100 largest public pension plans see first asset declines in 5 quarters: Census Bureau

Posted On: Dec. 29, 2011 12:00 AM CST

Total assets of the 100 largest public defined benefit retirement systems declined 8.5% in the third quarter, their first overall quarterly loss in more than a year, according to the Census Bureau.

The top 100 plans had total assets of $2.5 trillion as of Sept. 30, a 1.1% increase over the same quarter in 2010, but investment returns were negative for the first time since the second quarter 2010, with $198.6 billion in losses recorded in the third quarter.

The 100 largest public plans surveyed by the Census Bureau represent 90% of total public plan assets. This year, the summary included 81 state plans and 19 local plans, Erika Becker-Medina, chief of the Census Bureau's employment and benefits statistics branch, said in a telephone interview.

The overall decrease in assets over the previous quarter was largely because of investment losses, with a 14.9% drop in corporate stocks and a 14.2% drop in international securities. Corporate bonds decreased 8.6% and federal government securities decreased 2.4% in the same period.

According to census data, the 100 largest plans have 30.4% of their holdings in corporate stocks, followed by 17.7% in international securities, 15.7% in corporate bonds, 7% in federal securities, 4.1% in cash and short-term investments, 0.4% in mortgages, and 0.1% in local government securities, with the remainder in other securities and alternative investments, including private equity and mutual funds.

“While this is just a snapshot in time, volatility like this is something that pension funds have to worry about,” Kil Huh, research director for Pew Center on the States, said in a telephone interview.

Hazel Bradford is a reporter for Pensions & Investments, a sister publication of Business Insurance.