Public Pension Systems Lost More Than $726 Billion In 2009

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WASHINGTON, D.C. — Nationwide,  state and local public employee retirement systems had $2.5 trillion in total cash and investment holdings in 2009, a $726.1 billion or 22.7 percent decrease from $3.2 trillion in 2008, according to new statistics from the U.S. Census Bureau. This follows a $176.7 billion loss the previous year.

These statistics come from the 2009 State and Local Public Employee Retirement Systems Survey, which provides an annual look at the financial activity and membership information of the nation’s state and local public employee retirement systems, including revenues, expenditures, investment holdings and number of retirement systems.

Losses on investments totaled $633.4 billion in 2009; nearly $600 billion more than in 2008 when losses totaled $38.9 billion. Retirement systems have substantial investments in financial markets and consequently earnings are dependent on changes in market performance.

Employee contributions increased 7.0 percent in 2009, to $39.5 billion. Government contributions increased 4.5 percent to $86.1 billion with local government contributions increasing 10.0 percent, offsetting a 2.6-percent decline in state government contributions.

Total payments increased 4.0 percent, from $193.7 billion in 2008 to $201.5 billion in 2009, because of an increase in benefit payments, which rose 6.7 percent to $187.0 billion.

In 2009, most investment categories showed decreases. Corporate stocks dropped 29.8 percent from $1.2 trillion in 2008 to $808.9 billion in 2009. Corporate stocks comprised 32.8 percent of total holdings in 2009.

Increases were seen only in cash and short-term investments, real property, and mortgages, which in total comprised 9.1 percent of total cash and investment holdings.

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