Public Pensions Continue Slow, Precarious Climb out of Financial Hole

According to the U.S. Census Bureau, total holdings and investments for the 100 largest public-employee retirement systems[1] in the country totaled $2.7 trillion in the second quarter of 2012. That’s a decrease of 1.7 percent over the previous quarter and a year-to-year decrease of 2.1 percent (from $2.8 trillion in the second quarter of 2011). However, total holdings and investments are up nearly 30 percent – or $624 billion – over the first quarter of 2009, when pensions hit their lowest value during the recession.

Public pension holdings and investments include six major categories:

  • Corporate stocks (34.8% of total value)
  • Other securities (20.4% of total value)
  • International securities (18.7% of total value)
  • Corporate bonds (13.5% of total value)
  • Federal government securities (9.0% of total value)
  • Cash and short-term investments (3.1% of total value)


From the first quarter of 2011 to the first quarter of 2012, total holdings and investments dropped in value by about $57.6 billion or by 2.1 percent.  The drop came primarily from losses in corporate bonds (which fell $67.7 billion in value), cash and short term investments (-$31.5 billion), international securities (-$16.1 billion) and other securities (- $43.1 billion). Those losses were offset by gains in corporate stocks, which grew $35.2 billion in value and federal government securities which reached their highest level in over ten years at $244.2 billion, a year-over-year increase of $62.3 billion. State and local government securities also increased in value by $2.8 billion.

Contributions to Change in Value of Public Pension Holdings and Investments, 2Q2011 – 2Q2012

Source: Author’s Calculation of data from U.S. Census Bureau

[1] This analysis comes from the Quarterly Survey of Public Pensions by the U.S. Census Bureau, which is a quarterly survey that provides national summary data on the revenues, expenditures, and composition of assets of the largest defined benefit public employee retirement systems for state and local governments. This survey currently consists of a panel of 100 retirement systems, which comprise 89.4 percent of financial activity among such entities, based on the 2007 Census of Governments.