Public Pension Assets Grew in 2014, Census Bureau Says
There has been no shortage of bad news for public pension systems from coast to coast. But the U.S. Census Bureau has just released some good news — the assets of state and local public pension systems grew in 2014.
The report, “2014 Annual Survey of Public Pensions: State and Locally Administered Defined Benefit Data
,” provides state and national summary data on the membership, revenues, expenditures and composition of assets of public employee pension systems for state and local governments.
Highlights of the growth in assets include the following:
- Total assets of state and local pension plans nationwide increased 12.8%, from $3.3 trillion in 2013 to $3.7 trillion in 2014.
- Earnings on investments grew 40.6%, from $382.2 billion in 2013 to $537.5 billion in 2014.
- Contributions grew 8.4%, from $153.7 billion in 2013 to $166.6 billion in 2014.
The Census Bureau attributes the overall growth in contributions to increases in government contributions. Employee contributions increased 1.7%, from $44.7 billion in 2013 to $45.5 billion, but they were outstripped by the effect of government contributions, which increased 11.1%, from $108.9 billion in 2013 to $121.1 billion in 2014.But Hold On
The report contains good news, but there are some caveats. While the plans’ assets grew collectively, the state of individual plans’ balances varied; in addition, the report did not make any mention of the effect of that growth on the widespread unfunded liabilities across the country.
In addition, while assets grew, so did the payments those plans made to beneficiaries. The report says that collectively, payments by state and local plans grew 5.6%, from $258.3 billion in 2013 to $272.9 billion in 2014.
And the Census Bureau statistics also portend continued growth in payments, since they show that the total number of beneficiaries increased 3.2%, from 9,263,846 people in 2013 to 9,561,562 in 2014.Stability So Far
The bureau recently reported
that public pension plans’ earnings in the first quarter of 2015 have held steady since the last quarter of 2014. And government contributions remained very important in the first quarter, adding an amount to those plans’ earnings equivalent to 50% of their growth.