U.S. Government Pensions Gain 5.5% as Stock Market Rises (updated)

[ProSense]

U.S. Government Pensions Gain 5.5% as Stock Market Rises

By William Selway

Business ExchangeBuzz up!DiggPrint Email .U.S. state and local government pension-fund assets rose in value by 5.5 percent in the last three months of 2010 as stock market gains helped recoup losses incurred since the financial crisis.

The assets of the hundred largest government employee retirement systems grew by $138 billion to $2.64 trillion by the end of 2010 from three months earlier, the U.S. Census Bureau reported today. The rate marks a slowdown from the previous quarter’s growth of 5.9 percent.

The gains ease pressure on pensions that were stung by losses during the financial crisis of 2008. The rout left funds across the U.S. with less than they will need to cover all the benefits they have promised, with the shortfalls estimated at anywhere from $700 billion to more than $3 trillion, depending on the assumptions one uses to calculate future liabilities.

Last quarter’s returns were driven by gains in stocks, corporate bonds and foreign assets, Census figures show. Stocks made up 32 percent of holdings, the biggest chunk. The Standard & Poor’s 500 index advanced 10.2 percent last quarter. The funds posted declines in the value of Treasuries and municipal debt.

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Just the facts, please: Stock performance under Clinton, Bush, and Obama



Updated to add this from Dean Baker: The Origins and Severity of the Public Pension Crisis (February 2011)

[MannyGoldstein]

1. Stocks rise because corporate profits rise

Corporate profits are rising because corporations can now, with absolute impunity, take all of worker productivity gains - workers get nothing more for their contributions. And corporations can offshore production, killing American jobs but cutting production costs.

[MNBrewer]

2. DJIA is basically irrelevant

[ProSense]

3. Sure it is. n/t

[MNBrewer]

5. If you're correct, then maybe unemployment really ISN'T

worse than it was during the Clinton Administration, because, golly.... the DJIA is higher! Happy Days are here again!

When corporations do well, that has nothing to do with whether actual people are doing well, or hurting.

[BklnDem75]

6. Unless it sinks. THEN it's a disaster

:eyes:

[pot]

4. The above poster is right....

The above poster is right, it IS irrelevant. Showing that stocks climbed is a poor indicator of household wealth and income, especially for the middle class and the poor who don't own stocks. Not to mention the chart is highly misleading and is missing some data points. Where is the 14,000 boom in October 2007 for example, it isn't even on the chart! It is like it never even happened.

The 401k is good news if you own a 401k, most don't and only have Social Security to rely on. And god forbid we have another crash in 2 years because the financial regulations had no teeth and were watered down by the banksters and their lobbyists and the 401ks disappear forever. I know I sound negative but I'm struggling to figure out how does this help people who have been unemployed forever and have lost their houses? Are we embracing trickle down economics now? Because it is the rich who own the majority of the stock market.

The Democrats: Better for Wall Street?

[JoePhilly]

8. The jump to 14k lasted about 8 minutes.

[BeyondGeography]

7. Stocks have gone up mainly because the Fed has forced people to put their money in them

Nothing for the Prez to brag about here.

[4lbs]

9. My father, who has a federal pension certainly noticed it.

He told me his federal retirement rose about 10 percent in the last couple of months.

[MNBrewer]

10. Great for him.

I imagine my dad is in the same boat.

I, on the other hand, am still unemployed. Maybe I should use my tiny unemployment checks to buy stocks!