The public pension funds were negatively impacted by the weak performance of the equity markets in the third quarter of 2014. According to the latest survey released by the United States Census Bureau, the pension funds experienced the first negative quarterly earnings since the third quarter of 2012.
Pension funds’ assets decline quarter-over-quarter
The Census Bureau reported that the assets (cash and security holdings) of the 100 largest public pension funds in the United States declined 1.8% from an all-time high of $3.365 billion in the second quarter to $3.305 billion during the third quarter.
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The assets of the pension funds dropped because of negative earnings, down from $129.4 billion in the second quarter to $43 billion in the third quarter.
The agency noted that the assets of pension funds were up 8% if compared with the $$3.061 billion total value of cash and security holdings held in the third quarter of 2013.
Corporate stocks and bonds
The Census Bureau found that corporate stocks fell 0.7% from $1.176 billion to $1.168 billion during the third quarter. The agency noted that the value of the equities of corporations declined to its lowest level since the second-quarter of 2012 (quarter-to-quarter basis).
On a year-to-year basis, the value of corporate stocks increased 10.3% from $1.058 billion to its current value at $1.168 billion.
According to the agency, corporate stocks account one-third or 35.3% of the total cash and equity holdings of major public pension funds for the current quarter.
On the other hand, corporate bonds composed one-eight of 11.5% of the total assets of major public pension funds during the period. Corporate bonds recorded a 2.7% quarter-to quarter increase $381.3 billion from $371.5 billion or an 18.4% gain on a year-to-year basis.
During the period, international securities suffered a quarter-to-quarter decline of 4.9% to $624.5 billion from $656.5 billion and a 2.1% drop to $637.7 billion on an annual basis.
International securities represent one-fifth or 18.9% of the total assets of major public pension funds during the quarter.
Federal government securities
The Census Bureau reported that federal government securities rose 0.1% to $308.1 billion from $307.8 billion on a quarterly basis or up by 15.8% on a yearly basis. Federal securities account one-tenth or 9.3% of the total assets of major public pension funds.