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US public pensions' investment gains grow in Q2

U.S. public pensions funds earned $129.4 billion on investments in the second quarter, a nearly 77 percent increase over the prior quarter's modest gains, according to U.S. Census data released on Tuesday.

The returns helped boost cash and security holdings for the 100 largest public employee retirement systems by 4.6 percent compared to the 2014 first quarter and 14.3 percent compared to the same period last year, to nearly $3.37 trillion altogether.

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Of the asset classes surveyed by the Census, federal government securities posted the biggest percentage gain in the quarter, with an increase of 12.4 percent to $307.8 billion.

Signage stands outside the offices of the California Public Employees' Retirement System (Calpers) in Sacramento, California.
Ken James | Bloomberg | Getty Images
Signage stands outside the offices of the California Public Employees' Retirement System (Calpers) in Sacramento, California.

Year over year, those securities increased 16 percent, the data showed, though they make up less than a 10th of major public pensions' holdings.

Corporate stocks and bonds both saw increases compared to the 2014 first quarter, while international securities declined slightly.

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Despite recent gains and the huge returns from 2013's stock market rally, public pensions are still facing massive unfunded liabilities.

The future shortfall has tripled to $2 trillion in less than a decade, Moody's Investors said in a report last week.