In 2009, state and local pension plans performed better than their private sector plans, according a study of data from the Federal Reserve.

The National Institute on Retirement Security, Washington, D.C., is making that point in an analysis of trends revealed in the Fed’s Flow of Funds data.

For the year, public pension plans posted gains of 16%, as compared with 13% gains for defined benefit plans in the private sector, according to the NIRS analysts.

Such a large performance gap between public and private DB plans is new, they say.

They attribute the shift to fairly dramatic changes that corporate plans have made to their portfolios in recent years.

In much of the earlier part of the decade, the analysts point out, plans in both sectors each held about 60% of their assets in stocks. But by year-end 2009, corporate pension plans, as a group, had cut back investing in stocks to just 38% of their portfolio, while public plans trimmed only slightly, to about 57% equity exposure, they say.

The NIRS analysts term that change “striking.”

Their explanation is that public plans “took a long-term, balanced approach to investing even in the face of drastic changes in the market” but that private plan sponsors were facing significant pressure that led to the equities pullback.

This pressure stemmed from changes in federal pension law and threatened changes to private sector accounting standards, the analysts say. Another factor: accounting regulations that would require valuation of pension assets and liabilities as though the plan were terminating immediately.

Both factors made sponsoring a pension a far less attractive proposition for employers. and so the private plans tried to limit the damage in ways that resulted in a “policy shift away from equities,” the analysts conclude.