The Government Superannuation Fund, which provides pensions for State sector employees, climbed back into the black this year, led by the turnaround in global stock markets.

The fund made an after-tax surplus of $284.6 million in the 12 months ended June 30, according to its annual report, compared to a deficit of $583.3 million a year earlier.

Its investment revenue of $383.3 million came from an $86.5 million gain in interest and dividend payments and a $296.9 million increase in the fair value of its assets, turning around the $672.7 million loss if booked last year.

International equities led the charge as they paid $22 million in dividends and achieved a capital gain of $184.9 million.

"The overall result for the past year is a welcome recovery, following two years of negative returns during the global financial crisis," said chairman Tim McGuinness in a statement.

"As well as the market rally experienced during most of the year, active management across most asset classes positively contributed to the fund's surplus."

The global financial crisis in 2008 wiped the value of most superannuation funds around the world as plummeting share prices eroded the value of their assets, and saw many investors jump into the relative safety of fixed interest assets.

Since then, stocks bounced back as extraordinary stimulus from governments and central banks helped ease concerns, though concerns have flared up in recent months as the global recovery showed signs of faltering.

The fund's capital gain lifted the value of its assets to $3.03 billion from $2.45 billion a year ago, and beat the forecast
$2.56 billion.

As at June 30, the number of annuitants had fallen 0.2 per cent to 46,855, while contributors dropped 7 per cent to 14,587.

Total benefits paid in the year fell to $826.1 million from $881.7 million a year earlier.

The shortfall between contributions and payments rose to $9.5 million from $8.6 million, and the Government Actuary recommended the government lift its proportion of contribution to 79 per cent from 75 per cent.