The value of the Hawaii Employees' Retirement System's investment portfolio shot up by $945 million during the third quarter, retaking ground it lost as financial markets crumbled during the past year.

Trustees of the pension fund for state and county workers were told the soaring stock market performance helped push the portfolio up. It was worth about $9.8 billion at the end of September. At the end of the previous quarter, the fund stood at about $8.9 billion.

"It's a very nice recovery coming out of the crisis of the later quarter of 2008," said Neil Rue of Pension Consulting Alliance Inc., which prepared the report for the trustees.

The pension fund, with other retirement funds, was hit with big losses in value as investment markets tumbled last year.

The fund was at $11.7 billion two years ago, but as of this March, it had slid to $8.12 billion as a poor economy, credit crisis and financial markets drove investments lower.

But since early March, stock markets have been staging a comeback that has benefited the ERS and other pension funds. During that time, the ERS value has gone up by $1.64 billion.

Rue told the trustees that at the end of the most recent quarter, the ERS portfolio was worth $9.77 billion, or $108 million shy of where it stood a year ago.

The latest quarter's performance was fueled by gains in U.S. and international stock markets as the portfolio gained 11.2 percent in a three-month period.

The pension fund has been shifting more of its investments out of fixed-income instruments such as bonds to stocks, which made up 57 percent of its holdings on Sept. 30.

The remainder of the investments are held in fixed-income (31 percent), real estate (7 percent) and alternate investments (about 5 percent).

Rue said the performance during the most recent quarter exceeded benchmarks set for the portfolio but underperformed the median for such funds.

But he said performance was at or better than the median during the past five years.