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Pension liabilities for 50 largest local governments jump 192% since 2005

Adjusted net pension liabilities for the 50 largest local governments totaled $367 billion in fiscal year 2015, up 192% from 2005, said a report Friday from Moody’s Investors Service.

Of the 50 municipal entities reviewed, 32 had greater adjusted net pension liabilities than net direct debt in 2015, up from 14 in 2005, Moody’s estimated.

The median adjusted net pension liability compared to all governmental revenues across the 50 entities was 147% in 2015, up from 70% 10 years earlier.

Those with the highest adjusted net pension liabilities as a percentage of 2015 operating revenue were Chicago at 719%, followed by Dallas at 549%, Phoenix at 434%, Houston at 414% and Los Angeles at 407%. Local governments reporting the lowest adjusted net pension liabilities as a percentage of operating were Wake County, N.C., at 22%; Mecklenburg County, N.C., 25%; Washington, D.C., 38%; Cypress-Fairbanks Independent School District, Houston, 52%; and North East Independent School District, San Antonio, 56%.

Regarding pension contributions, the 50 local governments contributed a total of $17.6 billion in 2015, up from $7.4 billion in 2005. The median pension contribution was 5.2% of all governmental revenues in 2015, compared to 3.6% in 2005. Only 24 of the 50 entities surveyed contributed enough to stem unfunded pension liability growth.

Moody’s expects adjusted net pension liabilities to increase 6% in fiscal year 2016 and another 31% in fiscal year 2017 due to poor investment performance in 2015 and 2016, and lower discount rates.