CalPERS' and CalSTRS' municipal credit enhancement programs will be reviewed by Moody's Investors Service for a possible downgrade from their Aaa long-term ratings.
The review is the result of the Sacramento, Calif.-based systems' declining funded status and the overall failing credit quality of California state government, Moody's said in a news release.
While Moody's does not reveal when or if a downgrade will occur, a ratings review generally takes between 60 and 90 days, said John Cline, a Moody's vice president.
The last rating action on CalPERS' credit enhancement program was Jan. 12 when the program was assigned Aaa/Prime-1 long-term and short-term issuer ratings. The last rating action for CalSTRS was Oct. 15, when Moody's upgraded its long-term rating for its credit enhancement program to Aaa from Aa2.
Officials at CalPERS and CalSTRS were under mandatory furlough and could not be reached for comment.