Updated on May 14
On Tuesday, Moody's Investors Service downgraded the city of Chicago's credit rating to junk. In light of the Illinois Supreme Court's May 8 ruling that deemed the state's 2013 pension reform law unconstitutional, the ratings agency said it believes “the city's options for curbing growth in its own unfunded pension liabilities have narrowed considerably.”
The latest data available (through 2013) show accrued unfunded liabilities for the city's four pension systems have eclipsed $20.1 billion.
On Wednesday, Moody's downgraded the bond ratings of Chicago Public Schools and the Chicago Park District, citing “steadily escalating pension contributions and use of reserves to fund those contributions.”
The Chicago Public School Teachers' Pensions & Retirement Fund and Park Employees' Annuity and Benefit Fund are not tied to the city's operating funds as both entities are separate issuers.