Pension burdens increased for 31 of the 50 largest local governments in fiscal year 2013, said a new report from Moody's Investors Service.
The report said the fiscal year 2013 median adjusted net pension liabilities increased to 204% of operating revenue from 175% the prior fiscal year. Still, pension costs and liability burdens vary widely among the 50 largest local governments; for 14, pension and actuarial costs amount to less than 5% of revenue.
As a percentage of operating revenue, Chicago remained at the top with adjusted net pension liabilities at 703%, followed by Dallas at 506%; Houston, 458%; Los Angeles, 410%; and Jacksonville, Fla., 403%. Among those with the lowest percentages are Washington, D.C., with 24%, followed by Cypress-Fairbanks (Texas) Independent School District at 25%, and Mecklenburg County, N.C., 29%.
Adjusted net pension liability changes in 2013 government reporting exhibited mixed results because of differences in plan valuation dates spread across 2012 and 2013 calendar years, since Moody's adjustments tie actuarial valuation dates to market-based discount rates in valuing liabilities.
Pension plans for the largest local governments also benefited from strong investment performance in 2013, following almost flat returns in 2012. Plans with fiscal years ending June 30 achieved solid investment performance in 2014 as well.
Moody's asserts that, beginning in fiscal year 2014, many plan funding disclosures will become timelier as new public pension accounting standards are adopted, since assets and liabilities must be reported at the end of the plan's fiscal year.
Moody's expects some local government adjusted net pension liabilities to moderately decline based on these disclosures.
The 50 largest governments are ranked by outstanding debt in fiscal year 2013.
