State Pension Funding Levels Recovering

June 22, 2012 ( - U.S. states' pension funded levels are gradually recovering from their fall in 2010, according to Standard & Poor's Ratings Services' annual survey.

The survey report, “The Decline in U.S. States’ Pension Funding Decelerates, But Reform And Reporting Issues Loom Large,” says the rate of decline has decelerated, and in some cases, pension funded levels are gradually improving. Still, municipal market participants are looking to improve pension plan reporting and disclosure.

The report found that stakeholders are increasingly interested in pension plan overhaul, spotlighting government pension liabilities. According to John Sugden, a credit analyst at Standard & Poor’s, the “active debate over reform and reporting [has led to] a more significant focus on pension reform, with an emphasis on sustainability, than we have observed in more than 20 years.”

The plans included in the survey receive at least some of their funding from the states, and generally are reported within the states’ financial disclosure. Portions of the pension liabilities are funded by local governments and other governmental entities and are not direct obligations of the states.

The report is available to subscribers of RatingsDirect on the Global Credit Portal, or may be purchased by calling (212) 438-7280 or sending an e-mail to


Sara Kelly