Impact of unfunded pension obligations on credit quality of state governments

Christine R. Martell, Sharon N. Kioko, Tima Moldogazíev

Research output: Contribution to journalArticle

12 Citations (Scopus)

Abstract

This study reviews the funding status of state-administered pension plans and their impact on state credit quality. As the fund ratio (actuarial assets/actuarial accrued liability) of state-administered pension plans decreases, states are more likely assigned a lower rating. Moreover, rating outlooks are sensitive to the fund ratio, especially for migration between stable and negative outlooks for states with lower fund ratios. These results are a timely pretest to the 2013/2014 implementation of GASB Statements No. 67 and 68, serving as a benchmark to assess whether new reporting requirements will yield information to alter the market's response to unfunded pension liabilities.

Original languageEnglish (US)
Pages (from-to)24-54
Number of pages31
JournalPublic Budgeting and Finance
Volume33
Issue number3
DOIs
StatePublished - Sep 1 2013

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pension
obligation
credit
liability
rating
assets
funding
migration
market
State government
Obligation
Pensions
Credit
Liability
Pension plans
Rating

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics
  • Public Administration

Cite this

Martell, Christine R. ; Kioko, Sharon N. ; Moldogazíev, Tima. / Impact of unfunded pension obligations on credit quality of state governments. In: Public Budgeting and Finance. 2013 ; Vol. 33, No. 3. pp. 24-54.
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Impact of unfunded pension obligations on credit quality of state governments. / Martell, Christine R.; Kioko, Sharon N.; Moldogazíev, Tima.

In: Public Budgeting and Finance, Vol. 33, No. 3, 01.09.2013, p. 24-54.

Research output: Contribution to journalArticle

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