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Market Volatility Could Shake Up State Pension Funding Stability Feb 08
Standard & Poors, Feb 2008
Abstract
After some tumultuous times in 2001 and 2002, U.S. state pension plans have recovered in recent years with the help of growing investment returns. The funded ratio, or actuarial value of assets divided by the actuarial accrued liabilities (AAL), is one measure of the health of a pension fund. Funding for 2007 will likely improve as complete data becomes available, but Standard & Poor's Ratings Services believes that any improvement could be short-lived if recent market volatility persists and shrinks investment returns. The status of an employer's pension plan is an important factor in our state ratings analysis. States face a variety of ongoing and chronic costs that at any point could weaken their ability to meet their bonds' debt...
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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