42.5 F
Fort Worth
Friday, December 4, 2020
How Recent Political Changes Will Impact Your Bottom Line
Government Pension Problems: Detroit is not alone

Pension Problems: Detroit is not alone

Other News

Tarrant County DA’s office changing how it handles misdemeanor marijuna cases

The Tarrant County Criminal District Attorney’s Office is changing how it handles misdemeanor marijuana cases. The Tarrant County  Criminal District Attorney’s Office on Monday, Nov....

Arlington selects new police chief from Baltimore department

Col. Al Jones, a 25-year veteran of the Baltimore County Police Department, has been appointed the new police chief of the the City of...

Family of Black woman shot through window sues Texas officer

FORT WORTH, Texas (AP) — Family members of a Black woman who was killed when a white police officer fired through a window of...

Law firm offers free estate plans for health care workers during pandemic

Fort Worth attorney Erik Martin says he felt compelled to find a way for his law firm to join the effort to support frontline...
Robert Francis
Robert is a Fort Worth native and longtime editor of the Fort Worth Business Press. He is a former president of the local Society of Professional Journalists and was a freelancer for a variety of newspapers, weeklies and magazines, including American Way, BrandWeek and InformatonWeek. A graduate of TCU, Robert has held a variety of writing and editing positions at publications such as the Grand Prairie Daily News and InfoWorld. He is also a musician and playwright.

 

Chris Isidore

NEW YORK (CNNMoney) — The problems with Detroit’s pension funds, which helped to drive the city into the nation’s largest municipal bankruptcy, are widespread across other major cities and local governments.

A report by credit rating agency Moody’s finds that there are 30 major localities where the pension burdens are greater the government’s total operating revenue.

The report’s authors stress that it wasn’t just the pension problems in Detroit that caused the bankruptcy filing this past July — they cite the loss of businesses and residents cutting into the city’s tax base among the factors. But they say the problems in the pension funds, a big part of the city’s $18 billion of liability, are a cause for concern elsewhere.

“What Detroit faced, we would not view them as an outlier,” said Tim Blake, a managing director of public finance for Moody’s. “They had a heavy pension burden, but there are other cities that are heavier.”

Chicago is the city highlighted in the report as having the most severe problems, due not only to issues with the pension funds, but also the funds of overlapping units of government, such as Cook County, the Chicago schools and the metropolitan water district. All have had their debt ratings downgraded by Moody’s in the past six months and the condition of the pension funds has been a factor in those downgrades.

But other governments dealing with a pension funding gap that is more than double their annual revenue are Jacksonville, Fla., Los Angeles, Dallas, Houston and Phoenix, as well as school districts in Denver and Las Vegas.

Two of the problems that occurred in Detroit that are disturbingly common elsewhere are local governments not making sufficient payments to cover the promised benefits under the pension plans, and the pension funds making unrealistic assumptions about the future earnings of their investments. Moody’s says that it believes most of the pensions it examines have a larger funding gap than being estimated by the government officials.

“The accounting standards in the public sector allow quite a bit of leeway for the public sector to make their own assumption,” said Blake. “That’s contributed to the underfunding.”


close






Oh hi there 👋 It’s nice to meet you.

Sign up to receive awesome content in your inbox.

We don’t spam! Read our privacy policy for more info.


close






Oh hi there 👋
It’s nice to meet you.

Sign up to receive awesome content in your inbox.

We don’t spam! Read our privacy policy for more info.

Latest News

Granger reelected as lead Republican on the House Appropriations Committee

U.S. Rep. Kay Granger, R-Fort Worth, has been reelected by members of the House Republican Steering Committee to serve as Lead Republican of the...

Optimism growing for COVID relief bill as pressure builds

By ANDREW TAYLOR Associated Press WASHINGTON (AP) — Optimism about delivering long-sought COVID-19 relief is building on Capitol Hill after additional rank-and-file lawmakers voiced support...

US adds Chinese chipmaker, oil giant to security blacklist

BEIJING (AP) — The U.S. government has stepped up a feud with Beijing over security by adding China’s biggest processor chip maker and a...

House votes to decriminalize marijuana at federal level

WASHINGTON (AP) — The Democratic-controlled House on Friday approved a bill to decriminalize and tax marijuana at the federal level, reversing what supporters called...

US imposes visas restrictions on more Chinese citizens

WASHINGTON (AP) — The State Department said Friday that the U.S. will impose visa restrictions on Chinese citizens engaged in overseas influence operations. Secretary of...