- Moody’s new credit standards for public pensions would nearly double the unfunded liabilities for state and local pension plans in California to $328.6 billion from $128.3 billion.
- California has the second lowest credit rating at Standard & Poor’s of all 50 states; Illinois now has the worst. Moody's new standards would drop the funded status of these plans to 64%, versus a previous estimate of 82%, the Center said.
- “By standard accounting methods, some state pension funds will run out of assets within as little as five years”
- New rules will lower expected rates of returns on their pension assets, instead of the often overstated returns they now use to paper over holes in their plans blown out by bad investments.
- Meredith Whitney says California is papering over budget holes with gimmicks, like raising taxes retroactively, pushing state expenses onto local towns and cities that can’t afford them, and underfunding their pension funds. "It’s so much worse than the rosy picture that the headlines suggest,” the CEO of Meredith Whitney Advisory group says . . .