GFOA Responds to Moody’s Proposed Changes to Pension Data Reporting; GFOA Members Also Encouraged to RespondThe GFOA submitted comments to Moody’s Investor Service in response to Moody’s proposal to implement several changes to the pension liability and cost information reported by state and local governments and their pension plans. The GFOA opposed Moody’s proposed recalculation of pension liabilities for state and local governments, noting, among other issues, that the proposed adjustments could be arbitrary, create volatility, and fail to recognize differences in actuarial assumptions concerning the accrual of the liability. The GFOA also urged Moody’s against treating pension liabilities like debt as a way to improve the analysis of the public-sector’s long-term liabilities. Specifically, the GFOA cited that governmental agencies have the flexibility to redesign benefit packages to reduce employer pension liabilities, as compared with bonded debt, which can only be changed in the rare case of municipal bankruptcy.
GFOA members are encouraged to closely review Moody’s proposal and consider providing comments by the September 30, 2012, deadline.
Click here to review a copy of the GFOA comments.
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