Municipal pension risk improvements and outlook for 2024
Our outlook for pension-related municipal credit risk in 2024 in the context of higher interest rates and ongoing market risks.
Rising interest rates and stronger contributions have eased pension-related credit risk for many governments. But concentration in equities and other potentially volatile assets remains, and any significant market downturn would add to already elevated budgetary costs. This discussion will cover our outlook for pension as well as OPEB liabilities and costs in 2024.
- How higher interest rates and contribution discipline have improved many governments' pension risk indicators
- Credit improvement for cities like Chicago and Milwaukee, and states like Kentucky and New Jersey based on commitment to stronger pension contributions
- Ongoing concentration in volatile assets and the potential hit to municipal budgets from a market downturn
- Pockets of credit risk related to retiree healthcare (OPEB) liabilites and costs
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SpeakersTimothy Blake Managing Director, Public Finance Group Moody's Ratings
Thomas Aaron Vice President - Senior Credit Officer Moody's Investors Service
David Levett Vice President - Senior Analyst Moody's Ratings
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Tim Blake is a Managing Director in Moody’s Public Finance Group responsible for US state ratings as well as local government ratings in the Eastern region. He also oversees ratings for US transit systems and a specialist team on government pension analysis. Tim has thirty years of experience in the municipal market.
Prior to joining Moody’s, Tim was a credit risk manager and ratings advisor at Goldman Sachs, and a credit and liquidity facility specialist at NatWest Markets.
He is a graduate of the State University of New York at Albany.
Tom is the dedicated public pension specialist for Moody’s Investors Service US Public Finance Group. He has held this role since 2013, in which he authors pension-related research and facilitates pension risk assessments across the group’s ratings. Tom originally joined Moody’s as a ratings analyst in 2011, where he covered local government credits throughout the Midwest. Prior to joining Moody’s, he served as Deputy Chief of Staff to a member of the San Diego City Council. Tom holds a Master of Science degree in Applied Mathematics (Actuarial Science) from DePaul University in Chicago and a Master of Arts in Economics from San Diego State University.
David is a Vice President on the Midwest Regional Ratings Team. He is the lead analyst for the City of Detroit and the City of Chicago. He was previously the lead analyst for Chicago Public Schools and Cook County, as well as the state lead for Illinois and Michigan local government credits. David has experience working in state government, local government and the non-profit sector. Most recently, he was a Financial Analyst for the City of Rochester Hills in Southeast Michigan. David holds a MPA degree from the University of Delaware and a BA in political science from Western Michigan University.