The Challenge of the Pension Crisis on Municipal Credit

长期以来，市政债券市场被认为是一个安全的避风港 - 一个资产类别，提供可靠的余额申报表，但公共资助发行人的违约风险的低产量很低。最近，市政金融的头条新闻一直在主导Detroit’s 2013 bankruptcy那Puerto Rico’s debt crisisand rising budget deficits in Illinois and other states. Chicago, facing a massive budget shortfall, offered yields of more than 5.5 percent on tax-exempt bonds and nearly 8 percent on taxable bonds sold in July.

这是否意味着3.7万亿美元的Muni市场的性质正在发生变化？随着多达80,000名发行人，绝大多数市政债券仍然是管理良好的公共实体的投资级学分。但在过去15年中，养恤金负债的兴起已成为市政金融的关键因素。

Pension liabilities carry risk that can, in worst-case scenarios, threaten debt repayment. Here are five key points:

•养老金，如债务，是从一般收入支付的市政实体的责任。然而，与债务不同，养老金不是一个真正的固定成本。董事会成员往往来自政府赞助商的官员，确定推动养老金责任计算和资助实践的假设。这些假设包括摊销，预期寿命和市场回报，可能对责任和资金计算产生巨大影响，并且可能与实际结果不相配。

•养恤金负债以前所未有的利率增长，目前在十年前报告的责任下报告的责任时期的无资金负债。

•虽然大多数州和地方政府对债务的金额和结构限制，但养老金负债存在非常少量的类似限制。

•养老金负债波动，受股票市场波动。

•尚不清楚，应在压力情况下取得优先位置：债券或养老金。但一般来说，在最近的高调破产中，养老金更有利于。

Many state and local entities are now in the precarious position of funding enlarged liabilities in an era of sluggish economic and revenue growth. Pension contributions, along with wages, programs, other retirement liabilities, infrastructure investment and debt service are all paid from the same source of tax revenues — revenues that have not increased at nearly the rate of pension contribution requirements. As a result, we at Northern Trust Asset Management see pensions cannibalizing some state and local budgets, whereas others continue to underfund the system.

To gain a solid understanding ofhow pensions affect credit profiles那at least four factors should be taken into consideration:

The burden of the unfunded liability.看看政府收入，税收基础和储备基金，整体市政债务和经济实力和人口概况等因素的责任的绝对价值。

资助惯例。Is the pension liability affordable under the current tax and budget structure? Funding below the actuarial required contribution indicates the current burden is unaffordable and will grow at a compounding rate.

Actuarial assumptions related to the amortization schedule of the责任那life expectancy，退休年龄和折扣率。所有人都可能导致负债，资金比率和年度成本巨大的波动。在某些情况下，这些假设可以减低责任，从而延迟必要的资金或改革。

Ability to reform.实体有福莱希吗bility to adjust the liability and avoid competition with core municipal services? States with constitutional limitations on benefit adjustments include Alaska, Arizona, Hawaii, Illinois, Louisiana, Michigan and New York.

Beginning with 2015 audits, new government accounting standards will require increased transparency of plan liabilities and funding practices. This intensified scrutiny might bring to light more burdens on pensions than previously presented. We view this as a positive change for municipal bond investors.

养老金改革有可能提高预算灵活性和稳定负债。自2008年以来，所有50个州都制定了一定程度的养老金改革，包括增加员工捐款，减少或消除了退休人员生活费用或退休年龄的延期。虽然改革在某些地方有效，但措施仍然受到政治挑战或宪法的挑战或禁止。

在没有系统性改革的情况下，养老金计划破产将成为未来十年的某些信贷的非常令人担忧。我们不会预计将在可预见的未来处于市政破产的数量增加。在极端的例子中，养老金义务变得压迫性，但进一步的改革是不可行的，因此可以认为重组可以被视为最后一个选择。在这些情况下，债券与养老金的治疗仍不清楚。保守的方法应包括假设无抵押债券将在更大程度上损害而不是养老金。

We expect it will remain politically unpalatable to impose cuts on employee and retiree benefits without including cuts for unsecured bondholders. The interpretation of recovery between bonds and pensions as a conflict playing out between Wall Street and Main Street will inevitably affect the restructuring process. In such a political environment, a market-imposed haircut on municipal bond investors may be preferable to an angry workforce.

市政债券市场从未如此困倦或危险，因为似乎在外面的观察员中。它是一个效率低效的市场，奖励有能力分析和评估股权负债的积极投资者。无资金的养老金负债代表市债券市场的风险不断增长，尽管具有日益的意识，我们可以分析和适当地管理风险。

亚当谢是固定收入研究总监;和斯蒂芬妮WOEPPEL是团队领导，市政研究;at at北方信托资产管理在芝加哥。

看北方信托资产管理的免责声明。

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