Moody's rating agency upgraded
In particular, Moody's applauded "positive governance changes" like a proposed constitutional amendment to create a rainy day fund to cope with volatility by tapping capital gains and general fund revenues each year. The state aims to have
The rating change affects
Just so-so for the rest of the country
Meanwhile, most of the country is having pretty slow growth this year. In
In general, economists are already chalking up 2014 as a "transitional year." That is one of growth -- but slow growth. The financial services company Keefe, Bruyette and Woods predicted that real GDP growth this year will hit 2.1 percent while growth in 2015 will be 3.1 percent (a rate most economists peg as steady or healthy growth).
But chin up -- pensions aren't completely horrible anymore!
Standard and Poor's rating agency released a report this week with some mixed news: U.S. state pension funding levels continued to decline. Not good news. But here's the silver lining -- they "have likely bottomed out" as the country is now far enough removed from the effects of the 2008 and 2009 stock market crash so that those figures are no longer bringing down pension valuations. Most pension funds "smooth" their valuations, meaning actuaries average the investment performance over the past five or so years and apply that average to the valuation of their funds. Because the rolling average included the market downturn of 2008, it's hurt the valuation of funds. But now, thanks to new accounting rules and it's been more than five years since the recession began, those negative numbers will stop playing a role in today's valuations.
Still, the report, which is available to subscribers, noted that there remain longer-term challenges like growing costs for retirees.
"Although this is likely the low point, which is good news, we believe pension funded level recovery could be slow and uneven and sizable funding gaps will remain for most states," S&P credit analyst
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