How Have Municipal Bond Markets Reacted to Pension Reform?


This issue brief examines whether state and local borrowing costs have become more sensitive to pensions since the financial crisis.

Jean-Pierre Aubry, Caroline V. Crawford, Alicia H. Munnell
Publication date:
October 2017
Filed under:
Research Studies
Key findings:
The brief's key findings include:
  • Rating agencies have begun to explicitly account for pensions in their methodologies;
  • Several governments have experienced downgrades attributable, in part, to their pension challenges;
  • Pension funded status can have a meaningful impact on the borrowing costs for a municipality; and
  • Adequate funding, monitoring, and management of public pensions should be an important component of state and local governments' fiscal management.
Download publication:
How Have Municipal Bond Markets Reacted to Pension Reform - October 2017