...DALLAS (S&P Global Ratings) June 9, 2017--In its latest session, the Texas legislature formally adopted significant pension reforms for the City of Houston (##/Negative), which are a step in the right direction toward improvement in the city's pension plans' funded status and plan sustainability. The city estimates the reforms help reduce an $8.2 billion unfunded liability to $4.3 billion, measured by the city's actuary using the newly adopted 7% interest rate for all plans. The combined funded status of the city's three plans is 62.7% funded as of June 30, 2016 (measured using interest rates ranging from 8% to 8.5% set by each of the funds prior to the reforms taking effect). While the hurdle of plan reform development and adoption has been cleared, S&P Global Ratings' future rating reviews will in part be influenced by the reforms' implementation and impact on the funded status of the plans and Houston's financial performance. Still to be determined, however, is whether voters will approve...
