...DALLAS (S&P Global Ratings) Sept. 15, 2016--S&P Global Ratings believes that the pension reform framework described in a statement by mayor of Houston, Texas yesterday is a step in the right direction for the city. The city's efforts to come to an agreement, even if preliminary, that includes improved funding discipline, more conservative assumptions, and benefit reform demonstrates management's efforts at improving the retirement system's sustainability and is no small feat. However, we also recognize that there is a long road ahead before negotiations are finalized and the full impact of the proposal can be fully evaluated. We downgraded the city to ##/Negative in March 2016 based in part on our opinion of its large unfunded pension liability that has been exacerbated by what we consider optimistic rate-of-return assumptions and a history of lower-than-actuarially determined contributions. The framework announced by the mayor, which is still preliminary and subject to additional negotiations,...
