The Information Content of Unfunded Pension Obligations for Municipal Bond Ratings

Advances in Accounting, 1987, 4: 33-42

Posted: 23 Aug 2014

See all articles by Barry R. Marks

Barry R. Marks

University of Houston, Clear Lake - School of Business and Public Administration

K. K. Raman

The University of Texas at San Antonio

Date Written: 1987

Abstract

Pension data for local governments are generally unavailable. Hence, prior reĀ­search has relied on pension ratios as proxies for underfunding. In this paper, we utilize data from Pennsylvania where local governments are required to report unfunded obligations on an actuarial basis to a state agency. The advantage of a within-state sample is that it avoids confounding state-to-state differences relating to the potential for diminution or a state bail-out of pension obligations. In contrast to prior research, we report that unfunded pension obligations do have information content for municipal rating decisions.

Keywords: Unfunded pension obligations, Municipal bond ratings

JEL Classification: G18, L51, M41, M42, M48

Suggested Citation

Marks, Barry R. and Raman, K. K., The Information Content of Unfunded Pension Obligations for Municipal Bond Ratings (1987). Advances in Accounting, 1987, 4: 33-42. Available at SSRN: https://ssrn.com/abstract=2484628

Barry R. Marks

University of Houston, Clear Lake - School of Business and Public Administration ( email )

Houston, TX 77058
United States

K. K. Raman (Contact Author)

The University of Texas at San Antonio ( email )

One UTSA Circle
San Antonio, TX 78249
United States
210-458-8749 (Phone)

Register to save articles to
your library

Register

Paper statistics

Abstract Views
120
PlumX Metrics