Pension obligation bond

Howard Jarvis Taxpayer Association has until the end of January to file briefs in its case challenging San Jose's pension obligation bond validation.

Litigants in a case challenging San Jose's validation of proposed pension bonds will have to wait another month to hear if the high court will review an appeals court ruling.

The one notch upgrade affects $256 million in outstanding bonds and resulted from Fitch's recent criteria change.

Ten other pension obligation bonds are under review by Fitch Ratings as a result of the agency's new local government criteria.

A city council committee received staff recommendations to fully fund the Police and Fire Pension System within 30 years.

Recommendations from an actuary on the city's police and fire pensions come amid a rising unfunded liability and uncertainty over the use of pension bonds.

The city, which issued POBs in 2005, is awaiting recommendations from an actuary on how to deal with a $3 billion unfunded liability in its public safety fund.

"We believe pensions have an elevated probability of stressing the state and local governments' budgets even as Illinois has made supplemental contributions above the statutorily required amounts," S&P Global Ratings analyst Joseph Vodziak said.

The rating agency said it could upgrade the state's ratings over a two-year period if recent healthy fund balances are maintained.

A substantial drop in new money volume sets California and the Far West apart from the the country.