Pension Liabilities Of Universities Projected To Exceed Capital Debt

Like many large local governments, public universities are being weighed down by unfunded pension liabilities. At an estimated $183 billion next year, they will exceed the institutions’ total capital debt.

Moody’s reckons that aggregate adjusted net pension liabilities will increase about 40% – the same rate at which the liabilities of 50 largest local governments is growing – between fiscal year-end 2015 and fiscal year-end 2017.

Assuming bonded debt maintains its recent 8% growth, pension-related liabilities will represent 62% of total debt by the end of 2017, the ratings agency said Nov. 18. Moody’s estimates are based on investment results...