Indianapolis is less financially burdened by public pensions than its peer U.S. cities, according to a new Standard & Poors report.
However, the credit ratings agency says, Indianapolis’s burden is lighter in large part because of state involvement in its pension plans.
The S&P report, issued Wednesday, looks at pension pressures facing the nation’s 15 largest cities. In addition to Indianapolis, those cities are Austin, Texas; Chicago; Columbus, Ohio; Dallas; Houston; Jacksonville, Florida; Los Angeles; New York; Philadelphia; Phoenix; San Antonio; San Diego; San Francisco; and San Jose, California.
Based on 2015 contributions, Indianapolis funded its pensions at 98 percent of liabilities, making it the most well-funded city in the report. Among all 15 cities, the median weighted pension funded ratio was 70 percent. Chicago fared the worst, at 23 percent.
The pension burden in Indianapolis was a relatively miniscule $66 per person, by far the lowest in the group. In Chicago, it was $12,400 per person. Most of the surveyed cities were between $1,000 and $4,000.
Compared with the other cities in the report, Indianapolis is “somewhat unique” in its pension situation, said Sussan Corson, S&P’s primary credit analyst on the report.
In 2008, the Indiana state legislature agreed to cover annual benefit payments for the city’s pre-1977 police and fire pension plans.
Also, Corson said, the other public pension plans are state plans in which Indianapolis is a participant. This is a different situation from other cities in the study, which maintain their own plans independent from state involvement.
“There is a little bit of a story behind the data,” Corson said of the Indianapolis numbers.
A key takeaway of the report, S&P said, is that pension costs could pose future budgetary pressures for the nation’s largest cities.
Corson also noted, however, that many of these cities have diverse economies and strong management, which should help them deal with their pension burdens.