Industry News

On July 1, 2025, Moody’s Ratings reported that state and local governments’ Adjusted Net Pension Liabilities (ANPLs) decreased for the fifth consecutive fiscal year. As of June 30, 2025, their ANPLs were about $2.1 trillion, down by a cumulative $4 trillion since fiscal year 2020. This decline was mainly due to higher market interest rates.

In addition, Moody’s estimated that U.S. public pension systems have earned about 10% to 11% for fiscal year ending June 30, 2025. Generally, those systems have posted returns near or above their annual targets that ranged from 6.75% to 7.25% for three consecutive fiscal years.

Moody’s indicated that another year of decline in ANPLs would continue to lower state and local governments’ balance sheet leverage, which would positively affect their credit quality. However, it also cautions that this trend could be reversed by investment losses or interest rate reductions.

​The report is available here.