Unfunded pensions for government employees are a growing burden for municipalities across the nation, Moody’s Investors Service said in a report Thursday.

Chicago and surrounding Cook County, Illinois, lead the pack with the largest ratios of adjusted net pension liabilities to revenue.

The ratio for Chicago is 678%, according to the report. While that figure is far ahead the second-most encumbered region, Cook County, Illinois, which has a ratio of 382%, 30 of the top 50 local governments with the largest amount of debt outstanding have an ANPL to revenue ratio greater than 100%.

“The pension burden of current and future employees is significant and growing for many local governments across the US,” Thomas Aaron, an analyst at Moody’s, said in the report. “There are several large local governments with outsized pension burdens large enough to cause material financial strain.”

Chicago’s 2011 net pension obligation was $5.39 billion in 2011, according to Moody’s pension database. Cook County’s obligation totaled $1.83 billion the same year.

“While pension costs vary, actuarial costs and actual contributions represent considerable shares of local government operations in some cases, as actuarial contribution requirements for 17 of the Top 50 exceeded 10% of operating revenues in fiscal 2011,” Aaron said in an emailed statement.

Four of the top 50 local governments listed in the report have actuarial contribution requirements in excess of 15% of operating revenues, including the city of Philadelphia, while 17 of those 50 governments have actuarial costs that exceed 10% of operating revenues when cost-sharing allocations are considered, Moody’s said in the report.

“Contribution shortfalls relative to actuarial standards indicate structurally imbalanced operations, which range from minimal to severe,” says Moody’s Aaron.

Of the 50 entities analyzed, 15 contributed less than their own single employer and agent plan annual required contributions fiscal 2011, Moody’s said. Including cost-sharing plans for which the aggregate of employer contributions are less than actuarial requirements, that number increases to 33 of 50, Moody’s said.

In areas like Chicago, located in Cook County, where pension burdens of neighboring areas intersect, local governments are particularly strained.

“The city of Detroit’s tax base is burdened not only by high pension and debt liabilities of the city, but also from overlapping entities,” the report said. “Similarly, Chicago’s tax base is pressured by the unfunded pension liabilities of the city and overlapping local governments.”

Denver County, CO, Jacksonville,  Los Angeles, Houston, Dallas and Phoenix comprised the top 10 most burdened governments by ANPL to revenue ratios. Clark County School district in Nevada was also in the top 10, along with Chicago’s metropolitan water reclamation district.

Pension burdens have been worsened by perennial underfunding of actuarial contribution requirements, according to the report.

“Underfunding pensions can be a deliberate strategy for local governments to temporarily manage budget strains,” the report said.

When calculating ANPL for local governments, Moody’s calculates the difference between the actuarial value of a pension plan’s assets and its adjusted liabilities.

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