BRADENTON, Fla. - Florida's government-run pension systems generally do not drive negative credit pressure, partly because of the flexibility to change benefits prospectively, according to Moody's Investors Service.

The flexibility to make benefit adjustments applies to the large state-run Florida Retirement System and hundreds of single-employer plans that are mostly run by municipalities, the rater said in a special report Wednesday.

Pension "costs are rising but in general remain moderate," said analysts.

The question of whether benefits can be changed was answered in 2013 by the Florida Supreme Court.

The court ruled that state and local governments could adjust future benefits for current and future employees, though benefits employees had already earned could not be changed.

The state, which operates the Florida Retirement System, has increased employee contributions and lowered benefits for future years of work. The FRS covers state employees, school districts, counties, some special districts, public universities, and some municipalities.

For municipalities that operate their own pension plans, the state has oversight, including actuarial contribution adequacy and also mandates minimum benefit levels to qualify for state revenue sharing.

State influence over the local level somewhat complicates the flexibility to enact benefit reforms, Moody's said.

The state imposes certain requirements on municipalities about how they can use insurance premium tax revenues to fund benefits for police and firefighters. Those requirements have boosted benefits and increased liabilities for some cities. A bill addressing the issue died in the Legislature earlier this year.

Last week, a newly formed coalition called Taxpayers for Sustainable Pensions said that legislatively imposed mandates have cost municipalities more than $550 million since 1999. The group, which is seeking municipal pension reform, says local governments have nearly $11 billion in combined liabilities.

The Florida Retirement System, which is managed by the State Board of Administration, is more than 85% funded, and has an unfunded actuarial accrued liability of $22.4 billion, according to Moody's.

On Tuesday, the SBA reported that preliminary investment performance figures for fiscal 2014 show that the state pension plan earned a 17.4% return for the year, beating its benchmark of 17.02%.

The plan had a market value of $149.1 billion, which is an increase of $16.7 billion after net distributions of $5.9 billion to participants.

All asset classes earned positive returns during the fiscal year, with the largest earnings achieved by the global equity asset class at 23.52%.

Strategic investments, real estate and private equity asset classes earned 13.19%, 14.92%, and 19.88%, respectively. Fixed income and cash earned 3.78% and .22%.

"While recovery of the financial markets continues, and we are certainly pleased with our current performance, we can't lose sight of the fact that it is the long-term performance that matters most," Ash Williams, the SBA's executive director and chief investment officer, said in a statement. "The 20- and 25-year periods have generated returns of 8.83% and 9.02% respectively."

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