Early in 2014 SNWAM will begin our review of 2013 municipal financial results. Annual reports from the states will be analyzed and reviewed first because they provide the timeliest financials. In addition, assessing state credit quality first is important because of the influence on many of the local credits within a state, given that state performance gives the broadest picture of the economic fundamentals in the area and because states fund or subsidize many local municipalities. When we review the state’s combined annual financial report we look at many factors and rank the states accordingly. One of those factors is pension liability. Last week we were pleased to see Bloomberg’s Municipal Fundamentals Team catch up and confirm our rankings of the best and worst funded state pension plans. The top ranked and best funded state pension systems are Wisconsin, North Carolina, Washington, South Dakota, Tennessee, and New York with over 90% of the assets needed to fulfill their obligation. Wisconsin stands out because it has 99.9% of the assets required to fund its future pension liability. In all, these states are doing very well at managing their future obligations. On the bottom of the pension funding list are Illinois, Kentucky, and surprisingly Connecticut with 40.4%, 46.8% and 49.1% funding ratios, respectively. These states are failing to manage their future commitments. These rankings are marginally affected by differing actuarial assumptions between states, but by and large they tell the story of those systems which are stressed and those which are succeeding. We will keep our clients apprised of our findings in the coming months but we don’t anticipate much change in the top and bottom performers without material state legislative action.