Aerospace giant Boeing announced last week that the company is freezing their defined benefit pension plan in favor of a 401(k) style defined contribution plan. The move is designed to reduce future pension liabilities and risks for the company, while still contributing to workers’ retirement accounts through an annual payment based on a percentage of their salary. Most U.S. corporations have adopted such a plan over the last two decades in an effort to shift market risk from the company to the worker. Municipalities, many of which have crippling pension liabilities, would be wise to adopt similar style plans. A major municipal market credit story has been, and will likely continue to be, the unsustainable pension benefits state and local governments have promised workers. Until a shift occurs however, analyzing off-balance sheet liabilities will be a major determinant in our credit selection process.