For months now, I've been writing about how Wall Street ratings agencies have been pushing for transparency and disclosure with regard to private pension plans. (See my piece in latest Reason for a comprehensive look at that issue.)

Well, now the New York Times is reporting that Moody's is now going to start factoring in public pension liabilities into their evaluations of state debt:

Moody’s Investors Service  has begun to recalculate the states’ debt burdens in a way that includes unfunded pensions, something states and others have ardently resisted until now. States do not now show their pension obligations — funded or not — on their audited financial statements. The board that issues accounting rules does not require them to. And while it has been working on possible changes to the pension accounting rules, investors have grown increasingly nervous about municipal bonds.Moody’s new approach may now turn the tide in favor of more disclosure. The ratings agency said that in the future, it will add states’ unfunded pension obligations together with the value of their bonds, and consider the totals when rating their credit. The new approach will be more comparable to how the agency rates corporate debt and sovereign debt. Moody’s did not indicate whether states’ credit ratings may rise or fall.

This move could go a long way toward ending the games that states have been playing in order to hide their mammoth pension liabilities.