In 2024,  Omaha added more information to the city's  financial statements due to changes in accounting standards.  One of the changes includes more information on the city's long-term liabilities, of at least $1.1 billion.    


>Consequently, unrestricted net position showed a $1,146.9 million deficit at the end of this year. This deficit does not mean that the City does not have the resources available to pay its current liabilities. Rather, it is the result of having long-term commitments that are greater than current available resources. Specifically, the City did not include in past annual budgets, the full amounts needed to finance the future liabilities arising from workers’ compensation and healthcare claims ($69.6 million); civilian and police and fire net pension liabilities ($984.3 million), compensated absences ($92.7 million), and post-employment benefits ($443.7 million). The City will include these amounts in future years’ budgets as they become due.  
[https://finance.cityofomaha.org/images/Finance/Accounting/2025/City\_of\_Omaha\_2024\_NonGAS\_FS\_Final.pdf](https://finance.cityofomaha.org/images/Finance/Accounting/2025/City_of_Omaha_2024_NonGAS_FS_Final.pdf)  


  
Omaha’s pension system — covering both the **Police & Fire** and **Civilian** plans — assumes its investments will earn **7.5–7.75%** a year. Those numbers are used to calculate the city’s future obligations, and the higher the assumed return, the smaller the pension liability appears on paper.

 The long-term average doesn't match the assumptions:

* **T**he expected long-term rate of return in the statement is closer to **6%**
* 10-year average actual return: about **7.2%** 
* The only way to get 7.5-7.75%  returns is to ignore the negative return years **(due to the negative returns, you need to compute the average using a geometric mean, verse a simple average)**

That means the City’s reported funding levels — around **57% for Police/Fire** and **51% for Civilian employees** — depends on optimistic math.  
  
if Omaha’s pensions were valued using the **6% expected returns**: 

* The **funded ratio would likely fall from \~55% to \~45%**.
* The **unfunded liability would jump from about $1.0 billion to roughly $1.3–1.4 billion**.
* the annual required pension contribution — the amount the city must budget each year — needs to rise
* Under S&P’s scoring model, that could move Omaha’s credit standing **down** 

At a minimum the city should use the 10 year actual rate of return, 7 - 7.25% as the new assumption and update the investment mix to match. 

The City of Omaha's Pension Liabilities look Understated