From California to Florida, U.S. public pensions are reviewing assets invested in Pimco.

The stabilization in pension-funding gaps marks an encouraging sign for states and municipalities, potentially providing officials with more breathing room to allocate budgetary resources toward services and infrastructure as well as retiree benefits.

The 25 largest U.S. public pensions face about $2 trillion in unfunded liabilities.

Chicago moved forward in its effort to rescue a pair of pension funds and stabilize its finances when Illinois Governor Pat Quinn signed a bill that cuts benefits and makes employees pay more for retirement.

The delay is reminiscent of the political gridlock that plagued Illinois for years as its credit rating sank.

The pension law, passed a bill in December to repair the worst-funded U.S. state pension system, and Quinns tax proposal havent changed Illinoiss standing as the lowest-rated state.

The cartoon snake, which Illinois Governor Pat Quinn used to symbolize retiree costs that are strangling the states finances and undermining its credit rating, is now smothering Chicago.

Chicagos credit rating was cut one level to Baa1 by Moodys Investors Service, which cited massive pension liabilities.