Legal

No changes have been proposed to city pensions, which the commission said now consume 18 percent of the city budget, up from 3 percent in 2003.

Swaps are what investors use to help guard against risk. Theyre bought by pension plans and retirement funds to protect against fluctuations in interest rates, meaning they affect most people who own annuities.

The proposals were quickly dismissed by Detroits emergency manager, Kevyn Orr, who said any sale would not only kill a proposal to pump $816 million into the citys underfunded pension systems, it would also hurt residents.

The new deal would increase to $916 million the amount the plan would contribute to reduce cuts to retiree benefits.

New Jersey is rated three steps below benchmark debt, with a negative outlook. A one-step downgrade would place it with California and Illinois in the single-A category.

In the Calpers case, S&P and Moodys base part of their arguments on a California law that they say protects them against retaliation for expressing opinions.