(online.WSJ.com)  The revamped rules expected to be approved Monday by an accounting-standards group will force governments to record pension costs sooner than they did before and disclose shortfalls more prominently. The changes also will force some public pension funds to calculate retirement benefits using more conservative assumptions.

The new rules could hit pension plans in states like Illinois and New Jersey
particularly hard, and even raise borrowing costs for certain municipalities,
analysts say. "This could be the event that incites a bigger policy
response than what we've seen so far," says Matt Fabian, managing director
at Municipal Market Advisors, a research firm.

The exact impact of the new rules by the Governmental Accounting Standards Board
isn't clear. According to researchers at Boston College, pension liabilities at
126 state and municipal pension plans would jump by roughly $600 billion, or
about 18%. The estimate is based on 2010 financial data and doesn't reflect the
stock market's recent rebound or moves by many U.S. states to rein in pension
costs.

Even with those improvements, the accounting changes are expected to increase total
public-pension liabilities substantially when they take effect starting in 2013.

Many state pension managers downplay the impact of the new rules, arguing that the
changes will merely affect how pension numbers are reported, and not the
substance of the plans' conditions.