On a per capita basis, the unfunded liability for Chicago’s pension funds covering city, municipal, police, fire and labor workers is at $2,533, putting it just behind Boston’s leading amount of $3,715.

"While we're cognizant the funded ratio has been moving in the wrong direction, we're making a conscious effort to work with all the stakeholders to come up with a comprehensive solution that will raise the ratio over the next several years," Dana Levenson, Chicago's Chief Financial Officer said in a statement.

In spite of the rankings, analysts at S&P and in Chicago said there is no cause for alarm. S&P assigned Chicago an AA- general obligation rating, its fourth highest, which means the ratings firm believes the city has a strong capacity to make principal and interest payments.

“You have to put it in perspective of everything else,” said Parry Young, lead analyst for the S&P report. “We look at the economy, debt and administrative factors.”

The S&P report found that Chicago’s pensions were only 64.5% funded compared to an 84.7% funding ratio in 2000. That decline has the Civic Federation, a Chicago government watchdog group, concerned.

“It’s not at a point of crisis, but it is something that needs to be watched,” said Laurence Msall, president of the Civic Federation, a Chicago-based watchdog group. “It is something that is very important for the financial health of the city and a very important issue that needs to be addressed.”