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Former NY Lieutenant Gov: Kansas’ Pension Bond Plan a “Dreadful Idea”

Kansas Gov. Sam Brownback last month proposed issuing $1.5 billion in bonds to help cover the state’s pension funding shortfall. The bonds would allow Brownback to go through with another proposal – lowering state payments to the pension system by $39 million in fiscal year 2015-16 and by $92 million in fiscal year 2016-17. But pension bonds don’t ...
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Kansas Pension Officials: State’s Plan to Delay Pension Payments Could Cost Billions in Long-Run

Kansas Gov. Sam Brownback in December diverted a $58 million payment from the pension system and used the money to plug holes in the state’s general budget. The governor is seeking to delay more state payments to the pension fund, and is also looking to offset some of the costs by issuing pension obligation bonds. But pension officials told lawmakers ...
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San Bernardino Sued By Creditor For Favoring Pension System During Bankruptcy

The bankrupt city of San Bernardino, California has been sued by one of its bondholders for favoring pensioners over creditors during its bankruptcy. San Bernardino has largely kept up with its payments to CalPERS. But the lawsuit claims the city has not extended equal favor to its bondholders. From BusinessWeek: Pension-bond holder Erste Europaische ...
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Kentucky Teachers’ Pension Asks Lawmakers For Funding Help; Will Present Bond Proposal

The Kentucky Teachers’ Retirement System is seeking help from the state legislature in easing its pension obligations. The plan involves the state issuing bonds. Details on the proposal are sparse, but KTRS officials will present their plan to lawmakers on Wednesday. From the Courier Journal: The Kentucky Teachers’ Retirement System is proposing ...
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Louisiana Pension Borrowing Proposal Shot Down

Louisiana lawmakers were floating a plan to borrow money and buy out the pensions of thousands of “vested” retirees – paying them a lump sum payment up front in order to reduce the state’s future pension obligations. But experts and stakeholders testified that the plan was not a good idea. From the Advocate: A proposal to borrow money to help ...
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Michigan To Sell Record Number of Bonds to Finance Pension Shortfalls

It’s a strategy that’s becoming increasingly common—municipalities, straddled with outstanding pension obligations, issue bonds to cover near-term funding shortfalls. In a particularly risky iteration of the practice, cities and states will take the proceeds from selling the bonds and re-invest them into the market. That’s exactly what Michigan ...

Pennsylvania Weighs Risks, Rewards of Pension Obligation Bonds

Pension reform has been the talk of Pennsylvania politics these last few months, and the reasons are equally political and practical: if retirement costs keep rising, the state’s fiscal handcuffs will keep tightening—and they are already uncomfortably snug. That leads eventually to budget-cutting maneuvers, many of which are sure to be politically ...
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The University of California Retirement System Is Scrambling to Cover Funding Shortfalls

When a pension system gives employees and employers a 20-year contribution holiday, you can bet it’ll run into some funding troubles down the line. University of California’s retirement system has been knee-deep in that harsh reality for years now. That has led to the borrowing of billions of dollars to cover funding shortfalls. And the ...
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Pension Obligation Bonds Help Some Governments But Hurt Many More, Says New Report

New Jersey, Illinois, and California. Those are the states that, more than any others, have frequently scrambled to pay down their pension obligations by issuing a financial tool called Pension Obligation Bonds (POBs). Over the last three decades, those three states have issued a total of $25 billion worth of POBs in an attempt to ease the heavy burden ...
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