Pension-Bond Warnings Go Unheeded by Kansas Leaders
Bloomberg) -- Kansas and Kentucky may borrow billions to invest in cash-strapped pension funds, undeterred by warnings the practice risks driving up taxpayers’ bills to retirees.
The states’ lawmakers are considering following a strategy used more than a decade ago by Illinois and New Jersey, which sold bonds to bolster retirement systems that have since fallen further behind. In January, with stocks close to record highs, a group of state and local-government officials advised against speculating with borrowed money, saying it may backfire if investments sour.
“There’s an exception to every rule,†said Beau Barnes, general counsel for the Kentucky Teachers’ Retirement System, which is backing a $3.3 billion bond to help close a $14 billion shortfall. “If we don’t do something really soon, this problem gets much, much worse.â€
Pension-Bond Warnings Go Unheeded by Kansas Leaders
Bloomberg) -- Kansas and Kentucky may borrow billions to invest in cash-strapped pension funds, undeterred by warnings the practice risks driving up taxpayers’ bills to retirees.
The states’ lawmakers are considering following a strategy used more than a decade ago by Illinois and New Jersey, which sold bonds to bolster retirement systems that have since fallen further behind. In January, with stocks close to record highs, a group of state and local-government officials advised against speculating with borrowed money, saying it may backfire if investments sour.
“There’s an exception to every rule,†said Beau Barnes, general counsel for the Kentucky Teachers’ Retirement System, which is backing a $3.3 billion bond to help close a $14 billion shortfall. “If we don’t do something really soon, this problem gets much, much worse.â€
http://finance.yahoo.com/news/pension-bond-warnings-unheeded-kansas-151850201.html
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