Bang for your (bor­rowed) buck

The Washington Post Sunday - - BUSINESS -

New rules adopted by the Gov­ern­men­tal Ac­count­ing Stan­dards Board al­low gov­ern­ments with trou­bled pen­sions to dra­mat­i­cally shrink their fund­ing gap by bor­row­ing. Ham­den, Conn., is­sued $125 mil­lion in pen­sion bonds but low­ered its short­fall by about $320 mil­lion.

Gov­ern­ments that bor­row money to fund their pen­sions of­ten pay less into their pen­sion funds in fu­ture years than they are sup­posed to. That can leave the funds in worse shape than they were when the debt was sold, even if the pen­sions earn more on the bor­rowed money than taxpayers owe in in­ter­est. See be­low how the top-20 big­gest pen­sion bonds since 1996 have fared.

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