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In Kentucky, the Pew Center on the States recommended issuing pension bonds along with other reforms to cover an ever-growing unfunded liability that now stands at about $33 billion.
Yet a legislative task force studying the state’s pension crisis rejected that recommendation in November and instead embraced other recommendations, such as repealing cost-of-living increases for new retirees and moving workers to a hybrid plan that blends defined benefits with defined contributions.
Other governments continue to take the plunge. Fort Lauderdale approved borrowing up to $340 million in pension obligation bonds to cover much of the city’s $400 million in unfunded pension liabilities at an estimated 3.9 percent interest rate.
Last month, officials in Baltimore County, Md., sold $256 million in pension bonds, projecting the move will save $343 million over 30 years.
"Given that interest rates are at historic lows and Baltimore County’s superb bond rating, I have every confidence that this pension bond sale will benefit taxpayers over the years," Councilman Tom Quirk said.
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