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Keep Pension Funds Safe !

April 21, 2008

‘Having pension funds insure bonds seen as too risky’ ~ is the conclusion of Reuters recent analytical article by Joan Gralla:

“NEW YORK (Reuters) - A proposal by California to use state pensions to back municipal bonds is drawing criticism from some other U.S. states and investors who prefer a private-sector solution and one that would not imperil retirees.

The municipal bond market lost faith in bond insurers after their mult-ibillion dollar write-downs related to sub-prime mortgages shook confidence in the soundness of their finances.

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Those missteps cost several bond guarantors the top-notch ratings that investors demand, slicing demand for insurance that had been used by half of the $2.6 trillion muni market.

In response, California Treasurer Bill Lockyer last month proposed having state pension funds form a new bond insurer, an idea Rhode Island said it would support.”

Click here for the full article.

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Written by Be Safe Insure · Filed Under Life, Other Insurance, Retirement 

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