Posts Tagged ‘Pension Obligation Bonds’

Pension funding can skew in the wrong direction if there is an imbalance between returns and expenditures. When managing assets and liabilities long-term, it is best to be cautiously optimistic about expectations. The best practice is to set levels of anticipation that err on the side of caution on both sides of the coin. The…

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A Pension Obligation Bond (“POB”) is a debt instrument issued by a municipal entity such as a Town to fund all or a portion of the Unfunded Actuarially Accrued Liability (“UAAL”) for its pension or OPEB plan. A POB is designed to take advantage of an arbitrage opportunity whereby the Town can issue taxable debt…

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