I don't always agree with Alicia Munnell at the Center for Retirement Research, but when she talks about the pros and cons of pension obligation bonds, it's hard to ignore her warning: While POBs can deliver budget relief to cash-strapped states, they are fraught with risk.
Which is why, she says, "(POBs) are often inappropriately used by the desperate and irresponsible."
The cities of Detroit and Stockton, California, know this all too well. POBs played a role in both their bankruptcies.
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