Pension Gap Spells Muni Trouble

Gillian Tett, Financial Times February 24, 2012

In recent months, America’s mighty Securities and Exchange Commission has been making US local government officials nervous. The reason? In 2010, New Jersey settled civil fraud charges brought by the SEC for allegedly misleading bondholders about the funding of its pension.

Since then, the SEC has been scouring other offerings in America’s $3tn plus “muni” market. For as fiscal pressures rise across America – and investment returns tumble – the level of pension underfunding is rising.

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Pension Gap Spells Muni Trouble

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