America's worst-funded public retirement system is considering some tough measures to help prop up its flailing resources.
According to Bloomberg, Puerto Rico's incoming governor has discussed using taxable pension bonds to try to create some cash flow for a very badly impaired system.
As of June, 2011, the Puerto Rican pension system only had assets covering less than 7 percent of its pension obligations; even cash-struck Illinois, going through yet another round of political battles over its own pension problems, was funded at 43 percent..
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While selling debt to help boos the assets is a tough decision, the leader of the Governmental Development Bank for Puerto Rico says that a mix of pension bonds and other unspecified changes is necessary to keep the system from total ruin.
In mid-December, Moody's Investors Service further cut Puerto Rico's credit rating, citing a "lack of meaningful pension reform."
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