January 25, 2008
State approves sale of $2B in POBs
The State Bond Commission today unanimously approved the sale of $2 billion in pension obligation bonds to reduce the unfunded liability of the Teachers' Retirement Fund. The approval will allow State Treasurer Denise Nappier to move forward with the sale of bonds this spring.
During the 2007 session of the General Assembly, Nappier proposed the bill that authorized the sale of bonds to reduce the unfunded liability of the Teachers' Retirement Fund - which stands at $6.9 billion - and requires the State to make the actuarially-required payments into the Retirement Fund each year.
"With interest rates at historic lows, we expect that the cost of borrowing will be relatively low - somewhere between 5.25 and 5.6 percent," Nappier said, "a rate far lower than the 8.5 percent currently being paid on the unfunded liability."
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