Illinois Losing Rally as State Fails to Fix Pension: Muni Credit
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Investors in the $3.7 trillion municipal market assumed Illinois lawmakers would fix the worst-funded U.S. state pension system. The legislature’s latest failure is showing buyers the cost of inaction.
Legislators left Springfield, the capital, May 31 without mending underfunded retirement plans that they’ve neglected for two decades. Both Democratic-led chambers passed proposed bills in the first 10 days of May, spurring a 0.45 percentage point drop in the yield penalty on taxable Illinois pension bonds maturing in June 2033. That was the steepest monthly rally in at least three years, data compiled by Bloomberg show.