Lawmakers have drafted legislation to create a new office within the Treasury Department, the Pension Rehabilitation Administration, that would allow pension plans to borrow money to remain solvent while providing retirement benefits for retirees and workers.
According to a report in Chief Investment Officer, under the proposed program, pension plans would borrow money from the PRA and use it to buy conservative investments to cover the cost of paying current retiree benefits each month.
Annuities, cash matching with investment-grade bonds, or duration matching with a suitable bond portfolio were cited in the report as possible investments for these funds.
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