I would be very cautious about this. As you know, things can go either way, but as you’ve noted (indirectly), bond yields are at the lower end of the range AND there’s still a fair amount of risk in muni bonds, IMO.
Don’t put yourself in the pensioners’ position! (Yes, I just did that.) Whatever risks you think pensioners are taking, bondholders are taking at least the same risks. Add to that the low interest rates and the fact that stock market and other asset valuations (like real estate) are pretty high — which makes the govt agencies look more flush with cash because they have lower costs/higher revenues for the moment — it just might be better to look at other options for your cash.
