This is just another example of how can kicking coupled with over optimistic future assumptions gets you in trouble. In this case the biggest fighters against the bankruptcy are those holding general pension obligation bonds. You know those bonds that were going to be the savior of the pension system because you were going to borrow at 3% and make up your shortfall with a projected 8% return. Illinois has all kinds of these bonds outstanding. At least City of San Diego hasn’t gone down this path although I do believe Filner did mention this as a solution during the campaign.
It’s probably wise to assume that if you stand to get a public sector pension much above the median citizen’s income and/or free health care the day is probably coming when they are going to claw some of that back. I definitely wouldn’t count of being able to spend your defined benefit contribution for the rest of your life in full. The mathematical odds are stacked pretty high against you.
