In issuing its pension obligation bonds, the county was particularly concerned about the risk that investment earnings would fall below the pension plan's assumed interest rate
The Substitute LOC covers the principal amount of $100,000,000 and interest coverage in the amount of $11,095,890, which represents 270 days of interest at a maximum assumed interest rate
of 15% per annum based on a 365-day year.
The Substitute SBPA covers the principal amount of $90,000,000 and interest coverage in the amount of $1,035,617, which is equal to 35 days of interest at a maximum assumed interest rate
of 12% per annum based on a 365 day year.
He said this is due to the Financial Supervisory Commission reducing assumed interest rates
, restricting the yield leeway for insurance policies.
The government should immediately change its rules and bring its assumed interest rates
into line with what pensioners can hope to receive.
This massive drop in income is bad enough without adding to the hardship by using assumed interest rates
more on par with crime.
Even though Greenspan said he didn't know how the Fed will vote on the issue next week, the stock market assumed interest rates
will soon rise.