Budget shortfalls in Illinois and Kentucky have forced public pension plans there to sell off assets to meet obligations. Although officials at the funds downplayed the moves, they conceded that if their underfunded status and benefit liabilities continue into next year, they might have to reconsider their funds’ investment strategies and shift out of illiquid investments.
It’s difficult to determine how widespread the problem may be, but observers note that with many states facing budget woes, it’s conceivable that many more pension funds will begin selling assets to meet liabilities.
— Money Management Letter
