Tuesday, January 25, 2011

SEC Probes Statements on Illinois Pension

Finally, a meaningful investigation out of the SEC. Reuters reports:
The Securities and Exchange Commission has started an inquiry into public statements by Illinois officials about the state's underfunded pension fund, the Wall Street Journal reported on Tuesday.

The state's governor's office confirmed the SEC inquiry late on Monday, the newspaper reported.

It quoted the governor's spokeswoman, Kelly Kraft, as saying the inquiry is focused on public statements concerning a measure passed last year intended to shore up the retirement system.

"We are fully cooperating" with the inquiry, it quoted her as saying. "We feel our disclosure was always accurate and complete."

The newspaper, citing Robert Kurtter, a managing director in the public finance division at Moody's Investors Service, said as issue being examined is whether Illinois was taking future savings and treating them as current reductions in the cost of the pension fund.

A measure Illinois took to save costs was to raise the retirement age for newly hired Illinois workers.

The newspaper said Kurtter mentioned the inquiry in a report released on Monday evening.

The SEC informed the state about the inquiry in September, the newspaper quoted Kraft as saying.

She said Illinois has included mention of the SEC inquiry in documents being prepared for the sale expected in the next few weeks of an approximately $3.7 billion bond, the newspaper said.

Illinois' underfunding of its pension system is one of the worst among U.S. states.
Wow, is Illinois government desperate, or what? Let's see if the SEC follows through and fully develops this investigation.

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