From the summary:
It is risky for state and local governments to shore up pensions with such bonds except in certain circumstances.
The brief’s key findings are:
* Some state and local governments issue Pension Obligation Bonds (POBs) to raise cash to cover their required pension contributions.
* POBs allow governments to avoid increasing taxes in bad times and could reduce pension costs, but they pose considerable risks.
* Those who issue POBs are often fiscally stressed and not well-positioned to handle the investment risk.