Count on boring issues like this becoming hot topics. This article was about the Detroit bankruptcy but, one way or another, the issue will come to Illinois in a big way.

The discount rate is a key assumption driving measurement of unfunded pension liabilities. Politicians and unions like to inflate it so they can understate unfunded liabilities. But in bankruptcy, that reverses because pensioners want to inflate the size of their claims, requiring a lower rate assumption.

 

The great discount rate flip flop