State and local governments across the country are facing underfunded pension plans and increasing annual pension costs. Baird has a qualified and experienced team of professionals that are well versed in developing alternative funding solutions for unfunded pension and other post-employment benefit liabilities. This includes the issuance of Pension Obligation Bonds (POBs) to pay off all or a portion of the unfunded liability. POBs may be cost-effective when the interest rate on the bonds is less than the actuarial rate on the unfunded liability. There are potential benefits and risks associated with POBs that must be evaluated thoroughly.


Baird’s banking team has provided a wide-range of local and state governments analysis and recommendations related to pension and other post-employment benefits. Focusing on long-term solutions that meet our clients’ needs, we leverage our experience and depth of resources in creating successful financing solutions.


  • Model unfunded pension liability amortization payments;
  • Estimate potential savings;
  • Explore structuring alternatives;
  • Conduct sensitivity analysis;
  • Explain potential benefits and associated risks, including risk mitigation strategies; and
  • Educate Councils/ Boards and the general public on pension bonds.


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Illinois Pension Obligation Bonds

Baird’s Illinois Public Finance team is knowledgeable on Illinois Pension Obligation Bonds and the potential benefits and risks associated.

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