Pension obligation bonds (POBs) may re-emerge as a key financing tool for unfunded pension liabilities although funding ratios for public pension funds could increase in the next several years, says Standard & Poor’s Rating Services. According to S&P, the key to this re-emergence after a two-year gap will depend upon actual investment performance in 2008 and 2009, the ability of plan sponsors to make actuarially required contributions in light of uncertain economic and revenue conditions, and burgeoning liabilities for other post-employment benefits. The agency also expects to see increased average pension funding levels over the next several years as public pension fund assets returned a healthy 11.9% on average between 2003 and 2006. 

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