Wohlforth is right.  Pension bonds are a highly risky strategy, more so than we would expect from our government.  Not many pension funds are making their target yields in recent years, and there is no indication this is going to change in the foreseeable future. Some countries actually have negative interest rates on their bonds, and in recent years stocks aren't much better.  30 year US obligations are at 2.3% and you can get a home loan at 3.5% so why is the State satisfied paying 4%. Oregon has tried this strategy with very mixed results.  Seems like a dumb idea to me.