By Steven Malanga, includes “… Chicago’s bond offering would raise money for the pension system, where the money can then be deposited in financial markets to earn returns. The idea sounds simple. … The problem is that those kinds of returns are far from a sure thing. That’s why pension bonds have been behind some of the biggest fiscal meltdowns in recent years. Stockton, California, for instance, borrowed $125 million in 2007 to bolster its underfunded retirement plans … The system’s investment professionals promptly lost more than a quarter of the principal …”