Inscor Inc. is Poised to Help Relieve Municipal Distress |
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With few other low-cost solutions to the problem available and only ever-rising costs looming, Inscor (OTCPK – IOGA) has an opportunity to effect real change in government financial management and generate significant revenue for itself in the coming years. On May 17, 2013, Goldman Small Cap Research published an Article on Inscor Inc. (OTCPK –IOGA). For your convenience, a copy of the article can be found below. Please see click this link for relevant disclosures and disclaimer and the recent IOGA report. Inscor Inc. is Poised to Help Relieve Municipal Distress Many state and local governments across the country are reeling from financial distress. In fact, in the past 2 years over two dozen cities, including San Bernardino and Stockton, both of California, and Harrisburg, Pennsylvania, have even been forced to file for bankruptcy protection. A growing number of industry pundits and watchers believe that dozens more are considering following suit. Moreover, the number of defaults may outpace bankruptcies. There are a number of reasons cited as to how and why cities got themselves in this mess. Still, there appears to be one alternative, which is offered by Inscor Inc. (OTCPK – IOGA), that can address the structural issues as a whole, before problems escalate into a point of no return. The casual observer can easily ascertain that one of the primary issues afflicting states, cities, and municipalities is an increase in spending and a steady decline in tax revenue and fees, which has led to the current state of financial distress. However, when one lifts up the proverbial hood of these organizations’ books, it is easy to see that the real culprit may be unfunded retiree health care and Other Post-Employment Benefits (OPEB). These figures total an estimated $1.5 trillion in unfunded liabilities but can be addressed by Inscor’s innovative and inexpensive approach. For example, according to an article by Heartland.org, 23,000 employees and 15,000 retirees of Cook County, Illinois, which includes the city of Chicago, receive retirement benefits from the county. Highlighting the current state of affairs, the funding ratio of the retirement benefits has dropped to north of 50%, which is down from 90% just 13 years ago. Plus, health care costs in the county are 40% higher per employee on average than in the private sector. Although many states and municipalities have balanced budget requirements, it is not uncommon for the organization’s accounting procedures to exclude these liabilities from the expense line items, thereby sidestepping the balanced budget requirements. These accounting practices illustrate the desperate need for a real solution early in the process that does not include raising taxes, or dramatically cutting spending. The innovative Inscor (OTCPK – IOGA) approach is a low-cost solution similar to those used by Fortune 500 companies and Inscor (OTCPK – IOGA) that is tailored toward the 67,000 governmental and agency markets in the U.S. The Inscor "FIT" (Financed Insurance Trust) combines the procurement of specifically-designed life insurance on active employees using funds borrowed from the financial sector, or bond issuance, and secured by the insurance policies themselves. This method strategy generates substantial cash flow to fund these OPEB liabilities at reduced costs to the municipalities. As a result, a FIT OPEB plan can provide a cash stream to support each year’s OPEB obligations, plus fund future OPEB liabilities with fewer spending increases, tax increases, or reduction in benefits. Plus, with interest rates at historical lows, some municipalities can benefit from very low initial costs. With few other low-cost solutions to the problem available and only ever-rising costs looming, Inscor (OTCPK – IOGA) has an opportunity to effect real change in government financial management and generate significant revenue for itself in the coming years. GSCR was paid by a third party for this article. Compensation was in cash. |