* State employee contributions to be raised to 10 pct * Officials proposing to freeze defined contributions * More taxes will finances increase in pension costs SAN JUAN, April 3 (Reuters) - Lawmakers in Puerto Rico are expected to approve legislation on Thursday to reform a woefully unfunded public pension system that risks to run out of money in five years. A major issuer in the $3.7 trillion U.S. municipal bond market, Puerto Rico has seen its credit rating downgraded to near-junk status amid Wall Street's concerns for the cash-strapped finances of the Caribbean Island. Any further drop in its ratings to below investment grade could lead investors to sell Puerto Rican bonds, which are...
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