Huffington Post, 9/14/10

Re “Wall Street Is To Blame For Pension Shortfalls, 9/3/10”:

“The author is right that Americans deserve retirement security, which is why it is so unfair for them to be forced to reduce their own financial security in order to cover underfunded government -employee pensions. That underfunding arose well before the crash of 2008. In fact, taxpayer costs for public pensions started rising in 2001 after deceptive public pension fund accounting was first exposed. (For more on the subject of how public pension funds used misleading accounting to hide liabilitie s and to gain pension increases, see the recent report by former Clinton economic advisor Alicia Munnell at http://bit .ly/dcRHsg). As a result, more and more of every dollar going to government pensions comes from taxpayers, who must cover the costs whenever public pension funds fall short of their investment return assumptions. In that regard, what the author doesn’t tell you is that pension fund boards dominated by government employees regularly adopt unrealistically-high investment return assumptions in order to minimize employee contributions and shift those costs to taxpayers. As a result, government employees end up providing a small portion of their pension costs, all at the expense of taxpayers. Because government pensions were boosted in 1999 and public pension funds earned a fraction of their assumed investment returns since then, California state taxpayers have already paid tens of billions and will pay hundreds of billions more to cover pension costs, all at the expense of their own financial well-being and retirement security.”