The New York Times reports:
As cities and states struggle with ballooning retirement costs, accounting rule makers started an ambitious project Thursday to force state and local governments to issue better numbers and reveal the true cost of their pension promises.
The effort is likely to take years, and to be contentious from beginning to end. In the meantime, more places are likely to end up like Vallejo, Calif., which declared bankruptcy earlier this year after locking itself in to paying police officers and firefighters benefits so costly that they swamped the city’s finances.
there's much more:
nearly one-fourth of large public pension plans had used “skim funds” — accounting devices that allow officials to declare certain investment income to be “excess,” skim it out of the pension fund, and spend it on other things. Skim funds are not allowed in the private sector.
New Jersey and San Diego had versions of skim funds, and won “excellence in accounting” awards from the Government Finance Officers Association for many years while operating them. Each ended up with far less money in its pension fund than its books showed. The Securities and Exchange Commission found that San Diego had committed securities fraud by overstating the soundness of its pension fund; it is still investigating New Jersey.
The rules for the government are different.
