This is from an essay I wrote several months back
The three big government pension funds in California are currently short of money to provide the promised benefits. How did this happen? Well instead of putting the proper amount into the fund the government used the money for other purposes and made the fund whole by raising the projected rate of return.
Here is a quote from yesterdays news
The SEC's civil case, for which New Jersey paid no monetary penalties, concerned $26 billion of municipal bonds sold by the state between 2001 and 2007. It charged the Garden State with tricking investors into believing it was adequately funding the two largest funds in the $66.9 billion New Jersey retirement system.
Among other things, the SEC said, the state didn't disclose in bond sale documents that it had abandoned a five-year plan to fund the pension plans, the $34 billion Teachers' Pension and Annuity Fund and the $28 billion Public Employees' Retirement System.
I wonder when the SEC will get around to New York, Illinois, and California and then work there way through the rest of the states and then to Municipalities over the land
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