David Dodd 10:32 a.m., May 25
Dubious Accounting Hides Greater Pension Woes
An article on page 2 of today's (March 29) Wall Street Journal points out that government pension woes, already considered horrible, may actually be worse. The accounting rules for state and local government pensions "make retirement benefit obligations seem lower than they really are," says the Journal. The General Accounting Standards Board, which is the arbiter of such matters, may move toward changes that would increase the pension liabilities that local governments have by tens of billions of dollars, says the Journal. The article quotes Diann Shipione, who blew the whistle on the City of San Diego's pension shell game. "The current pension deficit disclosure standards have been professionally gamed for a long time," Shipione told the Journal. "The [General Accounting Standards Board] is now fighting to create the environment where greater clarity is the result."