Truthful pension account looks like this (from page K-98 of Berkshire Hathaway’s 2017 Annual Report):
Untruthful pension accounting looks like this (from page 45 of CalSTRS’s 2017 Annual Report):
The difference is explained here. The consequences are illustrated here:
Pension spending by schools and governments is a deadweight cost that reduces funding for teacher and public safety jobs and wages, courts, parks, colleges and universities and aid to the needy, causes local governments to hike regressive fees and fines, and diverts proceeds from tax increases to past debts rather than new services.
Untruthful accounting that hid the existence and true size of pension obligations got us here, as explained at More Pension Math. One result is that more than $1 trillion — 20x the amount stolen by Bernie Madoff — is being stripped from schools and governments in California and without advance disclosure to, or the consent of, voters. In the absence of reform, pension deadweight costs will continue to climb and to devastate civil society in California.
California’s state legislators and governor have the power to address this problem.