Bernie Madoff used deceptive accounting to steal $50 billion. California’s pension funds used deceptive accounting to steal $1 trillion. How that deception occurs is explained here. The motive is explained here.
Most of Madoff’s victims were rich. Most of the California victims are not. They are schoolchildren, young teachers, park users, justice seekers, tuition payers, taxpayers, train and bus riders, the needy, future public employees, and local government retirees.
Madoff is no longer a threat but California pension funds are. They’re still using deceptive accounting every day to hide more liabilities and costs. They don’t have to do so. They could be truthful, like the pension funds here. Defined Benefit plans are not the problem. The problem is untruthful financial reporting and funding of DB plans.
Truthful accounting matters. California’s pension funds should tell the truth.