Former SEC chief: 'opaque accounting puts pensions at risk'

Opaque accounting has been listed among the problems which are causing US pension funds to be at risk, the former regulator chief says.

Arthur Levitt, the former chairman of the Securities and Exchange Commission – who was also the longest-serving chairman - made the remarks to pension officials in New York yesterday.

Levitt said pensions in the US were fraught with problems, which included opaque accounting, conflicts of interest, and the tendency among elected officials to promise valuable benefits and then fail to set aside money to pay for them, the New York Times reported.

He also said that much of the trouble was rooted in pension accounting rules which failed 'to reflect accurately' the cost of benefits that public workers have earned or the value of the assets set aside to pay those benefits.

'We can’t begin to improve the fiscal standing of public pension funds until we can accurately assess their financial health,' he said.

Levitt also criticised the regulatory framework, which allowed softer accounting standards for governments than for public corporations, and made a call for the repeal of the 30-year-old Tower Amendment which limits the SEC's powers in policing government accounts.

Further reading:

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