Former SEC chief: 'opaque accounting puts pensions at risk'
Arthur Levitt says inaccurate accounting rules and a poor regulatory system mean the US pensions system is fraught with problems
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:
US Treasury to investigate audit market