Another Pension Fund Fraud
December 17, 2012 Leave a Comment
Megan McArdle – Assets in Name Only
Big news in pensions today: Silverdex, a major US-based conglomerate with fingers in just about every economic pie, from mining to solar cells, turns out to have been stuffing its main pension fund full of . . . it’s own corporate bonds. For decades. It’s still not clear how this happened without anyone noticing, but essentially the pensions that current workers have been counting on for thirty years turn out to be backed by nothing more solid than the company’s promise to pay. Amazingly, when confronted by reporters about this behavior, a representative declared that this was a big fuss over nothing.
I don’t really know how to say this, but sorry, I lied a little bit. I’m not talking about a private company at all, because of course, if a private company did this, it would be completely and totally illegal. Regulators would have shut this down decades ago and probably at least a few lower-level executives would have spent a little time in the pokey. Instead this is, of course, a description of how the United States Social Security “trust fund” works.
Previously – Steve Crowder and I Got Taken in by a Ponzi Scheme