The raiding of pension plans is a back-handed way for companies to get access to workers' and retirees' pension money that otherwise would be off-limits to them. This type of raiding began in 1980 when foreign investors got wise to a loophole in the federal private pension law that allowed them to finance the takeover of A & P with pension money. All they had to do was cancel the plan and pay workers and retirees their benefits that had been frozen at the time of termination. Then they were free to scoop up any money over that amount--misdefined as the "surplus."

In 1984 the Reagan Administration made it even easier to get at pension-plan money. It issued guidelines allowing companies to siphon the surplus from ongoing plans using "sham" terminations, a technical maneuver to restart or continue a plan at a bare-bones funding level. This opened a Pandora's box and encouraged even more firms to pull out money. At last count, more than 1,400 companies have drained $17 billion of so-called "surplus assets" out of conventional pension plans to finance takeovers, leveraged buyouts and other short-term ventures.

The bottom line is that the "unfunded liability" crisis is, if not exactly fictional, certainly exaggerated to an outrageous degree. Yes, we live in a new economy and, yes, it may be time to have a discussion about whether certain kinds of public employees should be receiving sizable benefit checks until death. But the idea that these benefit packages are causing the fiscal crises in our states is almost entirely a fabrication crafted by the very people who actually caused the problem. It's like Voltaire's maxim about noses having evolved to fit spectacles, so therefore we wear spectacles. In this case, we have an unfunded-pension-liability problem because we've been ripping retirees off for decades – but the solution being offered is to rip them off even more.