I didn't study the BT issue, but I read a bunch about how California did their pension valuations, and it's a circus. They basically just assume the fund would earn what they want, and project based on that. And needless to say, they assume they're market geniuses. And when it becomes dangerously underfunded, they just screw the newcomers - basically make a Ponzi scheme out of it by making new contributions finance the gaps for the old-timers and have new member to accept much worse conditions then the old ones.