If you believe what the Pew Foundation or Brookings Institution has to tell you or The New York Times or The Wall Street Journal, unfunded pension liabilities threaten to sink state and local governments nationwide. Liabilities are painted as the issue the public needs to know about when it comes to retirement.

Estimates of the debt facing public sector pension plans range from $2 trillion to $4 trillion. Those seem like big numbers — and they are — but those obligations are to be paid out over the next 30 years. It’s for good reason that only one public sector pension fund has run out of money since the Great Depression. Yet editorial pages across the country use the unfunded liability argument to advance a right-wing agenda of cutting people’s benefits.

In Detroit, public sector retirees have lost cost-of-living adjustments, meaning that they will get poorer as they age. In San Jose, California, pension reform there has led to massively increased turnover as experienced public sector workers depart for parts of the state where their pensions will be secure.

What the obsession with unfunded liabilities misses, however, is the actual and current emergency facing pension funds: Wall Street grifting. Valued at more than $5.3 trillion, public pension funds have for decades been a cash cow for finance. Pensions buy up shares in private equity and hedge funds, complex derivatives and foreign currency at prices higher than what they are worth — earning Wall Street billions in profits, according to Edward Siedle, a leading expert on public pensions. Leading banks have recently been caught in scandal for manipulating foreign exchange prices for their pension fund clients.

The most underreported data point in this regard is a 2007 dispatch from the Governmental Accountability Office (GAO), Congress’ investigative arm. It examined 24 pension investment consultants, by far the most influential actors when it comes to where pension assets are invested.

The report found that 13 of the 24 — including the largest players in the business — had significant conflicts of interest, largely consisting of accepting fees and other considerations from investment firms the consultants recommended. Those 13 had, at the time, over $4.5 trillion in assets under advisement. The GAO found that the average return by the pension funds advised by conflicted consultants was 1.3 percent lower than other plans.

The report’s enduring salience prompted Rep. George Miller, D-Calif., the top Democrat on the House Education and Labor Committee, to request in June that the Department of Labor further investigate conflicts of interest among investment consultants.

Besides underperformance caused by conflicted investment consultants, management problems are widespread. The mortgage-backed securities and complex derivative products that caused the financial crisis were bought in massive quantities by public pension funds, which were left holding the bag when the schemes imploded.