An Unsolvable Math Problem: Public Pensions May Be Underfunded By As Much As $8 Trillion

We then adjusted the return on asset assumption down from the 7.5% used by most pensions to the 4.0% suggested by Mr. Gross and found that true public pension underfunding could be closer to $5.5 trillion, or over 2.5x more than current estimates.  Others have suggested that returns should be closer to risk-free rates which would imply an even more draconian $8.4 trillion underfunding.   ... the country's 15 million union employees may not be so happy about supporting their political candidates if they knew their retirement plans were insolvent... much better to let the system break in 20 years then fix it with a massive tax increase and subsequent taxpayer bailout after convincing the electorate that the problem was somehow created by top earners not paying "their fair share." After all, it's only $23,000 per man, woman and child.