One reason pension plans are perpetually out of money is that they are allowed to assume that they will make around 6-8% a year from investments, rather than fu

One reason pension plans are perpetually out of money is that they are allowed to assume that they will make around 6-8% a year from investments, rather than funding based on a riskless instrument like a T-Bond, which only gets you 2-3% a year. This means most pensions are funded only about half if what they should be. You might think this sounds reasonable, because historically equity markets do return something like 6-8% a year over the very long term, but the pension benefit is fixed and riskless in the sense that the city must always pay it out, so the investment should also be similarly risk free. Otherwise, if investments fail to perform, then taxpayers are always left holding the bag, as we see every time a market downturn occurs. Heads I win, tails you lose...