This Southeast Missourian article (link via Combest) opens up discussion on the state of public pension funds in light of the economic downturn. Public pension funds are problematic right now, because defined-benefit plans promise individuals the same amount of return from an unstable economy as they would receive from a stable economy — regardless of how much the investment has lost value.

Investment losses have turned a source of revenue into a deficit, which has hurt the pension funds. As a result, current public employees could see a rise in contribution payments.

For more detailed information regarding public pension funds, be sure to read the Show-Me Institute’s policy study on the subject, “Missouri’s Challenge: Managing Long-Term Employee Benefit Costs,” by scholar Richard C. Dreyfuss.