When markets tank, they take pension funds with them

When markets tank, they take pension funds with them | Smart Remarks:
"And speaking of things that are gonna cost you money…
As you are probably aware, the stock market ain’t doing so hot.
...It could hammer the pension funds of your local municipality and the state, which includes schoolteachers.
And that could cost you money directly, in the form of more taxes.
Here’s how:
In theory, a fiscally-sound pension system rests on a “three-legged stool” made up of investment returns, contributions from employees and contributions from employers (in the case of a public pension system, those contributions come from taxpayers via the federal, state or local government).
Though the exact math varies from state to state and system to system, the basic model is the same, whether you’re looking at Rhode Island or California or anywhere in between.
If the investment returns come up short of expectations, that shortfall has to be made up with higher contributions from the other two “legs” on the stool.
Ultimately, your wallet is one of the “legs.”
The stock market decline of 2008 is one of the big reasons the Pennsylvania State Employee Retirement System, or PSERS, remains in the hole even though it made just under 15 percent (!) last year.
But it was still in the hole, by $35 billion; and the system was assuming a 7.5 percent rate of return this year.
Sure, that could still happen.
Theoretically.
But if it doesn’t – what then?
And how about municipal pension plans?
For example, Lititz’s non-uniformed pension plan has been “severely distressed” for years:"