[lotsofpulp]

These could happen, except politicians excluded taxpayer funded pensions from any type of oversight, starting with its exclusion from ERISA. Even now, taxpayer funded pensions don't have to follow rigorous accounting standards such as IFRS, and instead choose to use GASB, which are intentionally lenient so it hides the underfunding.

It's telling that once non-taxpayer funded pensions were brought to fully account for their promises, they started disappearing. It's just too costly and too unpredictable to promise something 30+ years into the future. It's ridiculous as a concept, I've never heard of anyone else saying with confidence that they can predict that far into the future, yet we have billions and trillions of dollars of liabilities based on these projections.

[surfearth]

You're correct that poor governance is a big part of the problem. Nevertheless, it is certainly possible for well governed pensions to remain solvent and even run at a surplus. Insurance and annuities are two other industries with the same basic concept. Pool risks together and guarantee a certain level of future benefits based on conservative assumptions (it is not unreasonable to guarantee an inflation adjusted payout if you assume you will generate a market-based return over the long run). One of the problems today is that assumptions have not been conservative.