Public pension funds (or lack thereof)

Business Week has a good article about the public pensions, focusing on state and local governments. Repeating the fiscal pattern we've seen in just about every aspect of U.S. government, between the recession and the big benefit increases made in the preceding economic boom, public pensions went from a 110% asset/liability ratio in 2000 to an 80% one in 2004 (chart). Actually it's much worse than that: the 110% figure was a lie to begin with (likewise for the 80% figure):

One major category of cost isn't disclosed at all: how much retiree health care has been promised to public retirees. No one can estimate how much these promises will add up to, but they're sure to be in the tens of billions, and only some states seem to have put aside reserves for them, according to bond analysts. That's chilling, given how quickly medical costs are rising. After a pitched battle, the Governmental Accounting Standards Board (GASB), the independent accounting standards-setter for state and local governments, has finally begun to require states to disclose these liabilities.... The requirement will be phased in beginning in late 2006.