Coming up with bigger contributions to pension funds will require states to make difficult choices about the size of their work forces, their commitment to public services and the viability of their employee benefits, which are often said to be irreversible and protected by state constitutions.<\/p>\n
\u201cThe amount they have to be contributing could potentially be two to three times as much as they\u2019re contributing now,\u201d\u009d said Joshua Rauh, an associate professor of finance at Northwestern University, who has been challenging the way most cities and states measure their pension promises. \u201cIf you don\u2019t want to count on the stock market to pay for all this, this is what you\u2019re going to have to contribute.\u201d\u009d<\/p>\n
Mr. Rauh and a number of other analysts say the states\u2019 biggest problem has been a failure to understand how much benefits will really cost<\/b>. Instead of the states\u2019 models, these analysts have come up with alternatives that more closely approximate those used by insurance companies.<\/p>\n