Total unfunded liabilities in state and local pensions have roughly quintupled in the last decade. Mauldin Economics via Federal Reserve and Bloomberg You read that right—not doubled, tripled, or quadrupled—quintupled. That’s nice when it happens on a slot machine, not so nice when it’s money you owe. You will also notice in the chart that much of that change happened in 2008. Why was that? That's when the Fed took interest rates down to nearly zero, meaning it suddenly took more cash to fund future payments. According to a 2014 Pew study, only 15 states follow policies that have funded at least 100% of their pension needs.