Of the roughly $4 trillion in assets managed by public pension funds in the United States, more than two-thirds are allocated to risky investments like equities, and alternative vehicles, including private equity, real estate, and hedge funds, according to Pew research. That means retirement systems' ability to meet their commitments are subject to stock market swings.

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"It's like the gambler who's on a losing streak but keeps betting in the hope of making up some of the losses," wrote Merrill Matthews, a scholar at the conservative-leaning Institute for Policy Innovation "If most public pension funds were already underfunded last year, what does that mean today, when the market has been in a six-month slide?"

But some researchers say the crisis feels bigger than it is. The gap in funding for pension plans is "often a huge and scary number," explained Louise Sheiner, policy director at The Hutchins Center on Fiscal and Monetary Policy. But "for most (certainly not all) plans, there is no imminent crisis in the sense that the plans are likely to exhaust their assets within the next two decades."

Of the roughly $4 trillion in assets managed by public pension funds in the United States, more than two-thirds are allocated to risky investments like equities, and alternative vehicles, including private equity, real estate, and hedge funds, according to Pew research. That means retirement systems' ability to meet their commitments are subject to stock market swings.

*

"It's like the gambler who's on a losing streak but keeps betting in the hope of making up some of the losses," wrote Merrill Matthews, a scholar at the conservative-leaning Institute for Policy Innovation "If most public pension funds were already underfunded last year, what does that mean today, when the market has been in a six-month slide?"

But some researchers say the crisis feels bigger than it is. The gap in funding for pension plans is "often a huge and scary number," explained Louise Sheiner, policy director at The Hutchins Center on Fiscal and Monetary Policy. But "for most (certainly not all) plans, there is no imminent crisis in the sense that the plans are likely to exhaust their assets within the next two decades."