Yet another report shows that the public pension system is in dire straits. This one comes from renowned hedge fund manager Bridgewater Associates and was obtained by USA Today.

The study estimates that public pension funds will earn an annual return of 4 percent or less in coming years, the newspaper reports. And that, in turn, would cause bankruptcy for 85 percent of the funds within 30 years, the study warns.

Public pension plans now have only $3 trillion in assets to invest so that they can pay out $10 trillion of retirement benefits in coming decades, according to Bridgewater. The funds would need an annual investment return of about 9 percent to meet those obligations, the report says.

Many pension plans assume they will earn 7 to 8 percent annual returns, an assumption many analysts say is too high. But even if the plans meet that goal, they will face a 20 percent shortfall, Bridgewater notes.

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The firm looked at a range of different market conditions, and in 80 percent of the scenarios, the pension funds become insolvent within 50 years.

A report issued earlier this year by the Rockefeller Institute of Government says state and local government pension systems have major problems. "Bad incentives and inadequate rules allowed public sector pension underfunding to develop," the study says.

"They mask the true costs of pension benefits and encourage underfunding, under-contributing, and excessive risk- taking, trapping pension administrators and government funders in potentially destructive myths and misunderstanding."

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