The Government Accountability Office reports that many states have not been setting aside sufficient funds to pay the pensions owed to public employees, a practice which auditors predict will lead to serious financial difficulties as more and more of these employees retire. Unlike private businesses, states are not subject to regulations that would force them to maintain the funds, though workers in states such as California and New York have used lawsuits to bring state contributions back up to the required levels.
See "Report to Senators Says Many States Are Lax in Funding Their Pension Plans", Mary Williams Walsh, The New York Times, February 28, 2008