This recent op ed in the Wall Street Journal cautions that not only are pension funds under-funded, but they also have a very high portion of their assets held in risky assets. Pennsylvania receives special mention as a large fund holding risky positions (79% of PSERS assets as of 3/31/2014 were held in equities, commodities, and hedge funds — all high risk assets). What is the risk? The risk is that a large market downturn erases pension fund balances, making the under-funding problem even worse. As you may recall from one of my PSER posts, the 2008 stock market drop is one of the contributing factors to PSERS current $32B underfunding problem. So it is not merely a hypothetical risk.
Note: access to the article linked above might require a WSJ online subscription (I accessed it the first time without a problem, but on subsequent tries it was behind the WSJ paywall.)