This week, Veronique de Rugy examines the condition of states’ pension funds. While official reports claim that in 2008 state pensions were underfunded by $452 billion, with total liabilities of $2.8 trillion, these numbers change dramatically when private sector accounting methods are applied. Using methods that are required for private sector pensions, total liabilities for 2008 balloon to $5.2 trillion and the unfunded liability rises to $3 trillion.