Not when you're taking small data samples. If you look at past years of investment, you'll either have a sample size too small to be meaningful, or your start lumping years that don't reflect today's realities into the mix.

These investments are basically saying, "the market will always get 10% return", so we're going to put future tax payers on the hook for 10% returns. The average guy investing his 401k doesn't get guaranteed results at the expense of other people's work.

Even if there is a historical 10% return that holds, that's still going to produce underfunded (and overfunded) pensions based upon fluctuation in yearly returns and population dynamics (like if an unusually large number retire in a down year).

Then there is the pension spiking, and maybe even no consideration that people are paying into the pension at low rates but tend to retire at high pay rates.

As individual you can't really compensate for the update and downs of the market but a pension system with an eye on the long term could do this. Sometimes it's overfunded, sometimes underfunded but in the end it will converge to the average.

> Based on what else can the average guy invest his 401k?

That's a determination the average guy has to make, and he doesn't run the risk of bankrupting the entire state when he misjudges his risk profile.

I agree funding our way out of this mess is the right solution, with the caveat that there might not be enough local revenue to do so, in which case the pension should be transferred to the US Pension Guarantee Corp and funded by the federal government.

What about preventing this from happening going forward?

That's largely already happening with the shift from defined benefit plans to defined contribution plans.

It is not necessarily a better outcome for the employees but it has better alignment of incentives and doesn't create obligations for future taxpayers.

Are there any state governments that have shifted to defined contribution, especially for the politically untouchable judges and police pensions?

For me it's closer to "it worked in the past but even if it doesn't I'm going to be in the same boat as basically everyone else". Which is very different than the kind of promises pensions make.