Most Cities and States are also underfunded in their retirement and health care funds. Of course they don’t stand much chance of going bankrupt with the taxpayers underwriting them.
If given the chance..take a lump sum rather than traditional pension. You can always use that to buy your own annuity..or invest yourself.
Wanna bet? If a city or state declares bankruptcy, the judge can nullify the pension. Whala, no liability anymore.