In California some government workers can retire with 90% of pay, after 30 years.
The “pay” can result from “spiking” whereby accrued sickpay and vacation are taken in a late year to establish a high base year.
So you retire at say 55 with full pay for your lifetime, your spouse’s lifetime, plus platinum health benefits.
If the agency or municipality has not “funded” the annuity with enough to pay the full benefits, they must put in more, each year from their general funds.
Hence they go bankrupt, because they cannot afford the promises previously made.
Ultimately benefits have to go down, or taxes have to go up.
CalPers collects prospectively, based on a complex formula intended to see that there’s enough to cover future pension payments when the employee retires. That formula includes assumptions regarding future investment returns, time in service, anticipated salary increases, etc. When the assumptions prove to be incorrect, they collect “make up” payments to cover anticipated future liabilities. Not making those payments will have a greater impact on future retirees than current pensioners.