A proposed set of "sustainability fixes" that just came out for the state's biggest public employee pension plans should go a long way toward reducing the unfunded liabilities of the plans.
The maneuvers should take the funding level up to 100 percent or more of liabilities for the biggest plans by 2045 or so, according to a joint presentation of the proposals by the plans.
It could work out that well. There's at least a chance — if everything goes exactly right in plans that depend, in part, on the investment markets.
Of course there is always risk. A summer hailstorm could flatten the vegetable patch at any time, but why be pessimistic? Well, if pessimism means enough food gets set aside to still get through the winter, that seems to be a sensible way to farm.
To understand the risk in the state's public employee pension plans you need to start with two numbers, or maybe just one, because it's the same number: 8 percent.
That's the expected rate of return on the money invested to pay pension liabilities down the road, and it's also the number used to discount future payments to arrive at how much needs to be set aside.
While it might seem to make sense to have them be the same, with the nice sound of symmetry, that's not the way it's done in the private sector. General Mills still has pension plans, and its expected rate of return last year was 8.5 percent.
To arrive at an estimated pension liability, on the other hand, it used a weighted average discount rate of 4.38 percent. Something like 8 percent simply won't be allowed by the accounting rules.