(Newsroom America) -- In a new study released Monday found that the largest 100 public pension funds have some $1.2 trillion in unfunded liabities, $300 billion more than the $900 billion the funds self-reported, Reuters said.
The study, conducted by the actuarial firm Milliman, used different ways to value assets and measure liabilities to come up with an aggragate funding level of 67.8 percent. The pension systems had reported a median funding level of 75.1 percent.
That said, Milliman - one of the world's largest actuarial firms - made a close examination of U.S. public pension funding for the first time and said that the multibillion difference was actually good news, Reuters reported.
Rebecca Sielman, the report's author, "said results should reassure the public that America's public pensions in general are accurately reporting their funding shortfalls," the newswire service said.
"The numbers really didn't change that much," she said. "It really didn't move the needle."
She added that the difference between the reporting by public pensions and what her firm discovered was not significant, noting that relatively small changes in the way numbers are calculated could seemingly lead to oversized results because the overall level of funding is so large.
Still, the gap is causing some concern among policymakers who say that at some point, taxpayers will likely be asked to make up the difference. That is a key issue in times of reduced revenues and budget cuts for many public systems.
Pension funds get money from returns on assets and from members' contributions, as well as from cities and states that pay into them, albeit at a discounted rate based on how much money they think their investments will make over time.
The 100 funds examined by Milliman used a median rate of return of 8 percent, Reuters reported, but the recession has cut that dramatically, dropping actual returns to around 3.2 percent over the last five years.
Critics of the way funds report say public pensions should reduce assumed rates of return to 5 percent or less, causing unfunded liabilities to soar, leaving taxpayers on the hook, most likely.
Without the change, future generations will be hit with a financial bomb, Reuters said.
© 2012 Newsroom America.