Pensions are among the most important investments American workers and employers make. We work for years so that when the time comes, we can retire with enough income to live comfortably, enjoy the much-deserved leisure time, and engage in activities of our own choosing.

This week's cover story examines Iowa's and Illinois' pensions, which, when coupled with health-care benefits, are in grave danger of insolvency, threatening to potentially bankrupt Illinois. This is due to the unsustainable "defined-benefit" pension plan that promises each employee a percentage of his or her annual income, regardless of the amount of contributions made by the employee, or on the employee's behalf by the employer (the state's taxpayers), over his/her years of service.

[Note: Commentary from the Reader's editor, published on this topic, can be found here.]

A riddle: What do you get if you add $209 billion to $54 billion to $15 billion?

If you answered "a lot," you're correct and not particularly inclined toward math.

If you answered $278 billion, you're adept at arithmetic and correct, if literal-minded.

If you answered the respective unfunded liabilities for Illinois' state-run pension funds, its retiree health-care system, and its pension bonds, you're correct and probably cheating.

And if you answered "a time bomb," you're probably most correct. Because while the numbers are important, they're constantly changing and open to interpretation, and the most important aspect of them is their magnitude. Whether it's cast as an $83-billion pension problem or a $278-billion benefits issue, the sheer size of it shows that it can't be solved with tinkering.

State public-employee pension systems are grossly underfunded in general and are financial time bombs for most states. According to the 2010 paper "Are State Public Pensions Sustainable?", 31 state pension systems will run out of money by 2030 at current benefit and funding levels. (Illinois topped the list, going broke in 2018; Iowa is in better shape than most states, with an estimated expiration date of 2035.)

What's happening in cities across Iowa with police and firefighter pensions, though, shows the flip side - the short-term budget pain that accompanies a well-funded system when investments perform poorly.

In Davenport, the cost of police and firefighter pensions will increase from roughly $3.3 million in Fiscal Year 2010 to $5.5 million next fiscal year and an estimated $6.6 million in Fiscal Year 2014, according to city Budget Director Alan Guard. Over the four-year period ending in 2014, Guard said, the cumulative additional cost is $7.75 million.

In Bettendorf, the cost of police and fire pensions increased from roughly $747,000 in Fiscal Year 2010 to $1.22 million next fiscal year and an expected $1.36 million in Fiscal Year 2014, according to City Administrator Decker Ploehn. Over the four-year period ending in 2014, the cumulative additional cost is $1.62 million.