Part of the problem has been low returns on investments. Ironically, the Trump stock boom will prop up some localities only to lead to more promises and higher pensions and holding off on bankruptcies for 20 years.
You have raised a good point. The article talked about the investment losses during the 2008-2012 recession. I would think those losses have been recouped and then some. Investment portfolios should be in good shape.
That's the least part of the problem. Main problem are the unions, demanding big benefits. And the management in cities and counties giving in to the unions, passing the problem to future taxpayers by promising huge returns of 7 to 8 percent a year on investments, when they know it's closer to 1 to 2 percent. At least that's what they tell the taxpayers, don't worry, we'll get 8 percent returns on pension fund investments. But the fine print is that the tax payers are on the hook if the investment returns don't pan out. The low returns are not the problem. The problem is the unions and government management are screwing the taxpayers.