What rate to use is a hot topic. The Government Accounting Standards Board (GASB) recommends the estimated return on pension assets - about 8 percent. Economists generally argue for a riskless rate - about 5 percent.
Reducing the discount rate would raise the unfunded liability by $1.5 trillion.
While a lower discount rate has a large impact on reported funding status, it does not change what pension benefits public employees, such as teachers and firefighters, ultimately receive.
A realistic measure of the funded status may deter plans from offering overly generous benefits when the stock market soars.