In an Urban Institute webinar Tuesday, presenters said that while many states and municipalities have taken steps to counteract funding shortfalls in their pension plans, more must be done — and that conventional solutions may not offer enough in the way of retirement security. 

Indeed, many of those solutions, such as cutting benefits or boosting employee contributions, impose penalties on workers that make their benefit questionable, the nonprofit said. 

Risk-sharing is already happening, through benefit cuts and employees paying a larger share. But it's done in a haphazard manner, unequally, which negatively impacts everything from retiree security to the recruitment of new employees, it said. 

Panelist Richard Johnson pointed out in a blog post that, in Pennsylvania, the state made significant cuts to retirement benefits that not only cut the benefit formula, but changed when employees could collect benefits.

Those hired after 2010 with less than 35 years of service won't be able to claim benefits until age 65. The benefit formula for them is only 2 percent, but they still must contribute 6.25 percent of their salaries to the plan. 

"Because of these cuts," Johnson wrote, "relatively few new hires get much out of the pension plan. Employees who begin working for the state today at age 25 must work 32 years before their future pensions are worth more than their required contributions. Those who separate earlier lose money in the mandatory plan. These employees would fare better financially if they could opt out of the plan and invest their contributions elsewhere." 

Among the strategies discussed Tuesday were the possibility of extending Social Security to public employees not already covered, changing benefit formulas or using alternative plan designs.