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The Next Taxpayer Bailout?

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Today's New York Times has a troubling article entitled "Public Pension Funds Are Adding Risk to Raise Returns."  After achieving growth rates of only 3 to 4 percent in recent years, public employee pension plans are taking on more and more risk to try and achieve their assumed rates of return -- generally 8 percent growth per year.  More risk is preferred to lowering the expected rate of return, acccording to  Trent May, chief investment officer of Wyoming's state pension fund: "Nobody wants to adjust the rate, because liabilities would explode."  

The article highlights what's happened in Colorado:

Colorado cannot afford the contributions it owes, even at the current estimated rate of return. It has fallen behind by several billion dollars on its yearly contributions, and after a bruising battle the legislature recently passed a bill reducing retirees' cost-of-living adjustment, to 2 percent, from 3.5 percent. Public employees' unions are threatening to sue to have the law repealed.

Riskier and Riskier investments?  Does this sound familiar to anyone?  After bailing out Wall Street and the auto industry, are taxpayers now looking at bailing out government retirees?