these failing pensions are largely due to mismanagement, properly managed these retirement vehicles work as intended. unfortunately in the current climate a large company or even a state government can't resist the temptation to use a massive pension fund for something other than it's intended purpose. One lean quarter and they start eyeing up the 7 billion sitting in the pension fund. I read a book a couple years back that changed my thinking on pensions, before I was of the mind that they never worked, were a massive Ponzi scheme, stealing from young workers, etc... no, pensions work provided they are left alone.
http://www.retirementheist.com/