The credit-rating agency Moody's says state, local, and federal governments are about $7 trillion short in funding coming pension payments.

"The unfunded liabilities of the various federal employee pensions systems, covering civilian and military employee benefits, amount to about $3.5 trillion, or 20% of US GDP," a release from Moody's said Wednesday.

"Additionally, Moody's estimates that unfunded state and local government pension plan liabilities are of the same magnitude, bringing the total shortfall to 40% of GDP."

Moody's also said the public pensions were only one piece of the growing retirement problem in the US.

"The bigger challenge to the US comes from the unfunded liabilities for the Social Security and Medicare programs," the report said. "The Social Security funding gap is estimated at $13.4 trillion, or 75% of GDP, while the shortfall from the Hospital Insurance component of the Medicare program amounts $3.2 trillion, or 18% of GDP."