For instance, Chicago recently proposed trying to raise billions in debt to help shore up its pension liabilities, ultimately betting that the market would provide returns in excess of what servicing its debt will require. But even in the midst of a bull market over the last decade, investment gains simply haven't been enough to offset pension liabilities. Maine is a great example. Its public pension fund earned double-digit returns in six of the past nine years but it is still $2.9 billion short of what it needs to afford all future benefits, according to the Wall Street Journal.

This leads retirees, like Daniel Tourtelotte, to ask a simple question: "If the market is doing better, where's the money?" 

This is a microcosm of a problem that is occurring across the nation. The main issue is that the amount owed to retirees is accelerating faster than assets on hand to pay those future obligations. Liabilities of major US pensions are up 64% since 2007, while assets are only up 30%.