During the same decade, however, benefits paid increased by 130% to $175 billion. Payments from the 100 largest public funds grew by another 9% during the first three quarters of the 2010 fiscal year compared to the first three quarters of 2009, according to the census.

The $11 billion Kansas Public Employees Retirement System had the seventh-lowest funded ratio in Bloomberg's ranking at 63.7% in 2009. It paid out benefits equal to 10% of its assets in the fiscal year, double the rate of 2007, fund records show.

The pension's funded ratio fell from 70.8% two years earlier and is projected to drop to 41% by 2015, according to a February report to state lawmakers. Another market decline could jeopardize the fund, the report said.

Capital Preservation

"Preservation of sufficient cash flow to fund current benefits may become paramount," it said, which could constrain investment strategies and make it harder to achieve assumed returns.

The problem is magnified in states where officials skipped billions of dollars of contributions.

New Jersey Governor Chris Christie, 48, a Republican who took office in January, withheld $3.1 billion of payments in his first budget to cope with a record $10.7 billion deficit. Since 2004, the state has made only $2.7 billion of the $11.9 billion in scheduled contributions, according to bond-sale documents.

New Jersey's $68 billion retirement system had a funded ratio of 66.1% in the Bloomberg data, the 11th-lowest. The state in August settled Securities and Exchange Commission claims that it failed to disclose the extent of its underfunding in documents for $26 billion in bond sales from 2001 to 2007. It didn't admit wrongdoing.

Projected Payments

Benefit payments are projected at 11.4% of available pension assets during this budget year, even after a 14% investment gain in the fiscal period that ended June 30, New Jersey records show.

Payouts by the New Jersey Teachers Pension and Annuity Fund, which serves about 236,000 working and retired educators, grew to $2.8 billion from $1 billion in the 10 years through 2009, an average annual increase of about 10.4%, its yearly reports show. Over the period, holdings returned an annualized 2.3%, according to the state's Division of Investment.