Two reports released in the past week suggest alarming problems with underfunded public pension plans that are causing some state and local governments to choose between cutting services and raising taxes.

The problems – identified in reports by the Pew Center on the States and the Census Bureau – are mostly temporary ones caused by stock-price drops during the Great Recession, according to supporters of the public employee pension system.

But they acknowledge a few states such as Illinois and New Jersey have badly managed plans that are in serious trouble.

Some Republican members of Congress want to impose new uniform disclosure standards on all public employee pension plans.

Pension experts say a bill proposed by Republican Rep. Devin Nunes of California would significantly increase the cost of operating such plans, requiring them to lower projections of future returns to match the rate of returns on Treasury bonds.

Many state and local governments would respond by switching to defined contribution plans – similar to 401k plans – whose costs are more predictable and controllable, critics of Nunes’ bill say.

That would impact New York’s eight public employee pension plans, which cover 1.38 million retirees and workers, including police officers, firefighters and teachers. Five of those plans cover workers in New York City, while the remaining three cover those working elsewhere in the state.

New York’s plans aren’t underfunded, but the cost of keeping them healthy has increased significantly.

On Thursday, the House Ways and Means Subcommittee on Oversight will hold a hearing based on concerns Illinois will seek a federal guarantee of the debt it needs to maintain its pension funds.

The subcommittee’s chairman, GOP Rep. Charles Boustany of Louisiana said in a statement the hearing will “consider possible approaches to ensure that no such federal bailout is ever needed.”

The Pew Center report released Tuesday found public employee pension funds in 31 states were less than 80 percent funded as of June 30, 2009…..

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