It's going to be as least as big as the unfunded corporate pensions (I know, I'm one whose pension is a bit less than a third of what it was supposed to be thanks to my former company declaring bankruptcy and abrogating its pension obligation) and maybe worse. I do not know of the PBGC (Pension Benefit Guarantee Corporation) will take over municipal and state pensions as it has corporate pensions. And even if it does, bear in mind that the pensions thus taken over will be half or a third of what they were promised.

Here's the truly sad part. People who worked for companies/municipalities/states/school systems die what was expected of them: worked all those years. Sometimes they gave up salary for the promise of a good pension down the road. It's hard to fault them for not saving a whole bunch of money along the way, because there was no reason to think the pension would disappear. But it has.

I'm lucky because I never thought my pension would amount to more than a hundred bucks a month. I'm actually collecting $172/month. It should be a bit over $600. But because I always thought it would be a trivial sum of money, I compensated with savings. Lucky me. I know more than one former co-worker who worked 30 or more years for that company (I worked ten and a half years there) who understandably thought they'd retire with a good pension. And in some cases they did, then WHAM! The company declared bankruptcy, shifted the pension burden to the PBGC, and now they're getting a third of what they'd been getting. Meanwhile, all the executives get golden parachutes and retire with millions.

I have no specific opinion on the case referenced in the OP, but I've been saying for nearly a decade now that public employees need to understand their pensions are not as guaranteed as they thought they were.

Pretty soon we'll be back to a country that looks a lot like the 1930s, except that back then people assumed that parents would spend their declining years with children. That notion disappeared a very long time ago, and today's seniors have long assumed they'd spend their declining years independently. Guess what? That may not be the case.