Wall Street's volatility has hit state pension funds just as they were beginning to recover from the recession, turning what was merely a troubled forecast into a potentially stormy future for taxpayers who are on the hook for billions in unfunded liabilities for government retirees.

The AARP and other retiree groups on Wednesday said they will argue before the Michigan Supreme Court that parts of the state's new tax on pensions are unconstitutional, particularly related to public employees.

ING's Retirement division announced today that it has launched the next generation of its retirement health reimbursement arrangement — the ING Health Reserve Account (ING HRA) — to help state and local governments fund their employees' future health care expenses on a tax-favored basis.

A union representing state workers proposed changes to a government pension program on Wednesday that could require some employees to stay in their jobs longer before retiring.