Higher education appropriations are often referred to as the "balance wheel" for state budgets, receiving greater than average funding reductions during economic downturns and above average increases during periods of economic growth. However, this trend has gradually diminished with each recession as higher education funding no longer returns to pre-recession levels. The State Higher Education Executive Officers Association's (SHEEO) annual State Higher Education Finance (SHEF) report documents this ratcheting down. The purpose of this policy brief is to provide background information to help SHEEOs better understand the current status of state pension obligations. The authors first review how most public pensions have become underfunded. Next, they review the common reforms states have taken to address the financial health of their retirement systems. Finally, the authors highlight several complicating factors that may limit the effectiveness of the reforms or lead to future funding challenges.