Oh it's certainly value to the EMPLOYEE to have a guaranteed, generous pension where taxpayers are on the hook if it goes bad, no doubt.  But that doesn't mean it's the RIGHT thing. Government has a responsibility to balance not just their employees, but their taxpayers too.  And like a private business, that means not putting yourself in risky position where your future liabilities can grow out of control relative to your revenues.  

You're only looking at it from the employee's standpoint, and ignoring the potential liability you're sticking on the taxpayer. Pensions are great for the EMPLOYEE'S budgeting, but they're TERRIBLE for the employer's budgeting.  I can't believe you even made that astounding statement that "From a budgeting perspective that is easy [to the employer]". That couldn't be more wrong, because there are huge variables 30-50 years in the future (what fund returns will be, what lifespans will average, etc) that affect that future liability (as we're seeing).