In the early 1990s, a number of state pension funds were seriously underfunded -- with the average fund containing only 80 percent of the amount needed to pay their obligations. Since then, some states have moved to replace their traditional defined benefit plans with defined contribution plans.

Under defined benefit plans the state owns and invest funds and pays people based on a formula. But defined contribution plans allow workers to direct their own 401(k)-style plans.

• So far ten states have set up defined-contribution plans or added components of them for state workers.

• In addition, six states have defined-contribution bills pending and 12 more are studying the idea.

Experts say that West Virginia and Michigan have the best plans.

• Since West Virginia set up its plan in 1991, more than 14,000 public school employees have joined -- each contributing 4.5 percent of their pay with the state adding an amount equal to 7.5 percent of the worler's income.

• Workers may chose to invest in any or all of five approved funds ranging from money market to growth and income funds.

• Michigan allows all non-public school workers to direct their investments in voluntary 401(k)-style plans, with their personal contributions vesting immediately.

• The employees share of the state contributions is 100 percent at the end of four years.

Experts say that Washington lawmakers should closely examine what states are pioneering in the realm of pension privatization.