Part of what causes the problem is the actuarial "methods" used over the years and politicians getting their hands in the pot. Smoothing and rounding and saying 85% funded is great and essentially "fully" funded, etc... In your example above, if the employee was paying 8% into the system and employer 16% as part of the benefit package all could be well. Problem... the state has a budget shortfall somewhere and politicians say "gee, this pension is 91% funded and our actuary says 85% is considered great, so lets take from here by only paying 12% into the system this year." Over and over again it was done during the "fat" years and then during the lean years the politicians blame the unions and big pensions and the citizens buy it. The politicians screwed the public sector employees (who are taxpayers too, btw) and other taxpayers. They should go to jail for stuff like that. NEW/ENTRY public sector employee should now be part of a 401 and/or 457 system. Something like 6% employee and 6% employer contribution. Easy to budget and serves as incentive to employee. High risk employees (public safety) could pay minimum 8% to receive employer contribution of 12%. Those in the system for 5 or more years already, should get what they were promised BUT with new caps such as; not more than 90% of avg best 3 years, AND no ages in the 40's for retirement (50 minimum.)
Many professions have a great deal of stress, so I don't think that's a great excuse not to work. Try being a commission only sales person against a quota day in and day out (sell or not eat), or a business owner. My point is they all have stress. As for physical issues regarding public safety officials, I agree you can't have 65 y/o firefighters handling the hose or climbing the ladder, but I would imagine there are positions that are less physically demanding. Same thing with cops. You don't necessarily need to be in the hood battling gang bangers at 62, but you can certainly be the guy running a radar or working at the mall/local high school. Not to mention I would assume there are support positions in the office that can be worked into your 60's. I agree that public safety positions are different than your average DMV worker, etc, but we have to elongate the years worked in order to have a sustainable economy.
You're right about the stress. I left off the getting shot, stabbed, or general ass whipping as the physical demands and portions relating to stress. But, as to the positions, a cop is a cop is a cop. He or she can do the job or will be medically retired. Even a desk commander must qualify with proficiency with firearms, drive, see, and fight resisting arrestees. So, if I can't get one of those 25% of workforce "safer" positions when I'm 55, will I get my pension then, or work the streets? I'm with you that newbies need to be on a different system and encouraged to save more and no retiring in their 40's. Perhaps mandate work till 55-58 but beyond that, no, for police/fire. And their new system should be generically equivalent to at least 75% of their pay after 30 years of service. If the public sees it much less than that then good luck getting any form of professional service.