In particular, assume that Pension Funds liabilities are $100 B with maturity of 12.5Years (we assume for simplicity that all pension will be paid in 12.5 years in one shut—kind-off ZCB). The fund has now $40B in assets (e.g., in cash) . Accountants insist that the   expected annual returns for foreseeable future should be 7% only.
At 8% future returns, the Illinois Teachers Retirement System is overfunded (i.e., has more money than needed to pay all pensions) Approximately, how much overfunding the fund has?
At 7% future returns, the Illinois Teachers Retirement System is underfunded (i.e., has less money than needed to pay all pensions). Approximately, how much underfunding the fund has at 7% future returns?
 Approximately, How much underfunding the fund has at 5% future returns?