New Mexico has generally done a very good job of managing its long-term pension obligations. Its public employee pension, which is 92% funded, started to show an upturn in 2006 (similar to many state plans that use a fouryear smoothing period to calculate the actuarial value of assets and therefore no longer reflect poor investment returns earlier in the decade). However, the aggregate figures for the state’s pension system don’t reflect that increase because of the larger education fund, which was only about 70% funded at the end of 2005, the most recent state information available. On the non-pensions side, New Mexico’s actuaries have calculated the liability for retiree health care and other benefits at $5 billion. New Mexico may be in better shape than many states on this issue because its state retiree health care authority board maintains a fund equal to seven to nine years of premium payments. This money is not in an irrevocable trust, however—so based on standards set by the Governmental Accounting Standards Board, it may not be considered when calculating the state’s unfunded liability for non-pension benefits.