Arizona is a national leader for responsible funding of both its pension plans and its future retiree health costs. It is one of just six states on track to fully fund the bill coming due for its non-pension obligations. It has a jump on other states because it has made a practice of setting aside money for future retiree health costs as part of its pension system. (Most states have been paying the costs for current retirees, but only 13 have also set aside money for the future.) In addition, the state’s retiree health benefits are modest. Arizona is one of a few states that contributes a set and defined amount to a retiree’s health benefits, which limits its vulnerability to increases in medical costs.