States’ fiscal health depends greatly on their ability to wisely manage the bills coming due. Today, states’ retiree pensions and other benefits represent a bill of at least $2.73 trillion over the next several decades. Added together, states have saved enough to cover about 85% of their long-term pensions costs—but only about 3% for retiree health care and other non-pension benefits. All told, states have set aside about $2 trillion to pay for promises to their retired employees, but still need to come up with an additional $731 billion to cover their long-term obligations. To meet this challenge, a growing number of states are setting aside money, restructuring benefits and strengthening the governance and oversight of their retirement benefit systems.