Price Tag For Retiree Benefits: $2.73 Trillion

Report Read time:
Price Tag For Retiree Benefits: $2.73 Trillion

States have set aside about $2 trillion to cover the cost of pensions and health insurance promised teachers, police officers and other public-sector workers, but retiree benefits are still underfunded by about $731 billion, a new study released on December 18, 2007, shows.
 
Of that shortfall, nearly half ($370 billion) is needed for future retirees' health care and other non-pension benefits, such as dental and life insurance, the Pew Center on the States said in “Promises with a Price,” a 50-state analysis of state retiree benefits.

Pew Center on the States is funded by The Pew Charitable Trusts, the same organization that funds Stateline.org. Read the full report and fact sheets for each state.

States have always been required to publicly report their long-term pension liabilities, but starting in 2008, states also have to estimate the price tag of health care and other non-pension benefits. States will have to identify these costs in their fiscal 2008 financial reports under a new rule from the Governmental Accounting Standards Board.

Only Arizona, North Dakota, Ohio, Oregon, Utah and Wisconsin were on track at the end of 2006 to fully fund retiree benefits other than pensions for the next 30 years, Pew said.
 
None of the big states – California, Texas, New York, Florida and Illinois — had put aside enough money for retiree health care and other non-pension benefits as of 2006. New York faces long-term liabilities of $50 billion, followed by California ($48 billion) and Connecticut and New Jersey ($22 billion each), according to the Pew study.
 
States that don't sock away enough money risk getting a lower credit rating from Wall Street, making it much more expensive to borrow money.

Read the full article Price Tag For Retiree Benefits: $2.73 Trillion on Stateline.org's Web site.

America’s Overdose Crisis
America’s Overdose Crisis

America’s Overdose Crisis

Sign up for our five-email course explaining the overdose crisis in America, the state of treatment access, and ways to improve care

Sign up
Quick View
America’s Overdose Crisis

America’s Overdose Crisis

Sign up for our five-email course explaining the overdose crisis in America, the state of treatment access, and ways to improve care

Sign up

MORE FROM PEW

A pair of white and black Adélie penguins standing in the middle of a clump of snow face opposite directions. Seeing Antarctic Change, Scientist Calls for Stronger Action
A shipyard with towers in the foreground, a barge on a river, and a blue sky in the background. Louisiana Primed to Take Helm of Offshore Wind Supply Chain
About a dozen people stand examining large blue bins full of whole fish in a warehouse. Some people are in green clothes, others in blue, and all wear ballcaps. A few hold clipboards. Reducing Risk Strengthens the Seafood Supply Chain
A worker in a seafood market dumps bright orange shrimp from a blue bin onto a bed of ice between a lot of other seafood laid out for sale. Other workers are visible in the background, as are the arms of shoppers placing orders from the other side of the ice bed. Seafood Industry Benefits From Greater Vessel Transparency
Composite image of modern city network communication concept

Learn the Basics of Broadband from Our Limited Series

Sign up for our four-week email course on Broadband Basics
Quick View

How does broadband internet reach our homes, phones, and tablets? What kind of infrastructure connects us all together? What are the major barriers to broadband access for American communities?

Pills illustration
Pills illustration

What Is Antibiotic Resistance—and How Can We Fight It?

Sign up for our four-week email series The Race Against Resistance.
Quick View
Pills illustration

Antibiotic-resistant bacteria, also known as “superbugs,” are a major threat to modern medicine. But how does resistance work, and what can we do to slow the spread? Read personal stories, expert accounts, and more for the answers to those questions in our four-week email series: Slowing Superbugs.