Funding Levels Range Widely for State Retiree Health Care Liabilities

Almost all of the $20.8 billion that states paid in 2015 for non-pension worker retirement benefits— what are known as other post-employment benefits (OPEB)—went to retiree health care. The aggregate figure represented an increase of $1.2 billion, or 6 percent, over 2014.

The total payments for 2015 covered the cost of current-year benefits and in some states included funding to address OPEB liabilities. These liabilities—the cost of benefits, in today’s dollars, to be paid in future years—totaled $692 billion, a 5 percent increase over 2014.  The funded ratios for OPEB costs varied widely, from less than 1 percent in 19 states to 92 percent in Arizona. Only eight states had funded ratios over 30 percent.

This interactive map presents data from a 50-state analysis by The Pew Charitable Trusts of state OPEB assets and liabilities. A brief, “State Retiree Health Care Liabilities: An Update,” discusses the findings in detail. 

Multiple factors could affect reported liabilities in coming years, including modifications to benefits or funding policies, as well as health care inflation or demographic changes that differ from expectations. Policymakers should closely monitor retiree health care liabilities and in many states should consider ways to better manage these costs.