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New paper addresses myths, realities of government retiree health care crisis

While some states are taking adequate steps to address the cost of retiree health-care benefits, others including New Jersey, New York, California and North Carolina are facing tens of billions of dollars in so-called "unfunded liabilities." The myths and realities of this potential crisis are laid out in a new issue brief written by Dr. Robert Clark, a professor of economics and of management, innovation and entrepreneurship at North Carolina State University, and released by the Center for State and Local Government Excellence.

The paper, The Crisis in State and Local Government Retiree Health Benefit Plans: Myths and Realities, examines the current financial status of state retiree health plans from around the country. States with the lowest unfunded liabilities include North Dakota, Wyoming, Iowa and Oregon.

The brief finds that:

  • Although there are widespread reports of a major fiscal crisis, the reality is that some states face a fiscal crisis while others do not.

  • There are substantial differences in the total liabilities of state retiree health plans, depending on the generosity of the plan and the size of the public sector.

  • Retirement benefits are not protected by state laws or constitutions, and public sector employers will continue to amend their plans to reduce costs.


Contact: Matt Shipman
North Carolina State University

Page: 1

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