Pew Study Finds States Face $2.73 Trillion Bill for Retire...(the whole story because they do not take...),Health

-- Eleven states face long-term liabilities in excess of $10 billion. These include New York at $50 billion, California at $48 billion, and Connecticut and New Jersey at nearly $22 billion each.

Promising Approaches

Promises with a Price finds that while there are no quick and easy solutions, states can take steps to reduce their liabilities. For example, West Virginia reduced its long-term bill coming due for its non-pension benefits by more than half, from an estimated $7.8 billion to $3.4 billion, after setting up a trust fund for payments and adopting several other reforms.

"States have the means to control their destinies. They just have to have the political will to do so," said Katherine Barrett, co-author of the report. "For a state to succeed, it must use reliable data and good planning, carefully analyze whether proposed new benefits are affordable, and, above all, do its best to make full payments each and every year to reduce the long-term cost."

A range of promising approaches are in play across the country. An increasing number of states are both setting aside money and restructuring benefits to reduce costs:

-- At least five states -- including Ohio, Washington and Oregon -- offer hybrid pension plans that combine elements of both defined benefit and defined contribution plans.

-- Some states are raising the retirement age and closing loopholes within pension systems that allow employees to inflate the amount they collect after retirement.

-- For non-pension benefits, states are increasing premiums and co-pays and raising the number of years of employment required for lifetime or fully subsidized benefits, among other reforms.

-- At least 13 states have set up irrevocable trusts to pay for retiree health care in years to come.

About the Methodology