Spotlight: Retiree Health Care Benefits for State and Local Employees in 2014

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Other postemployment benefits (OPEB) offerings and liabilities greatly range among state and local governments. In addition to examining the finances of the health care benefit plans of retired general state employees which were covered in a 2013 brief, this update includes plan data for retired teachers, public safety officers, university employees, and legislators, among others as of fiscal year 2013.

The brief discusses how different plan designs, coverage levels, and financing arrangements are associated with varying costs for sponsoring state governments. Among the findings:

  • States’ unfunded OPEB liabilities (UAAL) remained relatively unchanged when compared to FY11-12 data;
  • Over three-fourths of the total state OPEB UAAL is held by 10 states;
  • 33 states set aside assets to prefund OPEB in FY13, up from 18 for the period FY09-FY11.

As state and local governments seek to reduce their liabilities, many public employers continue to accumulate assets to prefund future retiree health benefits and to reduce OPEB through program and policy changes.