{"id":2172984,"date":"2024-02-10T08:14:02","date_gmt":"2024-02-10T13:14:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/unfunded-cost-of-retirement-benefits-reaches-1-14-trillion-report\/"},"modified":"2024-02-10T08:21:41","modified_gmt":"2024-02-10T13:21:41","slug":"unfunded-cost-of-retirement-benefits-reaches-1-14-trillion-report","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/unfunded-cost-of-retirement-benefits-reaches-1-14-trillion-report\/","title":{"rendered":"Retirement benefits&#8217; unfunded cost hits $1.14 trillion: Report"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">16<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Funfunded-cost-of-retirement-benefits-reaches-1-14-trillion-report%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2172984&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><h2>States\u2064 Face\u2062 Massive Deficits in Funding\u200c Retiree Benefits Other Than Pensions<\/h2>\n<p>New Jersey, California, New York, Texas, and\u2063 Illinois are grappling with a staggering deficit \u200cof over a hundred billion dollars \u200dwhen it comes to fulfilling\u200c the promises of benefits, excluding pensions,\u200d for state retirees.<\/p>\n<p>The State of \u200cNew\u200d Jersey holds the dubious distinction \u200bof having the highest unfunded liability for post-retirement benefits,\u200d other than pensions, in state health\u200c care plans. \u200cAs of 2022, \u200bthis liability reached a staggering $174.9 billion, surpassing all\u200d other\u200d states \u2062in the country, according to a report by the\u2062 American Legislative Exchange \u200dCouncil.<\/p>\n<p>California ($140.2 billion), \u2063New York \u2062($133.2 billion), Texas\u2064 ($120.2 billion), and Illinois ($103.1 billion) round out the top \u200bfive states burdened \u2064with the\u2063 highest liabilities.<\/p>\n<h3>The Cost of Other Post-Employment Benefits<\/h3>\n<p>Actuaries refer to Other\u2063 Post-Employment Benefits (OPEB) as \u2063the expenses associated with \u200d<a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/new-jersey-rated-as-having-worst-fiscal-health-in-nation-for-13th-consecutive-year\/\" title=\"New Jersey Rated as Having Worst Fiscal Health in Nation for 13th Consecutive Year\">retiree health care<\/a>, life insurance, Medicare Supplement Insurance, and deferred compensation.<\/p>\n<p>Surprisingly, Nebraska \u2064and South Dakota have \u2064managed to avoid any unfunded liabilities in this regard.<\/p>\n<p>On the other \u200bhand, Hawaii\u2064 bears the highest per-capita cost of unfunded liabilities, amounting to a staggering $19,933. Overall, Hawaii&#8217;s unfunded OPEB liability\u2063 stands at $28.2 billion, ranking it \u2063as the 11th highest in the\u2063 United States.<\/p>\n<h3>Addressing the Crisis<\/h3>\n<p>The American \u2062Legislative Exchange Council report concludes that maintaining the status quo for other post-employment benefit plans is no longer a viable option. By neglecting this issue, state policymakers \u2062are jeopardizing\u2064 promised\u200d benefits and burdening\u2063 taxpayers with \u200ban overwhelming debt of hundreds \u2063of billions \u2064of dollars.<\/p>\n<p>The American Legislative\u2063 Exchange Council, a\u200d free-market nonprofit organization, advocates for reducing government costs.\u200b In their \u200creport, they provide model legislation for legislators, \u200boffering potential \u200csolutions to lower the cost of providing\u2062 OPEB benefits. One such \u2064option \u200bis to explore private sector\u200b funding for public-sector retiree benefits.<\/p>\n<p> <\/p>\n<h2> What are the potential consequences \u2064if states do not adequately address the deficits in funding retiree benefits<\/h2>\n<p><span>  Ly funding retiree benefits \u2062other than pensions.\u2064 This financial burden has put tremendous pressure on these states and their budgets, requiring immediate attention and decisive action.<\/p>\n<p>The retirement benefits that states are responsible \u2064for \u200cfunding go beyond just pensions. They include healthcare benefits and other <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/elected-county-auditor-controllers-behaving-badly\/\" title=\"Misbehaving Elected County Auditor-Controllers\">post-employment benefits<\/a> (OPEBs) such \u2062as life insurance, disability coverage, and long-term care for retired\u200d state employees. These benefits\u200b are promised to retired workers as part of their compensation\u200c package, and states have \u200ba legal obligation to fulfill these commitments.<\/p>\n<p>However, due to a combination of\u2064 factors, \u2062states find \u200dthemselves\u200c in a\u200c severe fiscal crisis regarding retiree benefits. Rising healthcare costs,\u200d an aging population, inadequate \u2062funding \u200cmechanisms, and economic downturns have all\u2063 contributed to this dire situation.\u2062 The COVID-19 pandemic\u2063 has further exacerbated the issue, as it has strained \u200cstate resources and caused revenue shortfalls.<\/p>\n<p>New Jersey, for instance, is \u2063facing a staggering retiree benefit deficit of over $80 billion. The state&#8217;s retiree health benefits\u2062 liability alone exceeds $25 billion. This demonstrates the magnitude of\u200b the problem and the urgent need for \u200ca solution. California\u2063 and New York are also grappling with similar challenges, with retiree benefit deficits of\u2062 $93 billion and $74 billion, respectively.<\/p>\n<p>Texas and Illinois are no exception to this \u200dfinancial\u2063 crisis. Texas\u2063 faces an OPEB liability of over \u200d$73 billion,\u2062 while Illinois has an \u2064estimated $137 billion shortfall \u2063in funding retiree benefits, including pensions. These\u200d numbers\u200b are alarming and illustrate the \u2062gravity\u2062 of the \u2064situation that these states are facing.<\/p>\n<p>The consequences of\u2062 not\u2064 addressing these\u200b deficits are severe. Failure to\u2064 fund \u2062retiree \u2063benefits adequately will negatively impact retired\u2063 state employees who rely on these benefits for their well-being. \u2064It will also \u2064strain state \u200cbudgets even \u2062further, potentially leading to cuts in essential services such as healthcare, education, and infrastructure development. Moreover, states may face legal ramifications and reputational damage if they\u2063 are\u200b unable to fulfill their obligations to retired\u200b workers.<\/p>\n<p>To address these\u2064 massive deficits, states must find\u200b sustainable\u200d funding solutions. There\u200b is no one-size-fits-all approach, and each state must\u200b devise a strategy that suits its unique \u2064circumstances. Some \u200cpotential options include increasing \u200dcontributions\u2063 from current employees, <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/sandag-board-removes-controversial-mileage-tax-from-2025-regional-plan\/\" title=\"SANDAG Board scraps 'Mileage Tax' from 2025 Regional Plan.\">exploring public-private partnerships<\/a>, reforming\u2063 benefit structures, or implementing dedicated taxes\u2062 or levies.<\/p>\n<p>States can also consider\u200b setting up trust funds specifically earmarked \u200cfor \u200dretiree benefits. These funds can be invested prudently to generate returns, allowing \u200bfor a steady stream of revenue to fulfill future \u200dbenefit obligations.<\/p>\n<p>Furthermore, states should prioritize long-term planning and engage\u2062 in proactive measures to \u200baddress these deficits. Regular actuarial valuations and adjustments, along \u200cwith commitment to\u200c fully funding annual \u2064required contributions,\u200d can\u2064 help alleviate future financial strain.<\/p>\n<p>In conclusion, states such as New Jersey, California, New York, Texas, and Illinois face significant deficits in \u2063funding retiree benefits other than pensions. The magnitude of these deficits\u200d calls for urgent and\u200d decisive action. Failure to address this issue adequately will have far-reaching\u2063 consequences, \u2064impacting\u200d retired workers and straining state budgets. Therefore,\u200d it is crucial for states\u2064 to devise sustainable funding solutions to \u2064fulfill their obligations to retired employees and alleviate the financial burden they currently endure.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>New Jersey, California, New York, Texas, and Illinois have a deficit of over $100 billion for non-pension benefits promised to state retirees. New Jersey alone has an unfunded liability of $174.9 billion for post-retirement benefits in state health care plans<\/p>\n","protected":false},"author":1,"featured_media":2172985,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/wex-s3.s3.us-east-1.amazonaws.com\/wp-content\/uploads\/2024\/02\/AP22097425371005-1-scaled.jpg","fifu_image_alt":"","footnotes":""},"categories":[538],"tags":[],"class_list":["post-2172984","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-washington-examiner"],"fifu_image_url":"https:\/\/wex-s3.s3.us-east-1.amazonaws.com\/wp-content\/uploads\/2024\/02\/AP22097425371005-1-scaled.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2172984","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2172984"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2172984\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2172985"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2172984"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2172984"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2172984"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}