Surveying California’s Unfunded Retiree Healthcare ObligationsCategories: California Developments,OPEB/GASB 45/75
California Common Sense, by Adam Tatum, April 3, 2014
Nationwide, numerous state and local governments have incurred massive unfunded retirement benefit liabilities, totaling trillions of dollars. These enormous liabilities have ushered in higher annual costs that have led to cuts to public services, and in the extreme cases, municipal bankruptcies. In recent years, retirement benefit plans have come under significant criticism for benefit increases, accounting gimmicks that hid true costs, and missed payments that resulted in the current public retirement benefit crisis.
Ignoring the growing costs associated with lifelong retiree health plans is particularly acute in the state of California. The prevailing apathy towards the state’s unfunded OPEB liabilities is due in part to the lack of understanding of the problem’s financial magnitude. To help fill this void, California Common Sense has conducted a survey of 690 California OPEB liabilities at both the state and local levels.