fbpx The Other Debt Bomb in Public-Employee Benefits | Harvard Kennedy School

Additional Authors:

  • Robert Pozen

Excerpt

The Other Debt Bomb in Public-Employee Benefits, Robert C. Pozen, January 16, 2015, Opinion, Public-pension funds have garnered attention in recent years for being underfunded, but a more precarious situation has received much less notice: health-care obligations for public retirees. Unlike pension plans, governments are not required to contribute to separate trusts to support health-care promises. As a result, only 11 states have funded more than 10% of retiree health-care liabilities, according to a November 2013 report from the credit-rating agency Standard & Poor's. For example, New Jersey has almost no assets backing one of the largest retiree health-care liabilities of any state -- $63.8 billion. Link