Press Release

Unfunded Health Care Benefits for Retired Public Employees Leave States and Taxpayers at Risk

Contact: Dan Reynolds, ALEC Public Affairs
Phone: 571-782-5038

Unfunded Health Care Benefits for Retired Public Employees Leave States and Taxpayers at Risk

New Report Reveals a Growing Problem for State Finances

ARLINGTON, VA – (January 23, 2020) Today, the American Legislative Exchange Council (ALEC) released Other Post-Employment Benefit Liabilities, 2019: The Continuing Need for OPEB Reform. This report is the newest publication in an annual series from the ALEC Center for State Fiscal Reform.

Beyond public pensions, state governments offer retired public employees other post-employment benefits (OPEB). These benefits typically include health insurance, life insurance, Medicare Supplemental Insurance and more.

Most states do not adequately fund OPEB plans, and, unlike pensions, many do not pre-fund OPEB at all. Currently, total state unfunded OPEB liabilities exceed $1 trillion. The report found the following states have the highest total unfunded OPEB liabilities in the country:

  • California: over $166 Billion in unfunded liabilities
  • New Jersey: over $130 Billion in unfunded liabilities
  • New York: over $129 Billion in unfunded liabilities

The states with the lowest unfunded liabilities include the following:

  • Nebraska: $0 in unfunded liabilities
  • South Dakota: $0 in unfunded liabilities
  • Kansas: nearly $285,000 in unfunded liabilities

Follow this link to read the report.

“This report reveals the magnitude of unfunded OPEB liabilities across the states,” said ALEC Chief Economist and Vice President, Jonathan Williams. “Absent policy reforms, like successful measures recently implemented in North Carolina, unfunded OPEB liabilities could cause future tax increases or cuts to core public services in many states.”

“This report highlights, once again, that conservative solutions work for North Carolina and every other state,” said Rep. Jason Saine (Appropriations Committee Chairman). “North Carolina has a duty to fulfill the promises we have made to State employees and retirees, and underfunded liabilities put those promises at risk. I am proud of the work that the legislature, along with Treasurer Folwell, have done to reduce unfunded liabilities and ensure the security of state retirees for the future.”

The ALEC Center for State Fiscal Reform strives to educate decisionmakers and the general public on the principles of sound fiscal policy and the evidence that supports those principles. This is done by personalized research, policy briefings in the states and by releasing nonpartisan policy publications for distribution.

The American Legislative Exchange Council is the largest nonpartisan, voluntary membership organization of state legislators in the United States. The Council is governed by state legislators who comprise the Board of Directors and is advised by the Private Enterprise Advisory Council, a group of private, foundation and think tank members. For more information about the American Legislative Exchange Council, please visit:

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