By Donna Rook, Truth in Accounting, includes “Can anything be in worse condition than unfunded government pensions? Unfortunately, yes – and it’s something few people have heard of. It’s called OPEB (Other Post-Employment Benefits), or government retiree healthcare commitments. The average state has $11.46 billion of unfunded retiree healthcare debt compared to $10.85 billion of pension debt as of fiscal year-end 2012. … Unfortunately state governments do not include all of these compensation costs in the budget as employees earn them. Instead, states typically handle OPEB benefits on a “pay-as-you-go” basis. Because no money is set aside each year to cover these expenses, future taxpayers must cover retirees' healthcare checks when they are written. Current employment costs are paid by future taxpayers who did not receive services from the retired employees.”
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