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The funding status of retiree health plans in the public sector

Published online by Cambridge University Press:  12 April 2011

ROBERT L. CLARK  and
MELINDA SANDLER MORRILL
ROBERT L. CLARK
Affiliation:
College of Management, North Carolina State University (e-mail: [email protected])
MELINDA SANDLER MORRILL
Affiliation:
College of Management, North Carolina State University (e-mail: [email protected])
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Abstract

While no longer common in the private sector, most public sector employers offer retiree health insurance (RHI) as a retirement benefit to their employees. While these plans are thought to be an important tool for employers to attract, retain, motivate, and ultimately retire workers, they represent a large and growing cost. This paper reviews what is currently known about RHI in the public sector, while highlighting many important unanswered questions. The analysis is informed by data produced in accordance with the 2004 Government Accounting Standards Board Rule 45 (GASB 45). We consider the extent of the unfunded liabilities states face and explore what factors may explain the variation in liabilities across states. The importance and sustainability of RHI plans in the public sector ultimately depend on how workers view and value this post-retirement benefit, yet little is known about how RHI directly impacts the public sector labor market. We conclude with a discussion of the future of RHI plans in the public sector.

Keywords

H72H75J32J45Retiree health insurancepublic employeesother post employment benefitsstate budgets and medical costs
Type
Articles
Information
Journal of Pension Economics & Finance , Volume 10 , Issue 2 , April 2011 , pp. 291 - 314
Copyright
Copyright © Cambridge University Press 2011

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