How Big a Burden Are State and Local OPEB Benefits?
The brief’s key findings are:
- State and local OPEB liabilities, largely retiree health, have received growing attention due to rising health costs and a change from cash to accrual accounting.
- This analysis provides a comprehensive look at OPEBs in 2012-2013 at the state, county, city and school district levels.
- The three key insights are:
- aggregate unfunded OPEB liabilities are an estimated $862 billion – nearly two thirds of which is held at the local level;
- these unfunded liabilities are equivalent to 28 percent of the unfunded liabilities of pensions (using the OPEB interest rate for pensions); and
- while OPEB liabilities are large, several factors – such as sponsors’ flexibility to scale back benefits – limit their potential drain on resources.