How big a burden are state and local OPEB benefits?

Abstract

The brief's key findings are: (1) 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. (3) This analysis provides a comprehensive look at OPEBs in 2012-2013 at the state, county, city and school district levels. (3) The three key insights are: (a) aggregate unfunded OPEB liabilities are an estimated $862 billion – nearly two thirds of which is held at the local level; (b) these unfunded liabilities are equivalent to 28 percent of the unfunded liabilities of pensions (using the OPEB interest rate for pensions); and (c) while OPEB liabilities are large, several factors – such as sponsors' flexibility to scale back benefits - limit their potential drain on resources.