The Funding Status of Retiree Health Plans in the Public Sector

Robert Clark and Melinda Morrill

No 16450, NBER Working Papers from National Bureau of Economic Research, Inc

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 research questions. The analysis is informed by detailed data from states on their liabilities associated with RHI, which were 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 depends 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.

JEL-codes: H72 J26 J45 (search for similar items in EconPapers)
Date: 2010-10
Note: EH PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Published as Clark, Robert L. and Melinda Sandler Morrill. "The Funding Status of Retiree Health Plans in the Public Sector." Journal of Pension Economics and Finance 10, 2 (2011): 291-314.
Published as The Funding Status of Retiree Health Plans in the Public Sector , Robert L. Clark, Melinda Sandler Morrill. in The Economics of State and Local Pensions , Brown and Clark. 2011

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Journal Article: The funding status of retiree health plans in the public sector (2011)
Chapter: The Funding Status of Retiree Health Plans in the Public Sector (2010)
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