State and Local Government : Retiree Benefits

by Government Accountability Office

• ISBN13: 9781604566055
• ISBN10: 1604566051
• Format: Paperback
• Copyright: 2008-07-01
• Publisher: Nova Science Pub Inc

Summary

Over the past half-century, the number of state and local government workers has grown significantly. In 2006, this sector accounted for about 12 percent of the nation's workforce. Since 1996, accounting standards calling for state and local governments to report their liabilities for future pension costs have been in place, but standards calling for similar treatment of the future costs of retiree health benefits have only recently been issued. It is unclear as yet, what actions state and local governments may take once the future costs of these benefits are known. However, future decisions about the appropriate levels of benefits for retirees will likely occur in a broader context of persistent fiscal challenges that state and local governments will face in the next decade. Hence, concerns have been raised about the public sector's capacity to meet the rising cost of providing its retirees with promised pension and other post-employment benefits, such as retiree health care. State and local retiree benefits are not subject, for the most part, to federal laws governing private sector retiree benefits. Nevertheless, there is a federal interest in ensuring that all Americans have a secure retirement, an interest that is reflected in preferential tax treatment for contributions and investment earnings associated with qualified pension plans in both the public and the private sectors. This is an excerpted and indexed edition.

Table of Contents

Preface; Background; State and Local Retiree Benefits Typically Include a Defined Benefit Plan, a Voluntary Savings Plan, and Partially Paid Health Coverage; State and Local Law Generally Provides Legal Protections for Pensions, but Less So for Other Retiree Benefits of Public Employees; Strategies Exist to Manage Future Pension Costs, but Not to Meet Escalating Costs for Retiree Health Care; Concluding Observations; Agency Comments; Appendix I. Organizations, Associations, and State and Local Agencies GAO Contacted; Appendix II. Technical Background on Pension and Retiree Health Care Simulations; Development of Factors for Employment, Retirement, Wages, and Benefits; Projections of Necessary Contributions to Pension Funds for State and Local Government Sector; Projections of Retiree Health Benefit Costs for State and Local Retirees; Appendix III. State and Local Government Retiree Benefit Plans in California, Michigan, and Oregon; Index.