Retirement Benefits Unfunded Costs Are $1.14 Trillion: Some States Are Facing A Hundred Billion-Plus Deficit

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California, New York, Texas, Illinois, and New Jersey, face a hundred billion-plus deficit because of unfunded retirement benefits.

Retirement Benefits Unfunded Costs Are $1.14 Trillion: Some States Are Facing A Hundred Billion-Plus Deficit
Retirement Benefits Unfunded Costs Are $1.14 Trillion: Some States Are Facing A Hundred Billion-Plus Deficit (Photo: Washington Examiner)

 

California, New York, Texas, Illinois, and New Jersey are paying for the retirement benefits other than pensions promised to state retirees

These are the top five states with the highest liabilities because of the unfunded retirement benefits:

  1. New Jersey- $174.9 billion
  2. California- $140.2 billion
  3. New York- $133.2 billion
  4. Texas- $120.2 billion
  5. Illinois- $103.1 billion

New Jersey retirement benefits and pensions in state health care plans reached $174.9 billion in 2022. The state was the highest in the country. According to the American Legislative Exchange Council, the nationwide costs of state-sponsored post-retirement benefits reached $1.14 trillion in 2022.

The post-retirement benefits include costs such as retiree health care, life insurance, Medicare Supplement Insurance, and deferred compensation.

Read Also: Social Security Administration: Navigating The Complex Landscape Of Early Retirement Benefits At Age 62

South Dakota and Nebraska didn’t have any unfunded liabilities including funds for retirement benefits

The American Legislative Exchange Council is a free-market nonprofit that promotes reducing the costs of government.

The American Legislative Exchange Council report included model legislation for legislators about how they could pass laws to lower the cost of providing OPEB benefits. One option offered by the report is to have private-sector funding of public-sector retiree benefits.

Read Also: Unlocking The Power Of 401(K) Plans: The Crucial Considerations And Benefits For Retirement Savings

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