States are facing a growing gap when it comes to funding the retiree healthcare benefits of their public employees, according to a new report by the Pew Charitable Trusts.
According to the report, states will be required to fund retiree benefits to the tune of $600 billion, but have set aside a mere $31 billion. The situation has deteriorated since 2008, when the states had $32 billion in reserves and $587 billion in liabilities. In 2009, states put away only slightly more than a third of the $47 billion required to keep up.
"In many states, the bill for public sector retirement benefits already threatens strained budgets, and is competing for resources with other critical needs, including education, infrastructure and healthcare," said Susan Urahn, managing director of the Pew Center on the States. However, she added that there is "considerable momentum for change."