Retired broadcast "Goes Nowhere"

Copyright 2009 Gannett Company, Inc.All Rights Reserved USA TODAY

16 February 2009 Monday FINAL EDITION

SECTION: NEWS; Pg 3A

LENGTH: 770 words


TITLE: Retired question "leads nowhere", the difference Neb., other States have an obligation $ 445B

Signature: Dennis Cauchon



Government of the State of Nebraska is unique. Its legislature has one chamber - the Senate - and senators do not use party labels.

The state now has another distinction: it is the only state that does not subsidize medical care for retired government employees.

"We bring the issue of medical care for retirees, and it goes nowhere," said Mike Marvin, executive director of the Nebraska Association of Public Employees, a union. "Heck, we can not even get decent wages ".

Nebraska is the only state in the country that does nothing for the medical care of retired government workers. The 49 other states have an unfunded obligation of $ 445 billion, according to a USA TODAY poll.

New accounting rules require that states and local governments how they should report for medical benefits promised to employees upon retirement. This new requirement is already the third leg of a stool - along the debt and pension liability - that accountants use to calculate the financial health of a government.

Some state governments to take financial responsibility for medical insurance for retired teachers and local police officers. Elsewhere, school districts and cities pay the bill. Thus, the same $ 25 billion liability may fall to a state legislature or be sprinkled around hundreds of cities, school districts, water and other organizations.

The United States has 89,437 branches of local government, according to the Census Bureau. A USA TODAY survey of 25 medium to large governments found a retiree medical obligation of $ 126 billion.

Other similar places vary

* Big - New York City has an obligation of $ 60 billion more than its 43 billion in debt.

* Small - Los Angeles is a tab of $ 544 million.

* Big - The University of Texas and Texas A & M systems have a duty of $ 7 billion.

* Small - The University of Colorado and Colorado State have a $ 274 million tab.

A few state and local governments have begun to put money aside to prepare to pay the medical expenses of retirees. Others were cautious because of the burden and legal issues. The value of these benefits varies greatly between governments. Some pay almost all costs. Others contribute a fixed amount such as $ 200 per month or 50% of the health insurance premium.

Even seemingly modest benefits may be costly, because the police officers, teachers and other staff often several years before retiring with a sick 65.

"People will ask," Why is it that this place has more in taxes? "Or" Why is this place high price of water? " "Says Kenneth Rust, chairman of the Government Finance Officers Association. The reason is medical expenses of retirees, he said.

Florida requires local governments to ensure that retirees buy the medical insurance provided to current workers. This can cost governments more than $ 5,000 per year and retirees, even if the retirees pay 100% of the premium, because retired people use more medical care, rising costs.

Becky Sielman Actuary Milliman Inc., a benefits consultant, says the requirement between the governments of its 35 company works with the New England range from $ 3,000 to $ 95,000 per worker per pensioner. Reflects the need for money today to cancel and make money as a pension fund, produce sufficient income to cover medical care for workers after retirement.

A few governments have resisted the number of reports. "There is no legal requirement in Texas to pay these health benefits. For this reason, it is misleading to report them as a responsibility," says Suzy Whittenton, director of the state of financial management.

University of Texas accounting professor Michael Granof disagreement. "The responsibility is, if you report it or not. The new surgeon general, can not be solved by the disease in America recalibrate the thermometer," he said.

Although Texas does not report the number in its financial report, he calculated the total obligations, including universities: $ 48.7 billion, second highest among states.

However, no responsibility Nebraska reports. "Nebraska is fiscally conservative, pay-as-you-go state, and is the main reason why we do not have this advantage," said state Sen. Dave Pankonin, president of the Legislative Assembly of the Committee on arrangements retirement.

"Private sector employees rarely have this advantage," says Pankonin, a retailer of farm equipment. "The era of early retirement before the age of Social Security and Medicare has become unrealistic."

Nebraska avoiding any long-term financial obligations, not only for retirement benefits. The State has no debt. The Constitution forbids.

One thing Nebraska does have: A balance $ 3.5 billion and a budget of $ 563 million cash reserve.

* Health Benefit expensive, 1A

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