Magazine article Government Finance Review

Strategies for Funding Postemployment Benefits

Magazine article Government Finance Review

Strategies for Funding Postemployment Benefits

Article excerpt

[from the editor]

As the Governmental Accounting Standards Board's Statement No. 45 kicks in for public employers of all sizes (from the fiscal year ending December 31, 2007, for the largest governments to the fiscal year ending December 31, 2009, for the smallest), more attention than ever before is being focused on funding of employee benefits. With a few major exceptions, pension funding is in fairly good shape - according to a recent study from the Pew Charitable Trusts, pension funds had funded about 85 percent of their long-term pension costs as of fiscal year 2006 (see News & Numbers on page 4 for more on this report). But, according to the same study, states have set aside only 3 percent of their promised retiree health-care and OPEB liabilities.

The articles in this issue of Government Finance Review contain strategies, case studies, and advice to help in choosing the right approach and ensuring success.

In OPEB in Perspective: GASB Statement No. 45 Four Years Later, Stephen J. Gauthier, director of the Government Finance Officers Association's Technical Services Center, points out that, despite a certain amount of initial confusion, the real challenge is not so much in the accounting as in dealing with OPEB budgetary implications - to ensure that whatever benefits a government decides to provide are financially sustainable.

In Taming the Tiger: OPEB Cost Containment, Colleen McHugh lays out steps for implementing a comprehensive care management and wellness strategy that will help contain health-care costs by improving overall employee health. …

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