ElderBranch Explains New York’s Pending Financial Crisis: Unfunded Benefits Promised to Public Sector Retirees

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Changes in disclosure and accounting requirements have uncovered large financial liabilities on the balance sheets of New York State and its various local governments and public authorities. ElderBranch highlights the key issues and consequences of this $250 billion burden in a new report.

In its new report, “New York’s Pending Crisis: Unfunded Benefits Promised to Public Sector Retirees”, ElderBranch takes a look at the key issues surrounding New York’s large financial liability detailed in The Empire Center of New York Policy’s study “Iceberg Ahead”, published earlier this fall.

New York State and its various local governments and public institutions together share an unfunded retiree benefits liability of $250 billion. These are health care benefits promised to former public sector workers.

To put New York’s liability in context, it is estimated that the nationwide unfunded liability is $1-$1.5 trillion. This means that New Yorkers own a staggering 17-25% of the entire country’s unfunded liability, though they only constitute 6% of the American population.

One of the main contributors to the growing liability is the increased burden that employers have taken on over the years. In one of the largest public employer health insurance programs, employers now cover 75-90% of the cost of the insurance premiums.

Syracuse, Buffalo and New York City taxpayers face the largest unfunded liabilities on a per household basis, at $32,168, $29,489 and $26,979, respectively. This liability has reached such a level that in fiscal 2011, the cities of Buffalo and Syracuse spent more on health care for retirees than for active employees.

While the current situation must be rectified, the possible solutions are extremely controversial.

Read more in ElderBranch’s report here.

About ElderBranch
ElderBranch is an online information portal that helps people find and evaluate long-term care providers. ElderBranch’s mission is to support users in making the best decision possible for themselves and their loved ones. ElderBranch currently offers a comprehensive, national database of nursing homes and offers useful articles and tools to help users navigate the senior care issues and decisions.

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Anila Sitaram Venkat
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