A $205 billion bomb (New York State's Unfunded Retiree Health-care Liabilities)

New York Post ^ | 10/14/2010 | Ed McMahon

[WebFocus]

New York state and local governments' liabilities for retiree health coverage run to the hundreds of billions of dollars -- a burden that's only now coming into full view.

Governments in the state spend billions a year on health-insurance for their retired employees -- a benefit that will never be available to the vast majority working in the private sector.

Unlike pensions, which are at least partly pre-funded through large investment pools, retiree health care in New York's public sector comes out of annual budgets on a "pay-as-you-go" basis.

In New York City alone, the tab for that has risen 50 percent in the last five years. It'll hit $1.8 billion in fiscal 2011, and is expected to grow another half-billion dollars in the next three years.

But the pay-go expense of retiree health insurance -- which accountants call "Other Post-Employment Benefits," or OPEB -- is just the tip of a massive iceberg. Thanks to a new accounting standard, we're finally starting to learn the full, long-term cost of the public sector's retiree health-care promises.

What's emerging from the murky depths of government financial reports is a potentially monumental burden on future generations of New Yorkers -- a burden in addition to the cost of public pensions.

As detailed in a new study by the Manhattan Institute's Empire Center, unfunded OPEB liabilities in New York include:

* $60 billion for the state government.

* $13.8 billion for the state's 20 largest counties.

* And $6.5 billion for the top 20 school districts.

New York City's unfunded OPEB liability of $62 billion was tied with the state of California's for the largest in the country as of mid-2008. The Metropolitan Transportation Authority alone has amassed an unfunded liability of more than $13 billion.

[PGR88]

The good thing is the NY’ers can just leave (and they have been)

[Lorianne]

The First 10 City Pensions That Will Run Out Of Money

Read more: http://www.businessinsider.com/city-pensions-run-out-of-money-2010-10#ixzz12S1DsSdM

[Red Badger]

Okay, where did the money go?.................

[Gaffer]

That’s okay. Obama and his Legislature have a ‘fix’. They’re going to take every private 401K and redistribute it under the guise of a ‘fair system’ and these Union and public government pension plans will be solvent! THIS IS NOT A JOKE. IT WILL HAPPEN.

[Mr. K]

Andy Cuomo will fix that!

He's so good, can't we just annoint him now?

Can you spot the Cuomo"? ?

10 posted on 09/27/2010 6:43:51 PM PDT

Can you spot the Cuomo"? ?

Can you spot the Cuomo"? ?

[biff]

Honest to god, where do all these entities(not just NY but nation wide) think all this money is gonna come from? Have they even thought about it? Do they care?

The only two scenarios I see are default, default, default or inflation, inflation, inflation. With default I can see anarchy in the streets. With inflation I can see all the folks on fixed incomes living on dog food.

[WebFocus]

RE: The good thing is the NY’ers can just leave (and they have been)

---

NY and California, being the largest states in the Union are just reflections or percursors of what’s happening to this country.

One might be able to leave NY and California, but can you easily leave the USA ?

[andy58-in-nh]

Nationalization of private retirement assets has absolutely been discussed in Congress. But even a hint of it actually happening would result in civil unrest in rapid fashion and on a frightening scale. It would also crash the equity markets as investors sought to liquidate their accounts.

[Gaffer]

You forget the everlasting tenet of liberalism - incrementalism. It won't come in one fell swoop. It will hit someone not connected to the common person - first. Starting with those accounts of well-off people - they call them 'rich'....I'm telling you this is going to happen. What you do with it is your business. Nevertheless, it is inevitable. Senator Tom Harkin recently held a Recess Hearing on this very subject. They have to make UNION and municipal/teacher pensions solvent or lose their campaign booty and avid (I say RABID) undying support, even the face of the boldest lies.

[andy58-in-nh]

Incrementalism is the usual method, but in this case the 14th Amendment’s Equal Protection clause (as well as the “takings” clause of the Fifth) would make it impossible: you cannot have the government seize control of private assets, especially not from one indistinct group owing solely to a changeable, annual income level. Legal challenges would come from all directions (as they are even now with the health care nightmare). And still, as I suggested before, those who can do so will take their money out of the market and hide it elsewhere.

[Gaffer]

Just when in the hell during the last almost two year's of this administration has anyone in power even hinted at propriety with respect to the US Constitution, in general, let alone the 14th Amendment? Tell me. Was it operative when Obama seized General Motors, turn the majority of its assets over to the UAW? Was it operative when the Premium Bond investors got less than 10 cents on the dollar? Where was the 14th Amendment when he made BP put up a $20 BILLION DOLLAR fund for damages? Where was the 14th Amendment when he (actually, one of his damn Czars) said (and enforced) bonuse payments for anyone not connected with the government's pet investment company....

You can cite all the legal reasons, and I totally and wholeheartedly agree with you. Reality is another thing. We have been subjugated and are currently ruled by tyrants. Taking your 401K, incrementally, won't be a problem for them. BTW. I've been draining everything I have and putting it other staples.

[andy58-in-nh]

I agree completely as to what they have done in the past. It's one thing though, to screw around with distressed corporate assets for the benefit of your political cronies. It is quite another matter to threaten people's retirement dollars that they themselves have saved and invested for years. People are already angry at the government. What do you think this will do? They can target the "rich" but most people know that's crap and either they are "the rich" or they are next in line.

Believe me, being in the financial services business, people take their 401k's very personally, especially since Social Security is now properly perceived as a time bomb. This would generate such white-hot rage that it would not be contained in any respect - violence would not surprise me. In any event, should the thieves (our government) begin moving in such a direction, I can assure you that I'd pull our assets out of 401k's and use some of it to supplement my growing stores of copper and lead.

[Gaffer]

I fervently hope your assessment of potential rage at such an action would be so. History indicates otherwise. All you need do is read the poem, phrase, etc... "First they came for......."

Our domestic Enemies are not stupid, and they know how to boil the frog.