FAQ: Wide Differences in State Retiree Health Spending and Liabilities

Source: Moody’s, Sector In-Depth, December 19, 2017
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Retiree health benefits vary considerably among states. Despite generally greater legal flexibility to change these benefits compared to pensions, large liabilities and significant costs persist for some state employers who offer generous benefits. We do not expect new accounting rules to have a material impact on costs, but the new rules will facilitate probing credit risk, especially important for those issuers whose retiree benefits have stronger legal protections.