Abstract
Statement of Problem
Many local governments in the Sacramento region have accumulated large unfunded liabilities for retiree medical benefits. New government accounting rules require local governments to calculate and disclose these unfunded liabilities. Some local governments are starting to prefund their retiree medical benefits, similar to funding pension benefits, to reduce their unfunded liabilities. This study seeks to understand how local governments in the Sacramento region are confronting their unfunded retiree benefit liabilities and what factors are influencing their policy decisions.
Sources of Data
I researched the actions local governments have taken to confront their unfunded liabilities in their comprehensive annual financial reports. I collected data about the factors affecting policy decisions through oral interviews with four local government administrators.
Conclusions Reached
Local governments in the Sacramento region are selecting a variety of policy choices to confront their unfunded liabilities for retiree medical care benefits. Benefit structure and budgetary limitations were the primary factors that influenced policy decisions about funding retiree medical benefits.