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Unfunded Retiree Healthcare Liabilities Grew By $3.3 Billion From 2011-2013

  • Mar 26, 2014
  • Ben Zimmer

Connecticut’s unfunded retiree healthcare liabilities grew by $3.3 billion from 2011 to 2013.  A new actuarial report released last month valued the 2013 unfunded liabilities at $19.5 billion, while the previous actuarial report, released in April 2013, had valued the 2011 liabilities at $16.2 billion.

The following chart shows the changes in unfunded retiree healthcare liabilities from 2006 to 2013. 

In 2011 the state changed its accounting assumptions by raising the interest rate used to discount future payments to retirees from 4% to 5.7%.  This made the “present value” of those future payments – i.e., the state’s current liability – appear smaller on paper, but did not change the state’s actual underlying financial stability.  When consistent accounting assumptions are applied, Connecticut’s unfunded liability in 2013 was higher than at any point during the prior seven years.

This data reinforces the inaccuracy of the Malloy administration’s assertion that unfunded retiree healthcare liabilities fell by $15 billion during his administration.  For more on the problems with that assertion, see this earlier CPI post.   

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