Statewide Issues
Other Post Employment Benefits

The Government Accounting Standards Board (GASB) prescribes accounting standards for all governments in the United States. Long-standing GASB standards recommend that governmental entities estimate the future costs of pension benefits and report those to the public. Until recently, there has not been a similar standard for governments' non-pension retirement benefits, often called "other post-employment benefits (OPEB)". GASB has adopted new standards (GASB 45) for how governments should report the liabilities and the actuarially required contribution (ARC) to fund the future costs of OPEB.

As governments, including the state, start reporting these liabilities in their annual accounting statements, investors who buy government bonds will become increasingly interested in how the governmental entities plan to pay those future costs, and how those payments will affect governmental entity's ability to make bond payments.


POST EMPLOYMENT BENEFITS COMMISSION
 The Governor established the Public Employee Post Employment Benefits Commission (Commission) to study the funding of OPEB. The Commission was directed to provide a report to the Governor and the Legislature by January 1, 2008, that:

  • Identifies the full amount of unfunded liabilities for the State of California and local governments for OPEB;
  • Compares and evaluates various approaches for addressing unfunded post employment benefits;
  • Considers the advantages for the state as an employer from OPEB, such as retiree health care, and;
  • Proposes a plan or plans for addressing unfunded post employment benefits.
Included in the report is a recommendation to the state that it establish prefunding as a policy and budget priority, develop and make public a prefunding plan, and begin prefunding its OPEB liabilities.

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CHAPTER HIGHLIGHTS for Statewide Issues Back to Top

image of black pointing arrowOther Post Employment Benefits
  Liabilities for the State's Other Post Employment Benefits
  Budget Considerations
  State Active and Retiree Health Benefits
 State Civil Service Human Resources Reform
PRINTABLE BUDGET DOCUMENTS Back to Top
Budget Summary - Statewide Issues (pdf * - 132K) -
Provides this entire Statewide Issues Chapter in pdf format.