The intergenerational consequences of retiree healthcare premiums: What is the evidence?

The purpose of this research is to examine the association between the unfunded other than pension benefits (OPEB) liability and current expenditures for state governments as a measure of intergenerational equity. The research hypothesizes that states use the money to provide a higher level of current services than would be possible if the retiree healthcare premiums were fully funded. The results indicate that the current generation is receiving services but deferring the burden of paying for a portion of the services to future generations. This study is among the first to investigate the OPEB liability as a source of financing for current-period services for state governments.