A gubernatorial task force failed to deliver what public employee unions sought: a recommendation that existing health benefits for retirees be virtually locked in place–despite budget gaps across the state.

In a nine-page report, the Task Force on Public Retiree Health Insurance could not agree on the very issue that inspired its creation.

The Task Force was unable to reach a consensus on the best approach to reform proposals that would limit the ability of public employers to diminish public retire health benefits.

To E.J. McMahon that’s “a bit of good news for New York taxpayers” .

Unlike like most private sector employees, many, if not most, public employees–state, municipal and school district–are eligible for lifetime health insurance benefits when they retire.

Retiree health benefits are fast growing part of budgets, especially because public employers in New York finance them on a pay-as-you-go basis, meaning future taxpayers entirely pay the cost of individuals who retired decades earlier. The state of New York’s unfunded liability for retiree health care is $60 billion.

Health benefits are particularly costly for employees retiring before age 65 when they are eligible for Medicare benefits.

A third of 307,377 Employees Retirement System pensioners are under the age of 66, according to the Comprehensive Annual Financial Report of the New York State and Local Retirement System. Among 28,271 police and firefighter retirees, nearly 54 percent are under age 66.

Governor Paterson created the task force after vetoing a bill that would have prohibited government employers from making changes to retiree benefits unless they negotiated similar changes with unions representing current employees.

In the meantime, the governor negotiated and signed a measure that permanently gives that protection to retired teachers.
Originally Published: NY Public Payroll Watch