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View More Press Releases by Center for State and Local Government Excellence

Press release:

Center for State and Local Government Excellence Awards Second Grant; North Carolina State University To Study Public Sector Health And Post-employment Benefits

Issued by: Center for State and Local Government Excellence

Date: Aug. 28, 2007

WASHINGTON, Aug. 24 -- The Center for State and Local Government Excellence has awarded a $377,000 grant to North Carolina State University to study state and local government health care benefits.

Under the 18-month grant, North Carolina State will assess the status of state and local government health care benefits, alternative plans and approaches, and costs and estimated future liabilities. The study will:

  • Identify practices that show the most promise for providing retiree health care benefits.

  • Assess post-employment health care available to state and local government employees.

  • Calculate the financial contribution by state and local governments to retiree health care prior to age 65 and after, including co-pay costs, employer contributions, and employee contributions.

  • Measure to what extent employers are pre-funding health care for state and local government retirees; what is guaranteed; how much of the cost shifts to employees after they retire; restrictions on how much state and local governments can draw from pension funds to pay for health care; and what is co-mingled.

State and local governments are under pressure from a number of directions. GASB Statement No. 45 requires state and local governments to reveal the future costs of their non-pension post-employment benefits, including health care; indications are that many health care plans are under-funded and costs are rising faster than inflation. At the same time, state and local officials must become more competitive with the private sector to hire and retain the talent they need to provide critical public services their residents demand.

The human resource exodus of knowledge workers as baby boomers retire will be more intense for governments because their workforce is older and they employ more individuals with advanced degrees than does the private sector. According to 2006 Census data, 48 percent of private sector workers were over 40 years of age, compared with 60 percent of state government workers and 63.5 percent of local government workers.

"Providing high quality, cost-effective health care benefits for their employees is a high priority for state and local governments," said Center for Excellence Executive Director Elizabeth Kellar. "They know that they need to adopt progressive employment practices and to offer good benefits to be competitive. This study will identify innovative health care programs and will give state and local officials the tools they need to better estimate and finance their health care obligations."

In May, the Center awarded its first grant to the Center for Retirement Research at Boston College to establish a data clearinghouse on state and local pension plans and explore their funding status and economic impact.

About the Center for State and Local Government Excellence

The Center for State and Local Government Excellence supports efforts to make state and local governments knowledgeable and competitive employers so they can attract and retain a skilled and committed workforce. The Center identifies best practices and conducts research on competitive employment practices, workforce development, pensions, retiree health security, and financial planning. Please visit www.slge.org for more information.

About North Carolina State University and the School of Public and International Affairs

Founded in 1887 as a land grant institution in Raleigh, NC, State today enrolls 30,000 students. Dedicated to serving North Carolina and the nation with practical knowledge and analysis of government and public affairs, its School of Public and International Affairs includes graduate and undergraduate programs in political science, public administration, and international studies.

View More Press Releases by Center for State and Local Government Excellence

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