May 12, 2008, Joyce Krysak

BUFFALO, NY (2008-05-012) New York State Comptroller Thomas DiNapoli said governments need to act now to make sure there is enough money for the health care costs of future retirees. He is proposing an investment fund.

The state's pension system is secure with future needs funded at 104 percent. But when it comes to non-pension benefits for future retirees - the piggy bank is nearly empty.

According to the comptroller, states have only set aside about three percent, a fraction of what they will need, to cover these future costs. And they are substantial. New York has the highest liability - roughly $50 billion. Erie County Comptroller Mark Poloncarz said the county shares a good chunk of that. He said long-term health care costs for retirees are expected to top one billion dollars in thirty years.

Poloncarz said even the view over the next ten years is pretty scary - costs are expected to skyrocket by about three hundred percent.

Di Napoli is calling on state lawmakers to create an investment pool this session. It could function somewhat like the pension system, allowing local governments to maximize any money they set aside now to meet future health care liabilities. Poloncarz said he is eager to see the details.

The state comptroller said such a fund would also ensure that promised benefits will in fact be there when retirees need them.

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