Despite that, TIA uncovered that Minnesota officials have been using numbers from outdated plan evaluations, have not adhered to new accounting standards, and failed to report much of its retiree health care liabilities. The state’s practices have underreported a total hidden debt of $14.8 billion, TIA reveals.
“Minnesota financial officials changed the assumptions used to calculate employee retirement benefit obligations, and citizens learned that the unfunded obligations were ‘actually’ four times higher [$19.3 billion] than reported the year earlier [$4.7 billion],” Bill Bergman, TIA’s Director of Research, said.
“The massive increase arose, first, because the retirement plans realized they were underestimating how long people live [and in turn, the overall estimated cost of the plan], and second, because the implied increase in future payments triggered a requirement that those future payments be discounted at a lower [and more realistic] discount rate, leading to the massive increase,” Bergman added.
I can see why Al wanted them all on Obamacare, make California cover the over run.
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