As reported by, New Jersey’s price tag for public-worker retirement health benefits is higher than any state in the nation, according to a study to be released by the Pew Center on the States. New Jersey has promised $66.7 billion in medical benefits to future and current retirees, but has not set aside a single penny to pay for it, according to the study, which looked at 2009 financial data from all states.

New Jersey’s unfunded liability, the gap between what is owed and what has been saved, is higher than the nation’s most populated states of California ($66.5 billion), New York ($56.2 billion), and Texas ($53.8 billion). In fact, New Jersey’s unfunded liability accounts for 11 percent of the combined $604 billion accrued by all 50 states, the study shows.

With no money set aside, New Jersey is operating without a safety net and its annual medical costs will continue to rise even more as baby boomers retire. “The question is whether these costs are sustainable,” said Kil Huh, director of research at the Pew Center. “The more you pay, the less you’ll have for other services, such as education and health.” In order to better control retiree health costs, states should treat them like pensions, tucking away money each year to pay for future costs, said Huh. The money can then be invested and will eventually lower annual costs. As of 2009, 19 states have set aside no funds for future medical costs, while the others have mostly tucked away a small fraction of what they owe retirees, according to the study.     

Governor Chris Christie and Senate President Stephen Sweeney are working on changes to the public employee medical system that would push some of the costs to current workers and future retirees in the form of increased contributions. However, neither have proposed establishing a pension-style fund.

With enough in the bank to cover 66 percent of what’s owed in benefits, New Jersey’s pension system is also among the most poorly funded in the nation, according to the study. Based on the percentage funding, New Jersey has the 12th poorest pension plan in the country. Many states, including New Jersey, have skipped or reduced pension contributions so they could divert money to other areas. Overall, states were supposed to contribute $115 billion to their pensions, but only kicked up $73 billion in 2009.

The study looked at the effect of the Great Recession on retirement benefits and covers the latest data available from the 50 states on pension, health care, and other benefits promised to current and future retirees. The gap between the promises states have made for public employees’ retirement benefits and the money they have set aside grew to at least $1.2 trillion in fiscal 2009, resulting in a 26 percent increase in one year.