Saturday, February 4, 2012

Did You Know...

The largest annual cost incurred by states is employees’ compensation.  Included in employees’ compensation packages are benefits, such as health care, life insurance and retirement benefits, such as pension and Other Post Employment Benefits (OPEB).  These benefits are earned each day an employee works and the cost of these benefits accumulates every day as well.  As these benefits are promised and have been earned, a liability is created that will be paid sometime in the future.  Prudent management demands that the value of this liability be estimated, and assets provided, to make sure the payments can be made when they come due.  

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