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The Boston Globe

Opinion

opinion | Robert Pozen

Boston must rein in retiree health plans

While the problems of Detroit have highlighted the large deficits in municipal pension plans, less attention has been given to the even larger unfunded obligations of cities to pay the health care benefits of their retired employees — called retiree health care plans, or RH plans.

Most recently, in 2011 Boston reported an unfunded deficit of $3 billion for its RH plan, an ostensible decrease from $4 billion in 2009. In fact, if Boston had not raised by two full percentage points its assumed expected returns on current and future plan assets, its unfunded RH plan deficit would have increased from $4 billion in 2009 to approximately $5 billion in 2011.

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