CHARLESTON, W.Va. -- West Virginia's unfunded retiree benefits liabilities are falling at a much faster pace than many other states, according to a new report from Standard & Poor's Rating Services.
Taken together, all states have shaved 3 percent from their total unfunded liabilities. Meanwhile, West Virginia has used structure changes and reforms passed by lawmakers in 2012 to halve its total.
The Standard & Poor's report analyzed looming state liabilities for "other post-employment benefits," generally referred to as OPEB. The benefits consist mainly of retiree health insurance costs, though they can also include life insurance or other benefits offered to retirees.
It wasn't until 2008 that governments had to begin reporting their OPEB liabilities. Since that time, states have focused more efforts on containing these future costs.
The Standard & Poor's report was a follow-up to a similar study in 2011. That report estimated total unfunded state OPEB liabilities at $545 billion at the close of the 2010 fiscal year.
The report released Monday found the national total fell just $16 billion, or roughly 3 percent, to $529 billion by the end of states' 2012 fiscal year.
Analysts said the fact that the number fell at all was a sign states were taking action.
"The relative stability of current OPEB liabilities results from the actions states have taken to address projected postretirement health care costs," credit analyst David Hitchcock said.
The report said the declines in most states were driven by marginal cost-containment moves or changes in actuarial assumptions. A handful of states also made changes to boost funding to help cover the future costs.
West Virginia was one such state. In late 2011 and early 2012, policy makers approved a series of reforms to rein in the liabilities.
As a result, while most states saw only marginal moves, West Virginia saw a substantial improvement in its statistics.
The 2011 report pegged the state's unfunded OPEB liability at $7.43 billion. The latest report showed that number had fallen by nearly half to $3.75 billion-a 49 percent decline.
On a per capita basis, the state's unfunded OPEB liability was also cut in half from $4,083 per resident in 2011 to $2,023.
On a national level, total per capita unfunded OPEB liabilities declined 13 percent from $1,884 in the 2011 report to $1,632 now.
West Virginia now has the 11th-highest OPEB funding ratio in the country, according to S&P. The state has so far covered 11.7 percent of its projected future obligations, up from just 5.4 percent in the 2011 report.