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Implied Subsidy - What Is It and Why Does It Matter?

10-29-2013 |

This article explains what an Implied Subsidy is, where it comes from, and why upcoming changes in actuarial standards could lead to it causing a large increase in retiree health ("OPEB") obligations.

You might have heard your actuary talk about an "implied subsidy," the extra liability and cost that appears in some actuarial valuations of retiree health benefits.  This article by Bartel Associates explains what an Implied Subsidy is, where it comes from, and why upcoming changes in actuarial standards could lead to it causing a large increase in retiree health ("OPEB") obligations.

What is an Implied Subsidy and Why Does it Matter?

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