Private Universities Face Rising Retiree Health Benefits

Many states and state universities have been citing the rising cost of retiree health benefits as a key financial challenge. A Boston Globe analysis suggests that the problem may be equally significant at leading private universities. Last year, for the first time, Harvard University's liability for retiree medical benefits ($812 million) exceeded its pension liability ($763 million). While universities are required to set aside funds for pensions, they are not required to do so for medical benefit liabilities for retirees, and some institutions face significant gaps. Yale University, the Globe reported, has set aside $700 million for its $1.1 billion pension liability. But the university has set aside only $274 million for its $820 million retiree medical benefit liability.