New accounting rules require public agencies to disclose the future cost of health care and other benefits - such as dental, vision and life insurance - promised to retirees alongside traditional pensions.

In California, half the state's employees have reached retirement age or will become eligible to retire within a decade. And the death of a retiree doesn't always reduce expenses because many agencies continue providing benefits to survivors.

According to the California Department of Personnel Administration, a fully vested state employee who lives for 20 years after retirement could receive nearly $500,000 in benefits outside their pension.

California pays $394 to $933 per month in health care costs for each retired state employee, depending on the type of coverage and level of vesting.

The California State Public Employees Retirement System, or CalPERS, is the nation's largest pension fund. It administers health benefits for more than 180,000 retirees, but no estimate of future liabilities has been made because the state has yet to calculate its share.

Another plan, the Long Term Care Fund, which allows retired public employees and their families to pay for their own long-term care at below market rates, provided benefits to nearly 3,000 retirees and their family members in 2005. It projected its future liabilities at $2.24 billion. This could be particularly painful since the participants pay for the program out of their own pockets.

California's second largest pension fund, the State Teachers Retirement System (CalSTRS) has yet to estimate its liabilities but formed a task force, in part to study the increasing costs of providing health benefits to retired educators.

The University of California, which operates its own retirement plans for some 205,000 active and retired employees, estimates its total unfunded liability at about $8 billion.

COUNTIES: Contra Costa County treasurer Bill Pollacek compared the burden of funding non-pension benefits to a "tsunami" that will "make the pension fund tsunami look mild." His county recently estimated its unfunded retiree health care liability at $2.57 billion - double the $1.2 billion it has in unfunded pension liabilities.

The county levies a 1 percent countywide property tax, and 12 percent of that now goes directly to the county with the rest being distributed to cities, school and other services.

Currently, the Contra Costa homeowner with a $5,000 annual tax bill contributes $24 for active county employee health benefits and $9.60 for retirees. This cost will increase when the county begins funding its liability.

In Orange County, the state's second most populous, property owners now pay an average of $2 from their property tax bill for retiree health benefits, and amount that is certain to increase when its liability is calculated.

The added burden of funding the retiree health care liability will either force the counties to increase taxes or claim a greater percentage for its own coffers, meaning schools and other services will take the hit. Other cities and counties will face a similar quandary.

San Francisco, which contributes $853 to $1,047 monthly for each retiree, will have an estimated $4.9 billion liability, according to a preliminary report commissioned by the city.

Under the new rules, to pay off its liability by 2038, San Francisco would have to make annual payments of around $450 million - the cost of providing current benefits plus the amount needed to amortize the accrued liability. How this will impact taxpayers depends upon how the city decides to pay off the debt.

"It's kind of like the perfect storm," said Philip A. Ginsburg, director of the city's human resources department. "It's a really serious long term problem and we must begin to grapple with solutions."

SCHOOLS: Only about half of the state's school districts provide health care, dental and other perks to their former employees, but those that do are expected to report substantial liabilities.

A recent survey by the California School Boards Association found 112 districts estimated their potential liabilities at $12 billion, with more than 300 others making no estimates and 430 districts not responding.

OTHER: The most costly retiree health benefits are provided by the Sacramento Municipal Utility District, which pays $1,247 to $3,260 per month to cover the health care costs of its retired employees. The agency estimates its liability at $327 million.

This is cache, read story here