This week's ruling by the state's high court, important as it was, merely reinforces what Hawai'i policymakers already know: A pay-as-you-go approach to funding the Employees' Retirement System won't pass muster any longer.

That was made clear in the ruling from the state Supreme Court that said a law enabling lawmakers to siphon nearly $350 million from the state pension fund in the 1990s was unconstitutional.

The Legislature is unlikely to circumvent this by proposing a constitutional amendment; elected leaders are well aware that effectively raiding the retirement fund makes no sense from a policy standpoint. With the impending retirement of so many baby boomers, government's burden of meeting its commitment to retirees is only going to become more insurmountable, unless reserves are raised to adequate levels.

Past failures to plan, coupled with a series of bad investment years, has led to an unfunded liability of an estimated $5.13 billion. State legislators, thankfully, are looking at ways of boosting funds, including directing more to the ERS in budgetary surplus years.

However, the pension issue is not even the biggest threat facing the ERS. The shortfall is twice as great in funds needed to pay medical benefits for future state and county retirees. Lawmakers were briefed last session by the Government Accounting Standards Board that it would cost $11 billion to cover healthcare expenses for current retirees as well as those now working for local government.

The standards board has changed its accounting rules so that this painful liability must be disclosed fully; otherwise, the state and county's bond rating could be affected.

It's true that the work of reversing this trend has begun, but it must accelerate. New government employees must now work 25 years to qualify for full benefits rather than 10 years as in the past. And the dependents of those hired after June 2001 will no longer be covered by health benefits.

To amplify that effort, the state and the counties must set more aside for future benefits, curbing spending on other services. And while government should not renege on promises made to workers who sacrificed higher pay to secure these fringe benefits, further restrictions on the benefit packages of new hires must be considered.

These are unpopular ideas, but it seems there's little time left for confronting the reality of retirements costing more than taxpayers can afford.